Tencent announced on Wednesday its popular payment platform Wechat Wallet will end its free transfer policy gradually. The payment platform is associated with China’s largest social network WeChat and claims to attract more than 400 million users.
According to the new policy, if total amounts for face-to-face payments and transfers are below 20000 RMB per month, transfers will be free of charge, while a 0.1% service fee will be charged for excess amounts.
Tencent has said the reason they will charge a fee for money transfers is to cover the cost of bank transaction fees and that it is not to extract profit from users.
However, it is becoming a trend for more people to use Wechat for business purposes. There are an estimated several million individual and small businesses currently on Wechat. The user experience for transfers is so convenient that in one-click a money transfer can be done and this may prove to be a dilemma for users who have to decide whether to pay to use it.
WeChat claims to have 550 million monthly active users, while its equivalent, U.S. social network giant WhatsApp, engages more than 900 million monthly active users globally. Whatsapp focuses more on its sole function as a social network, whilst Wechat’s strategy has been to add multiple functions to its platform including payment processing.
(Featured photo from WeChat)