First published: 24th November 2015
From 7th December 2015, nine banks in Hong Kong will offer Electronic Cheque (e-Cheque) services. The launch has been organised by the Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks (HKAB), and the participating banks are Agricultural Bank of China, Bank of China (Hong Kong), Chiyu Banking Corporation, Fubon Bank (Hong Kong), Hang Seng Bank, Nanyang Commercial Bank, The Bank of East Asia, The Hongkong and Shanghai Banking Corporation and Wing Lung Bank.
The e-Cheque service allows traditional cheque writing and deposit to be replaced by entirely online procedures. The e-Cheques are governed by the Bills of Exchange Ordinance have the same legal status as paper cheques. Once the service is rolled out, customers of the nine participating banks will be able to issue e-Cheques using their internet or mobile banking account. All Hong Kong banks will be able to accept deposits of e-Cheques, either through their internet or mobile banking service or the e-Cheque Drop Box service provided by the Hong Kong Interbank Clearing Limited. Hong Kong Dollar, US Dollar and Renminbi e-Cheques will be available.
The e-Cheque itself is a PDF file with the digital signature, backed by PKI, of the issuing bank. The Payer is required to authenticate using two factor authentication (2FA) when issuing e-Cheques. e-Cheques will be non-transferable, and cannot be made out to Cash.
All e-Cheques, whether submitted via the payee's online account or directly, are presented via the Hong Kong Interbank Clearing Limited so multiple presentment is prevented. Clearing is same-day for e-Cheques presented before 17:30.
The security of e-Cheques appears to be at least as good as paper cheques. Like paper cheques and unlike online banking transfers, the Payee does not have to reveal their account details to the Payer. The HKMA brochure promoting e-Cheques also claims, "The payer may consider encrypting an e-Cheque before delivery to further improve security", without specify the encryption procedure or security benefit. The obvious procedure would be to encrypt the e-Cheque PDF file using the Payee's public key, so that a third party intercepting the message would not be able to attempt to present the e-Cheque themselves, or see any details on the e-Cheque.
The HKMA borchure also incorrectly claims, "It can be issued anytime anywhere". As the Payer must connect to their bank to issue the e-Cheque, a working internet connection is required, and the banks servers must be operational.