Thailand, Hong Kong ink cross-border payment link

It’s called Payment versus Payment or PvP.

The Monetary Authority and the Bank of Thailand noted that the PvP link supports real-time transactions between the Thai baht and US dollar. The PvP link will connect Thailand's BahtNet high-value transfer network with Hong Kong's US dollar Real-Time Gross Settlement or RTGS system.

The PvP link will be launched in July 2014. It will eliminate the risk of foreign exchange transactions in which a market player delivered the currency it sold but does not receive the currency it bought.

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

The PvP link will help reduce risks in foreign exchange and support the development of banking services and financial products.

HKMA deputy chief executive Peter Pang said the link eliminates the settlement risk for foreign exchange of varying currencies in different time zones.