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Alipay to charge bank transfer fee from Oct. 12

By Ding Yining | September 12, 2016, Monday | Online Edition

ALIBABA'S popular online payment affiliate Alipay said it would start to charge users extra commission for making transfer from their account balance into their debit cards starting October 12, following similar moves of its rival Tencent's WeChat Pay earlier this year.

Each Alipay user will have a 20,000 yuan(US$2,985) of free allowance, and a 0.1 percent commission of the total transfer amount would apply if the transfer exceeds that amount, with a minimum charge of 0.1 yuan each time. 

Alipay said in an email statement today that the move is to offset business operation costs which has been climbing up quickly, adding that users will have plenty of chance 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 account to Yu'E Bao, the popular cash management product by Tianhong Fund, which would remain free of charge. 

Yu’E Bao account 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 equals to one yuan of transfer amount exempt from transfer commissions. 

Ma Tao, director of Anslysys International's financial industry research center, said Alipay's huge user base pushes up the payment company's operation cost, although it managed to cover some of the costs in the early stage. 

Previous study shows that most Alipay users won't have to make transfer to their debit card accounts given plenty of payment opportunities offered by Alipay. 
 
WeChat started to charge the commission fee in March 1 this year, setting the cap for each user at 1,000 yuan and it has added that the charge would be used to offset the commission fee charged by banks. 

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