Alipay 3% transaction fee

Question

Hi, we are planning on visiting China soon. I'm hearing stories many places don't take physical credit cards? Is this true? And if you use Alipay linked to a foreign credit card it'll charge you 3% fee for every transaction over RMB 200? How do I avoid the 3% fee when going shopping in China? Only going for a week so don't think I'm going to try to open a local bank account and also just platoon using Verizon roaming dat while I'm there.

Answer

It is true that in many places in China, especially smaller shops, restaurants, and local markets, physical international credit cards (like Visa, MasterCard, or Amex) are not widely accepted. China has largely moved to mobile payment platforms like Alipay and WeChat Pay, which are used almost everywhere from street vendors to large supermarkets.

Regarding Alipay and foreign credit cards:

If you link a foreign credit card to your Alipay account, there is typically a 3% foreign transaction fee charged by Alipay for payments above RMB 200 per transaction. This fee is in addition to any fees your bank may charge for foreign transactions.
For transactions below RMB 200, the 3% fee may not apply, but rules can vary depending on the credit card and Alipay policies at the time.

Ways to avoid or minimize the 3% fee while shopping in China for a short trip:

Use cash (RMB) for smaller transactions: Withdraw RMB from ATMs in China using your international debit card. This avoids Alipay fees and is widely accepted for small purchases, taxis, and street food.
Prepaid travel cards or UnionPay cards: Some international travelers use prepaid UnionPay cards or debit cards that are widely accepted in China. These can often be linked to Alipay without the 3% fee.
WeChat Pay with foreign card: In some cases, WeChat Pay also allows linking foreign cards, but fees are similar. Check the latest rules in your app before your trip.
Use Alipay QR codes in selected locations with cash top-up: Some stores allow you to pay with Alipay by topping up your Alipay account with cash at convenience stores or banks. This avoids linking a foreign credit card directly.
Plan to use Alipay/WeChat only for large or convenient payments: For example, hotels, large department stores, or transportation, while using cash for small purchases to avoid fees.

Since your trip is only a week and you do not want to open a local bank account, the most practical solution is to carry enough RMB cash for daily expenses and use Alipay only when absolutely convenient, being aware of the 3% fee for large purchases with your foreign card.