A customer pays his bill with WeChat in a cafe in Wuzhen in east China. [Photo: xkb.com.cn]

China will cut transaction fees for bank cards starting on September 6 of this year.

The change is imposed jointly by the country's top economic planner and the central bank and will save 7.4 billion yuan or more than 1 billion U.S. dollars for businesses each year.

Wang Wei is a director under the National Development and Reform Commission.

“The main purpose of this change on transaction fees is to promote the development of various industries by advancing market-based reforms and cutting down corporates' expenditure. Meanwhile, it will promote the healthy and sustainable development of the bank card industry."

Among other fees, the transaction fee rates for debit and credit cards will be lowered to 0.35 and 0.45 percent, respectively.

At the same time, fees on transactions and network services will all be waived for non-profit medical, educational, and charity organizations.

Previously, banks could charge up to 0.9 percent as service fees.

Xu Jing, finance director of the Yansha Youyi Shopping City in Beijing, says the change will cut some 40 percent on bank service fees for them.

"As a department store, our current transaction fee rate stands at 0.78 percent. There will be a massive drop on the fees. We are now paying over 10 million yuan on transaction made by credit cards every year. So the change could save us 5 to 6 million yuan on this category a year."

The catering business is also expected to see the fees shrinking up to 60 percent after the changes.

About 29 billion deals were made through bank cards in China last year, involving 55 trillion yuan.