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WeChat begins requesting service fee for use of ‘Card Repay’
Published on: 2017-12-13
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040Tencent Holdings on Friday began charging users who pay their credit card bills via the "Card Repay" service within WeChat Wallet, a move that experts say sends a signal that free-of-charge services within the mobile payment sector are soon likely to come to an end. Cost pressure is the major reason for WeChat's new service fee request.
 

But this is not the first time WeChat has requested a service fee for the use of one of its features.
 

In March 2016, Tencent announced it would begin charging users in China to transfer money from their WeChat Wallets to their bank accounts.
 

With WeChat now acting as one of the two leading payment tools in China's mobile payment sector - the other one being Alipay - its decision to start charging for the use of its Card Repay service, which allows people to pay their credit card bills through the app, is causing some unease among users.
 

Alipay is the third-party payment tool backed by China's Alibaba Group Holding.
 

Indeed, the announcement from WeChat has raised some interesting questions: Will the era of free credit card bill repayment via third-party platforms soon come to an end? What would be the reasons behind that chapter close?

042Terms and conditions

On November 7, WeChat released a notice explaining the new terms and conditions for the use of the Card Repay feature in WeChat Wallet.
 

If a user pays back a monthly amount of 5,000 yuan or more, WeChat will charge them 0.1 percent of that amount, while for transactions under the 5,000 yuan threshold, there will be no charge.
 

Regardless of how many WeChat accounts or credit cards a person owns, the rule applies for each person rather than each account or bank card; if a user owns several WeChat accounts and several credit cards linked to Wallet under the same identity card, the 5,000 yuan free-of-charge quota will be shared across all accounts on a per person basis.
 

Furthermore, when a user pays a bill exceeding the free-of-charge threshold, they will automatically be charged for the service fee.
 

But using mobile payment platforms is not the only option for those paying credit cards bills. Now that WeChat has begun charging users to use the Card Repay service, WeChat Pay could end up losing customers.
 

The social networking giant has offered the same reason for the decision to charge for the use of Card Repay as it did for the decision to charge for Wallet-to-bank transfers last year: cost pressure.
 

WeChat currently uses Tenpay, Tencent's online payment platform, to enable users to pay their credit card bills. Here, Tenpay is charged by banks for each transaction made through WeChat.
 

"Actually, I'm taking WeChat's service fee well because I can choose other ways to repay my credit card bills, such as via Alipay, which does not ask for a service fee for now," said Du Li, a 30-something white-collar worker living in Beijing. "Also, the 5,000 yuan quota offered by WeChat is a lot for me," she said.
 

"Of course, there are cases when users spend more than tens of thousands via credit card each month. If their consumption has already reached such a high level, the user will not care about the 0.1 percent service charge," Du noted

041What does the future hold?

After WeChat decided to charge a Card Repay service fee on Friday, public curiosity piled up regarding whether its competitor Alipay will also follow suit. In October 2016, Alipay began charging its users 0.1 percent for transferring amounts of money from the platform to their bank accounts that surpass the 20,000 yuan free quota.
 

WeChat and Alipay's decisions to start charging service fees last year shows they do not want to be mere money-transferring tools, but to instead have wider impacts by attracting users to spend money via the platforms, helping to bridge users and offline commercial activities.
 

Experts have said that WeChat's service fee request sends a signal that the free-of-charge era within the mobile payment sector seems to be coming to an end, especially as online payment platforms continue keeping a foothold in the market by attracting online sources and covering various payment needs.

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