Mainland China’s top five banks waive charges for money transfers as competition from internet finance companies heats up
Central bank asked lenders to scrap fees
Mainland China’s five largest banks will start providing free money transfers via mobile banking in a bid to tackle increasing competition from internet finance services.
Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications said in a joint statement on Thursday that fees for mobile money transfer services would be waived. Customers will also be able to make online banking transfers for free if the amount does not exceed 5,000 yuan (HK$5,945).
Before the announcement, most mainland banks charged customers a nominal fee to make money transfers, including interbank and inter-city transactions. But some lenders, such as China Merchants Bank, started waiving online banking transfer fees for customers in September and regional banks such as the Bank of Shanghai and Bank of Ningbo quickly followed suit.
The People’s Bank of China issued a notice in December requesting financial institutions to scrap online and mobile transfer fees following the surge in growth of internet payments services such as Alibaba-backed Alipay and Tencent’s WeChat Pay.
Alipay, which currently holds about 70 per cent market share in the mobile payments market, allows users of its mobile app to make money transfers to other bank accounts for free. The company said that it had no plans to begin charging users for such transfers.
Some users have taken to Weibo microblogs to welcome the banks’ changes.
“Looks like competition is still beneficial. If not for [the growth of] Alipay, we wouldn’t have these benefits,” one said.
Others were less welcoming, pointing out that they would not switch from using services such as Alipay and WeChat Pay to using mobile banking apps just because the charges were waived.
“It’s just a few kuai,” said another Weibo user. “The mobile banking apps still have much room for improvement otherwise no one will use them.”
Tencent’s WeChat said last week that from the start of next month it would begin charging users of its in-built mobile WeChat Wallet a 0.1 per cent fee for money transfers to personal bank accounts, in order to cover bank handling fees which the company had been absorbing previously.