No more free lunch for e-Commerce payment systems.  WeChat’s messaging app to charge when people spend or send more than 20,000 yuan per month.

Tencent Holdings Ltd. will charge the users of its popular messaging mobile application a fee for spending and money transfers totaling more than 20,000 yuan per month, an employee of the Internet giant says, but smaller amounts for gifts will still remain free.  Users of the app known as Weixin and WeChat will be charged 0.1 percent for spending and transfers over 20,000 yuan per month.

The fees are not an attempt to increase profits, the source said, and will be put toward paying fees charged by banks for handling payments. Tencent was said to have been paying banks fees for handling WeChat users’ payments and money transfers, adding to its costs.   WeChat has nearly 550 million active users every month, Tencent has said, and 400 million use its payment feature. WeChat users spent around 11 billion yuan last year using WeChat’s payment feature, half of that on entertainment.  According to Activate Inc. Tencent earns an average of US$ 7 a year from each WeChat user, and most of that income comes from games.

In comparison Alibaba’s Alipay payment option is not charging users of its mobile app for transfers, but users of its website pay at a rate of 0.2 percent for money transfers.  Ant Financial Services Group, which owns Alipay, said in April that the payment app has 300 million users.

WeChat and Alipay have been in a heated competition to attract users to their apps this year. Alipay has arranged for its users to pay for purchases at stores such as Carrefour and Wal-Mart, and WeChat can be used in Family Mart and 7-Eleven convenience stores.

Recently the People’s Bank of China published draft rules that would limit the amounts individuals can spend online. Some users could be limited to spending less than 1,000 yuan per day.