The Ultimate Guide: How To Make HKD To RMB Payments From Hong Kong

Hong Kong and China are very close to each other – geographically and economically. Businesses on both sides often engage with each other particularly as Hong Kong is the gateway to China.  

Given that Hong Kong uses the Hong Kong dollar (HKD) China uses the RMB (renminbi), making payments from one side to the other might seek tricky. Fret not. Today, we’ll show you how you can send HKD to RMB from Hong Kong to your business partners or suppliers in China!

Understanding the difference between CNH and CNY

Before we begin, it’s important to distinguish between the different types of RMB. They are onshore RMB, known as CNY, and offshore RMB, known as CNH.  

• Onshore RMB (CNY) is RMB that is traded and moves around only within China
  

• Offshore RMB (CNH) is RMB that is traded outside China in external markets such as Hong Kong and Singapore.  

The term RMB can be used to refer to both CNY and CNH interchangeably. As such, CNY or CNH can move seamlessly between RMB accounts without need for any conversion. However, banks and payment providers in Hong Kong will only be able to process offshore RMB (CNH) transactions. This means that any RMB payment from Hong Kong that is bound for China needs to be converted from HKD to CNH first.

Making an HKD to RMB payment through SWIFT

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The easiest and most common way to make an HKD-RMB payment from Hong Kong to China is via the SWIFT network. The process of doing so is nearly identical to how you'd use the SWIFT network to make international payments, whether it’s SGD to IDR, USD to EUR, or HKD to RMB.

SWIFT transfers have no transfer limits, making it one of the best channels for high-value B2B payments.

Here are the key details needed to make an HKD to RMB payment:

1. Bank Account Holder’s name

2. Bank Account Number – consisting of 6 - 20 characters

3. SWIFT Code – consisting of 8 to 11 characters

4. Mobile number of beneficiary / beneficiaries

5. CNAPs code

What is a CNAPs code?

The China National Advanced Payment System (CNAPS) code is unique to the country. It is a 12-digit identification code assigned to each individual bank in China, including foreign banks who have a presence within the country. Like SWIFT, CNAPS codes transmit information alongside the funds, such as the bank branch of the entities involved.

The CNAPS code is essential for anyone making transfers in RMB to China. The code routes the funds to the correct recipient bank.

Because it is so crucial to making payments to China, it is almost certain that your recipient or beneficiary based in China will be able to provide you with their CNAPS code to ensure your payment goes through smoothly.  

What are the limitations of using SWIFT for HKD to RMB payments?

HKD payments to a Chinese bank account via SWIFT may take one to two business days for the funds to reach its recipient. For this, the funds must reach the bank or payment solution provider by 2pm (GMT +8).

Take note that delays can easily happen if the CNAPS code is entered wrongly. There aren’t many English resources around to provide information on the latest CNAPS codes so it is important to ensure that it is obtained directly from a reliable source such as your business partner or supplier, and input correctly.

Pros & Cons: SWIFT

Pros:  

• No transaction value limit

• SWIFT transactions can be tracked

• MT103 document available as proof of payment

• Widely accepted in both Hong Kong and China

Cons:

• Slower processing time of 1 to 2 business days

• Higher transaction fees

• Requires more information to set up a payment (bank account details, CNAPs code, SWIFT code, mobile number of beneficiaries etc.)

Making HKD to RMB Payments Through FPS

Hong Kong's Faster Payment System (FPS) transformed the way people made money transfers in both HKD and RMB when it was launched in 2018. The FPS enables instant retail payments to be made across different bank accounts and e-wallets.

Instead of requiring traditional bank account details, FPS payments can be completed with just the recipient’s mobile number, email address, FPS IDs, or a QR code. It can be used 24 hours a day, seven days a week, and funds can reach recipients nearly instantly, making it a very convenient way to make HKD to RMB payments.

What are the limitations of using FPS for HKD to RMB payments?

FPS is primarily meant to support retail payments and not larger sized, high frequency B2B payments. Here are some limitations to take note of:

1. Transfer Limits
   Different banks have different limits, depending on the type of transfer and who the recipient is. Generally, banks will set allow you to set a higher daily transfer limit of around HKD 1 million for recipients you frequently make payments to. It is recommended to check with your bank for their specific limits on HKD to RMB transfers via FPS.
   

2. Currency conversion rates
   Even though FPS supports RMB payments, the bank may not perform the currency exchange in real-time at the prevailing rate. This means potential losses on your payment since the prevailing rate applied might not be the most favorable, even if you had timed your payment.
   

3. Limited network in China
   FPS is widely used in Hong Kong but its reach in China is not as extensive. Before you make a payment in FPS, it is important to check if your recipient's bank in China accepts FPS for RMB payments.

Pros & Cons: FPS

Pros:  

• Convenient and easy to use

• Near instant turnaround time for transactions

• Available 24 hours a day, seven days a week

Cons:

• Lower transfer limits

• Not widely used and accepted within China

• Currency conversion may not occur in real-time and rates may not be in your favour

Making HKD to RMB Payments with Multi-Currency Accounts

While FPS may suit the needs of smaller businesses or merchants, it will not be sufficient for a larger business that makes frequent payments of either HKD or RMB, particularly if the amounts involved are higher.

Multi-currency accounts provide the perfect solution in such scenarios. These are offered by many banks and will allow you to hold and manage funds in both HKD and RMB.

You can simply transfer your HKD into the account and then make the conversion to RMB for the payment to your recipient’s bank account in China. This eliminates the need to open and maintain separate accounts for each currency, which significantly simplifies your financial organisation.  

Another benefit of using multi-currency accounts is the that currency conversion fees tend to be lesser than standard bank accounts as well.

What are the limitations of using a multi-currency account for HKD to RMB payments?

Fees are one of the biggest limitations for multi-currency accounts. Such fees usually fall in two categories:

1. Minimum balance requirements
   Some banks will impose fees on users if they do not maintain a minimum amount of funds in their multi-currency account. The minimum amount and currency varies from bank to bank.
   

2. Dormant account fees
   Accounts which have not made a transaction for a period of time – which can be in weeks or months – may have to pay an inactivity fee.

Another factor to consider is how different the features and fees for different multi-currency accounts can be. Finding the multi-currency account that’ best for your business can take time and even then, there is no guarantee that it will meet all your requirements.

Pros & Cons: Multi-currency accounts

Pros:  

• Flexibility to hold and manage HKD and RMB in one place

• Ability to choose currency conversion time for preferable rates

• Better currency conversion rates compared to banks

Cons:

• Minimum balance requirements likely to be imposed

• Dormant account / inactivity fees

Simplify your HKD to RMB payments with Wallex

As shown above, there are no shortage of ways to make payments of HKD to RMB. Still, each method has its own pros and cons and switching between different platforms to perform payments which give you the best fees or FX rates can get tedious quickly.

This is what Wallex is designed to help you overcome. Experience unmatched speed, support and savings for your HKD to RMB payments with our fully digital platform.

Receive, hold, convert and pay with better speed, support and savings. Our fully digital platform makes payments to Hong Kong’s FTA partners fast and seamless, whether you’re converting HKD to CNH, HKD to PHP, HKD to EUR, or other currencies. Need assistance on any issue or help to expedite an emergency payment? Just get in touch with your local, dedicated Account Manager.

Ready to simplify your HKD to RMB payments? Talk to us today and let us help!