Hong Kong Expands Electronic Property Payment System to Secondary Market
Terrill Dicki Feb 05, 2026 09:11
HKMA extends PAPT electronic payment system to secondary residential property sales from Feb 28, building on 15,000+ refinancing transactions since 2022 launch.
Hong Kong's banking regulator is bringing electronic payments to the secondary property market, eliminating the need for physical cheques in residential real estate transactions starting February 28, 2026.
The Hong Kong Monetary Authority announced Wednesday the expansion of its Payment Arrangements for Property Transactions (PAPT) system, which routes mortgage proceeds directly between banks rather than through solicitors' accounts. The move follows strong adoption in refinancing—over 75% of eligible refinancing deals now use PAPT, with more than 15,000 transactions completed since the system launched in November 2022.
"The HKMA is committed to promoting electronic payment for property transactions to improve efficiency and security," said Eddie Yue, the authority's Chief Executive. Buyers and sellers wanting to use the system can request their estate agents add relevant clauses to provisional sale agreements.
Why This Matters
The traditional Hong Kong property settlement process relies on physical cheques routed through law firm client accounts—a system that typically delays sellers from receiving funds until two working days after completion. PAPT cuts that to same-day settlement through the interbank electronic payment system.
More importantly, it reduces counterparty risk. The original impetus for PAPT came from concerns about potential disruptions at law firms handling large mortgage transactions. Direct bank-to-bank transfers via CHATS (Hong Kong's real-time gross settlement system) sidestep that vulnerability entirely.
Broader Digital Push
The property payment expansion fits within HKMA's accelerating fintech agenda. Yue indicated earlier this month that the regulator expects to issue its first stablecoin issuer licenses in March, though he emphasized only a "very small number" would be granted initially.
The HKMA and Securities and Futures Commission are also currently consulting on standardizing calculation periods for OTC derivative clearing rules—another piece of Hong Kong's effort to modernize financial infrastructure while maintaining regulatory oversight.
For the property market specifically, the Hong Kong Association of Banks has published guidance materials, and mortgage banks will offer PAPT for any secondary residential transaction with provisional agreements signed on or after February 28.
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