A patient's family recently reported that Waterdrop Inc. (NYSE: WDH) charged an 8% platform service fee and a 0.6% channel fee upon withdrawal, bringing the total fee rate to 8.6%. Customer service has since confirmed the increase.

On September 18, a patient's family member's disclosure pushed Waterdrop back into the public spotlight. When applying to withdraw 6,831 yuan in life-saving funds, the platform deducted an 8% platform service fee of 546.48 yuan, plus a 0.6% third-party payment channel fee of 41.04 yuan, for a total deduction of 587.52 yuan. The combined fee rate reached 8.6%, with only 6,243.48 yuan actually arriving in the account. Waterdrop customer service confirmed that for fundraisers initiated after August 15, 2026, the platform service fee has risen from 6% to 8%, capped at 8,000 yuan per project.

This is not the first time Waterdrop has sparked controversy over its fees. Its fee history shows that from its 2016 launch until early 2022—nearly six years—Waterdrop operated with a "zero service fee" model, with only a 0.6% channel fee deducted by third-party payment institutions. In January 2022, it piloted a 3% service fee in cities like Xuzhou, and from April 7 of that year, the 3% charge was rolled out nationwide with a cap of 5,000 yuan per project. In December 2023, the fee rose to 6%, with the cap increasing to 8,000 yuan. By August 15, 2026, the rate jumped to 8%, and combined with the 0.6% channel fee, the total hit 8.6%.

The fee hike is not unique to Waterdrop. Nuanxin Huimin began charging an 8% service fee in late 2024, and Qingsong Chou followed suit in 2025, bringing all three platforms designated by the Ministry of Civil Affairs for personal求助 network services to a uniform 8% rate. Waterdrop customer service cited a "Waterdrop Service Operation Announcement" to media, explaining that the increase is needed to sustain the platform's operations. The announcement, citing an audit report from Dahua Certified Public Accountants, stated that the platform loses over 36 million yuan per quarter, with operational losses subsidized by other revenue from Waterdrop Inc.

Left hand charity, right hand insurance: 92% of revenue from insurance while crowdfunding losses widen. Waterdrop Inc., founded in April 2016 by Shen Peng from Linyi, Shandong, listed on the New York Stock Exchange in May 2021, earning the title of "first insurance tech stock." The repeated public backlash over fees stems from the long-standing mismatch between the "charitable" and "commercial" sides of the company. Shen Peng has been candid about this, stating publicly multiple times that "Waterdrop is a commercial company, not a charity organization. The public seeing us as a charity is a significant misunderstanding."

Waterdrop's business model can be summed up as "charity for traffic, insurance for profit." The crowdfunding segment contributes a minimal share of overall revenue; its core function is to reach massive user numbers through serious-illness fundraising scenarios, then monetize via insurance products sold through Waterdrop Insurance. According to Q2 2026 financials, insurance-related revenue reached 1.3332 billion yuan, accounting for 92.1% of total revenue of 1.4482 billion yuan. In the first half of 2026, insurance-related revenue hit 2.479 billion yuan, again 92.1% of total revenue of 2.6905 billion yuan, making it the dominant income and profit pillar. Insurance segment operating profit was 183.6 million yuan in Q2 and 336.5 million yuan in H1.

On the crowdfunding side, Q2 2026 service fee revenue was 63.6 million yuan, down 5.7% year over year, while H1 came in at 124.3 million yuan, down 7.6%. The crowdfunding segment posted an operating loss of 37.27 million yuan in Q2 and 73.32 million yuan in H1, with losses widening compared to the prior year. As of June 30, 2026, the company held 2.6527 billion yuan in cash, down from 3.249 billion yuan at December 31, 2025. According to company disclosures, by June 30, 2026, approximately 499 million people had donated 74.7 billion yuan through Waterdrop, aiding 3.82 million patients, while its digital clinical trial platform had enrolled 17,052 patients.

Compliance and trust: Where is the line for deducting from life-saving funds? The controversies extend well beyond fees. On the insurance sales side, Waterdrop Insurance has a checkered compliance record. In November 2021, it was fined 1 million yuan by the former China Banking and Insurance Regulatory Commission for misleading "first month 0 yuan" and "first period 0 yuan" sales tactics. In August 2025, its Hubei branch was fined 100,000 yuan for inaccurate business information. Black Cat Complaint platform data shows that as of March 2026, there were roughly 2,846 complaints related to Waterdrop Insurance, mainly about诱导投保 (induced policy purchases), automatic renewal issues, and claims difficulties.

On the fundraising side, a trust crisis continues to spread. A 2019 media expose about salespeople "sweeping buildings" to solicit donations caused an uproar, leading Shen Peng to issue a public apology and promise corrective action. In August 2022, the topic "Waterdrop" topped Weibo hot searches after media reports claimed "crowdfunding intermediaries could take up to 70%." Waterdrop subsequently stated that such "intermediaries" were malicious third-party organizations unrelated to the platform.

In December 2024, the Ministry of Civil Affairs officially designated Waterdrop, Qingsong Chou, and Nuanxin Huimin as personal求助 network service platforms. The "Measures for the Administration of Personal Assistance Network Service Platforms" clarify that platforms may charge reasonable fees, but must operate on a break-even or minimal-profit basis, with fee standards made public, announced in advance, and requiring explicit consent from fundraisers. Transparency of fee announcements remains a key point of public contention. Many fundraising families and donors still assume crowdfunding platforms are charitable, low-fee, or free, and lack clear awareness of the combined 8% platform fee plus 0.6% channel fee. When nearly a tenth of life-saving donations fueled by strangers' goodwill is withheld, questions persist: Is it reasonable for operating costs to be borne by donors' funds, and where exactly is the profit boundary for charitable platforms?

Additionally, the financial report disclosed a subsequent event: after June 30, 2026, a wholly-owned subsidiary signed a secured term loan of US$40 million with an independent third-party borrower at an annual interest rate of 10%, due in 24 months, secured by the borrower's limited partnership interests in a private equity fund. Given the company's declining cash position, this capital move also warrants attention. He who wins the people's heart wins the world—this applies to Waterdrop as well. The most urgent issue for the company is not whether the fee should be 8% or 6%, but how to make the boundary between commercial logic and its charitable mission clear, transparent, and trustworthy.