The new Hong Kong e-Cheque payment service was launched by the banking sector on 7 December 2015. e-Cheque is, as the name implies, a digital payment method whereby the payment is sent electronically via a PDF image file that resembles a physical cheque. The entire process is done online which overcomes the limitations put onto a physical cheque.
How Does the e-Cheque Service Work?
Let’s first take a quick look at how this service works. The e-Cheque system allows users to write, send, and even cash cheques online. Through Internet banking channels on your phone or computer, you fill out the information on the cheque (amount, payee, etc.) and it is signed with a digital signature. The signature uses Public Key Infrastructure (PKI) technology. The cheque is then generated into a PDF file that can be emailed to the payee. The payee can cash the cheque by uploading it to their own online banking system. In this article, we are going to show you four benefits paying by e-Cheque offers over other payment methods.
#1 Same Legal Protection as Paper Cheques
The first thing to note is that an e-Cheque comes with the same legal protection that a paper cheque does, so this is no excuse not to use one. Both the payer and the payee will have legal protection as the cheques are governed by the Bills of Exchange Ordinance. These e-Cheques could still be used by corporations and individuals when it comes to important payments such as purchasing property or paying deposits.
#2 High Security
Secondly, they offer higher levels of security. Using a digital signature means that the payer need not actually physically sign the cheque. The payee never sees the signature and thus cannot copy it; reducing the risk of forged signatures. The payer is also required to pass through Two Factor Authentication (2FA) which boosts security. Lastly, unlike with other online payment options, the payee doesn’t need to include their banking information in order to receive and cash the payment.
#3 More Convenient
Third on our list is that e-Cheques can be sent by the payer and deposited/cashed by the payee at any time, and at any place. Imagine that you’re on an overseas business trip but you need to pay a payee. However, they never disclosed their bank account details to you, or you never learned it. The e-Cheque service doesn’t need both parties to sign up to their payment platforms like PayPal and Alipay. Therefore, you can pay someone by e-Cheques conveniently through email and even instant messaging services on your phone or computer. All you need is an Internet connection and a phone or a computer.
#4 Save Costs and the Environment
Less paper being used is always a good step for the environment. Because of their automatic and online nature e-cheques also save costs. They cut out a lot of the things needed to process a physical cheque. This is things like needing to deliver the cheque or deposit it personally. It also means shorter queues in a bank and less waiting in line for both parties. Additionally most banks, if not all, are offering the e-cheque payment system for free to further save costs for you. Processing payments usually incurs an admin/processing fee, so payments like this are not usually free.
The launch of the e-cheque system will prove a great boon to the Hong Kong market. It’s going to strengthen Hong Kong’s banking sector and reinforce Hong Kong’s position as an international finance centre. For details on how to open a corporate bank account in Hong Kong please click here.