On 22 June 2025, Hong Kong and Mainland China saw the official launch of Payment Connect – a real-time cross-border payment link jointly unveiled by the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC). The system seamlessly connects Hong Kong’s Faster Payment System (FPS) to Mainland China’s Internet Banking Payment System (IBPS), enabling immediate person-to-person money transfers across the two regions.
With real-time, efficient payroll settlement now available across borders, this move not only enhances operational fluidity but also creates a stronger case for leveraging EOR services for compliant, cost-effective workforce expansion into the Mainland.
What is the Impact on HR and Payroll Services?
For HR teams managing regional operations, this new functionality significantly reduces the administrative burden and cost associated with cross-border salary payments. Previously, salary transfers from Hong Kong to China often required manual bank processes, longer processing times, foreign exchange complications, and high transaction fees. With the FPS cross-border payroll feature, HR departments now benefit from:
- Instant transfers: Real-time payment delivery ensures employees are paid promptly.
- Cost savings: Lower transaction costs compared to traditional wire transfers.
- Reduced compliance risk: By partnering with an EOR services provider, companies can manage payroll in full compliance with Mainland regulations.
- Improved employee experience: Fast, accurate payments increase trust and retention among cross-border employees.
Why this move supports an EOR adoption?
As Hong Kong businesses increasingly look to enter or expand their presence in China, managing local compliance, contracts, and payroll becomes a core challenge. The FPS upgrade provides a smoother operational framework for companies using EOR services to build local teams in China.
An EOR services provider acts as the legal employer on behalf of a business, handling employment contracts, statutory benefits, and payroll while the business retains control over the employee’s daily tasks. This model is especially valuable in markets like China, where employment laws and tax regulations are complex and ever-changing.
With FPS now enabling faster, cheaper, and more transparent salary payments to Chinese employees, EOR services provider can offer even more streamlined solutions for:
- Onboarding staff in Mainland China within days.
- Ensuring local compliance without establishing a legal entity.
- Managing local payroll without FX risks or payment delays.
What are the key industries that will benefit from this move?
Industries like tech, fintech, e-commerce, and manufacturing are especially poised to benefit from this development. Many already operate cross-border teams and can now optimise payroll processes with FPS and EOR support. For example, a Hong Kong-based fintech startup that wants to hire developers in Shenzhen can now do so without creating a local legal entity or worrying about delayed payments. An EOR handles the legal employment, while salary payments are efficiently processed via FPS.
The new FPS cross-border payment function marks a significant step forward in facilitating seamless payroll services between Hong Kong and China. For businesses planning to expand into the Mainland, especially without setting up a legal entity, partnering with an EOR services provider and leveraging this payment innovation can dramatically reduce friction and risk.
As payroll becomes simpler and more compliant, now is the ideal time for Hong Kong companies to tap into China’s talent market. Get in touch with our team today to learn how we can support your expansion into the China market!
