ALIBABA’S mobile payment system Alipay will start to charge service fees for cash withdrawals (balance transfer from Alipay accounts to bank deposit accounts) from Oct. 12, it announced yesterday.

    Individual users have a quota of 20,000 yuan (US$3,175), for their lifetime, within which any withdrawal is free. Alipay will charge a 0.1-percent service fee on each transaction with a minimum fee of 0.1 yuan per transaction if the total amount exceeds this quota, according to an official statement of the country’s leading third-party online payment.

    It said the move is to offset business operation costs, which have been climbing quickly, adding that users will have plenty of chances to use its payment service without making transfers from their account balance to their bank accounts.

    It added that users can transfer the capital in their accounts to Yu’E Bao, the popular cash management product by Tianhong Fund, which will remain free of charge.

    Yu’E Bao accounts can also be used to make payments directly as well as repay credit card bills.

    Users can also earn Alipay reward points by making online or offline payments and use the reward points to offset the transfer commission charge, with each Alipay reward point equaling to 1 yuan of transfer amount exempt from transfer commissions.

    The move came half a year after Tencent’s WeChat started charging service fees this March for cash withdrawals from WeChat Payment accounts.

    Users of the popular messaging app known as Weixin in China are charged 0.1 percent for cash withdrawal transactions, with the minimum charge for each transaction at 0.1 yuan. Each user is able to withdraw 1,000 yuan, with no fee, for their lifetime. Functions including Red Packet, Quick Pay and Go Dutch are affected by the latest changes.

    Alipay and Tencent’s WeChat Payment are the two main players in China’s mobile payment market with Apple Pay having launched in China in February.

    China is the world’s biggest smartphone market. Almost 360 million people, more than the population of the United States, have already taken to paying by mobile phone, according to the China Internet Network Information Center.

    China has 413 million online shoppers. Last year, more than 50 million people tried online shopping for the first time.

    China’s third-party Internet payment transactions reached 4.058 trillion yuan in the first quarter this year with a year-on-year growth rate of 67 percent, according to iResearch.

    (SD-Agencies)