Tencent Holdings Inc. announced that its popular messaging app WeChat will begin to charge a fee for every money transferred from the app's digital wallet service to a client's personal bank account.

On Monday, the app, which boasts of more than a billion users, announced that beginning March 1, it will charge users for any amount transferred from the virtual wallet service known as WeChat Wallet to the user's bank account. The minimum charge is 0.1 yuan, according to Tencent's statement on Feb. 15. 

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However, the app will only start charging after the first 1,000 yuan. The company also said that it will stop charging if user's spend and transfer through WeChat when one's account total is more than 20,000 yuan in a month.

WeChat claims that the initiative is not to make profit, but to pay for the bank charges incurred in every transaction. In a statement, it claimed that the company has been covering bank fees for users, but since the number of user is growing, WeChat can no longer shoulder the increasing amount as well. 

The move is expected to encourage WeChat users to utilize the company's digital platform both offline and online. It also revealed that it has coordinated with a number of street-side businesses across China, including 100,000 brick-and-mortar outlets, over 80,000 bistros and 600 parking lots.

Analysts speculate that the move is to refrain users from withdrawing their money and giving Tencent more funds to invest in its financial and wealth management schemes. 

A bank insider told Caixin that app companies are not usually charged with bank fees. One executive from a big state-owned bank said that usually, banks often waive these fees or overly lowers them as establishments like Tencent and Alibaba make huge deposits. 

Another employee from the e-banking unit at a major bank revealed that these fees can be a source of profit, as banks usually charge Internet giants like Tencent only 0.07 percent of the transferred amount, while the company gets to keep the rest (0.03 percent).

TagsWeChat, Tencent, WeChat Wallet, bank account