Hong Kong to launch pay link system with Thailand in 2014

It'll eliminate finance risks.

According to a report, a payment-versus-payment (PvP) link between the Thai Baht real time gross settlement system in Thailand and the US Dollar Real Time Gross Settlement system in Hong Kong will be launched in the second half of 2014.

The Hong Kong Monetary Authority and the Bank of Thailand jointly announced the establishment of the link today.

The move will eliminate the principal risk of a foreign exchange transaction whereby a market player has delivered the currency it has sold but does not receive the currency it has bought.

The new linkage between the two payment systems will strengthen the role of Hong Kong as a payment hub in the region and will offer business opportunities to Hong Kong banks in recruiting Thai banks for providing payment and cash management services.

It will be the third cross-border PvP link between two real time gross settlement systems for two different currencies in the Asian region.