Mobile phone payments have seen wide usage in China in recent years.With it, you can buy all sorts of things, from ice-creams in supermarkets to wealth management products.But this week, as some of us might have anticipated, one of the largest payment platforms WeChat, owned by Tencent, announced it will start charging users for transferring money out of their accountsStarting from March, after the first 1,000 yuan, users will be charged 0.1 percent of the amount they transfer out of their WeChat accounts into their banks.And the minimum charge for each transfer will be 0.1 yuan.The previous scheme in which users were charged once their total transfer exceeds 20,000 yuan within a month has been scrapped.What’s the thinking behind Tencent’s move?Charging fees can discourage WeChat users from taking money out of their accounts, leaving Tencent with more funds to invest in lucrative wealth management products.Tencent has never announced how much money users transfer out of their WeChat or how much it pays banks for the transfers.A Tencent executive has said payments to banks for transfers cost the company 190 million yuan per month.But several bank employees have told Caixin that amount was exaggerated.Indeed, small banks for instance, reduce or even waive the fees since Tencent’s deposits are usually quite large.Another employee at an e-bank unit said, charging users for transfer itself can be a source of profit, since Tencent’s rates are higher than most banks which charge Tencent 0.07 percent for transfers.
