Alipay to start charging fees on credit card repayments

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Alipay to start charging fees on credit card repayments Payments News Ant Financial Alipay
Users making payment through Alipay (Image credit: WiFi Connected)

Ant Financial’s payment service Alipay will start charging a fee on credit card repayments next month, a move that comes amid?rising operational costs and?tightening regulation.

From March 26, the Chinese payment giant will start charging 0.1% on monthly repayments in excess of RMB 2,000?(around $300) to “ensure the sustainable development of its credit card repayment service,” an Alipay spokesperson said in a statement shared with TechNode.

The fee will not be applied to credit card bills below the monthly threshold, while users that exceed it will be able to use their membership points to increase the quota without incurring fees.

Alipay is not the only payment service that has been forced to start digging into their customers’ pockets. In August, rival WeChat Pay expanded its credit card bill pay fee policy from?charging users who spend more than RMB?5,000?per month to also include all credit card repayments.

The government’s tightening regulatory control over the payment industry, which is aimed at reducing financial risks, has?had a significant impact on platforms’ revenue streams. Last month, authorities implemented a new policy requiring non-bank payment companies to place their customers’ deposits in centralized interest-free accounts, preventing the companies from making handsome interest returns from their customers’ money.

There are other contributing factors to rising operational costs. In recent years, Ant Financial has been ramping up investments in research and development of technologies including blockchain. It has also devoted more resources to user acquisition and growth opportunities in the offline payments market.

Last June, Ant Financial closed a?funding round worth?$14 billion, The company said?the funds would go towards its global expansion efforts, technology?development, and hiring new personnel. Currently, Alipay has?over 1 billion annual active users globally.