The Truth About The New WeChat Service Charge

Matthew Brennan Tencent

A new WeChat service charge of 0.1% was announced for China users making withdrawals starting from March 1st 2016 At the same time WeChat is cancelling its previous policy of charging 0.1% on cumulative monthly transfers above 20,000 yuan. The announcement has caused much confusion and debate. Below we explain: How this will affect you? & Why is WeChat doing this?


New Service Charge Details

The WeChat service charge only applies when you withdraw money from your WeChat wallet into your bank card. Transfers to friends, payments to online & offline stores, lucky money sending and receiving and the go Dutch feature are all still completely free services on WeChat.



The first 1,000 RMB users withdraw out to a connected bank card is exempt from the service fee. This exemption is calculated per personal ID card or passport, not per bank card or per WeChat account. Once the exemption is exceeded all further withdraws will incur the service fee. WeChat only charges 0.1% of the amount that exceeds the 1,000 RMB. The lowest service fee users can be charged at one time is 0.1 RMB. WeChat says they chose the 1,000 RMB as the benchmark, as users normally have less than 1,000 in their WeChat wallet.


True for us at least 🙂


In China, banks charge transaction fees to all third party payment platforms including Alipay, Baidu Wallet, WeChat Pay etc. WeChat almost entirely covers these bank service fees and does not pass the costs on to users. Tencent’s (WeChat parent company) stated previously in November “we are incurring significant bank handling fees… which we offer to users largely for free.”



The average service fee banks charge WeChat is higher than 0.1%. And over the past 12 months payments and transactions on WeChat have absolutely exploded:


Data: Tencent / Graphics: Quartz

Summary / Conclusion

It’s highly likely that all third party payment platforms in China including WeChat will gradually introduce more service fees for transactions as they are currently subsidizing their users. For now, WeChat has taken the strategic choice of charging a fee only when users withdraw money from their ecosystem. However given that WeChat wallet has achieved wide adoption as a payment choice for stores across China, we doubt many people will be too inconvenienced by this new policy.

With Apple pay likely to be launched in China on February 18th things are going to get very interesting in the mobile payment area this year.