Scrapping of transfer fees long overdue

China's five largest commercial lenders started providing interbank transfers and transfers within accounts of a bank via mobile banking for free on Feb 25, 2016. [Photo/IC]

CHINA'S FIVE LARGEST COMMERCIAL LENDERS, Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, and Industrial and Commercial Bank of China reportedly plan to stop charging for domestic transfers made via mobile devices and to scrap the fees on online transactions of less than 5,000 yuan ($766). The "Big Five" banks' change in policy is a necessary response to the rise of online third-party payment platforms, says Changjiang Daily.

The truth is, these lenders should have stopped charging such fees in return for customers' trust (and investment) a long time ago. When customers had no choice but only to deposit their money in the five banks years ago, these banks lend the money for interest but they still charged customers for transactions simply because they are in monopoly position.

Now they are being forced to improve their services in response to the Internet finance services provided by Internet giants such as Alibaba Group Holding Ltd and Tencent Holdings Ltd, which offer secure online transactions for free.

The banks' concerted move to regain customers' confidence makes perfect sense in the face of this competition, which is increasingly open to all qualified players, private or State-owned. And it is clear that customers will enjoy more benefits from the competition.

More importantly, benign market-oriented competition has great potential to prompt all players to enhance their efficiency and show full respect to customers' legal interests. This will further promote not only financial services, but also the fairness of consumption in the longer run.

For the five banks, it is important for them to change their mentality. Instead of thinking in what ways they can get more from clients, but they should try to make things easier for customers.