The use of cheques in Hong Kong could end as the Hong Kong Association of Banks (HKAB) is working out a road map this year to phase them out amid an irreversible shift to electronic payments. Electronic payment methods have taken off, said Luanne Lim, Chairwoman of HKAB, pointing to PayMe, Faster Payment System (FPS) and e-wallets such as Alipay and WeChat Pay. “It is time to consult the industry and develop a transition road map for the demise of the cheque,” said Lim in her first media briefing last week after taking over the role at HKAB this month. Three years of Covid has pushed the public towards digital payments, leading to a decline in the use of cheques, said Lim, who is also the Hong Kong CEO of HSBC. The HKAB’s Chairmanship is rotated annually between the CEOs of HSBC, Standard Chartered and Bank of China (Hong Kong), the three note-issuing banks in the city. Lim said it had not yet been decided if cheques would be totally phased out. The issue will be discussed by a task force set up by the HKAB to explore various possibilities and options to work out a road map to encourage cheque users to shift to digital payments. There are concerns about what options would be available to cheque users, she said.
Cheque transactions in Hong Kong shrank to HKD488.6 billion in December, a decline of 13% year-on-year, according to Hong Kong Interbank Clearing. Compared with August 2018, a month before FPS was introduced to enable instant, costless transfers, the use of cheques had slumped by 34%. Transactions via FPS, which allows consumers to transfer money between different banks via mobile phones, stood at HKD430.24 billion in December, an increase of 39% year-on-year. FPS transaction volumes have jumped 12-fold since its launch in September 2018.
Since the first cheque was issued in Britain in 1695, the payment method has been widely used for money transfers and business transactions. Many countries are moving ahead with plans to consign cheques to history amid the emergence of digital payments. Singapore and Australia have announced a timeline to end their use, but a similar plan mooted in Britain in 2009 was abandoned because of public opposition. Australia will phase out government use of cheques in 2028 before winding down the system by 2030, according to the Australian government’s announcement in June, which said cheque use had declined by 90% over the past 10 years. Singapore will scrap corporate cheques by 2025, but allow individual use, with banks charging users a fee since November, according to the Monetary Authority of Singapore (MAS). Cheque transactions in the city state sank 70% from 2016 to 2022, the South China Morning Post reports.
