On 18 Feb 2025, the HKMA refined its 2021 circular on real-time fund transfers, requiring Authorized Institutions to implement mandatory name matching for all applicable transfers regardless of amount (with a maximum threshold of HK$1,000 if set), superseding the previous HK$10,000 threshold to counter scams evading the prior requirement. The measures mandate enhanced customer reminders and communication, effective by 31 May 2025, to reduce erroneous transfers and fraud risks.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction and Background
On 18 Feb 2025, the Hong Kong Monetary Authority (HKMA) issued a circular refining measures for real-time fund transfers made by customers, superseding the 2021 circular to address evolving scam tactics and enhance customer protection against erroneous transfers.
Key Regulatory Change: Threshold Reduction
The HKMA refines the mandatory name matching requirement for real-time fund transfers, lowering the transaction amount threshold from HK$10,000 (or equivalent) to HK$1,000 (or equivalent) for the mandatory name matching process. Als are encouraged to conduct name matching for all applicable transfers irrespective of amount, but if setting a threshold, it must not exceed HK$1,000 to balance operational efficiency, customer convenience, and error prevention.
Coverage and Implementation Scope
The refined measures apply exclusively to real-time fund transfers via FPS Type C1 credit transfers and equivalent intra-bank systems where payees are identified by bank account number. They do not apply to FPS Type C2/C3 transfers or other non-real-time fund transfer types. Als must implement these measures by 31 May 2025, superseding the 2021 circular.
Mandatory Name Matching Process
Als acting as payee institutions must reject transfers failing the mandatory name matching process. Als may adopt risk-based matching logic (not requiring exact name matches) or, for intra-bank transfers, implement equally effective alternatives such as displaying partially-masked payee names to customers before transfer confirmation.
Customer Communication Requirements
Payer institutions must display a prominent pre-transfer reminder: 'Name checking may not be conducted in the fund transfer. Please carefully verify the payee’s account number and other payment details.' Als must also communicate to customers that real-time transfers cannot be stopped post-effect, clarify the name-checking scope (including the HK$1,000 threshold for retail bank payees), and explain scenarios where name checking may not occur.
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