Alipay, Alibaba Group's third-party online payment service provider, refuted Tuesday an accusation from Industrial and Commercial Bank of ­China (ICBC) that Alipay's quick transfer service is "illegal."

ICBC said it lowered the upper limit of Alipay's quick transfer service in accordance with a regulation released by China Banking Regulatory Commission (CBRC) in 2011, the 21st Century Business Herald newspaper reported Tuesday.

Later on the same day, ICBC announced that it has closed service interfaces between Alipay's quick transfer service and ICBC's branches except one with ICBC's provincial branch in East China's Zhejiang Pro­vince, news portal sina.com reported Tuesday.

ICBC said the interface reduction is to avoid potential management risks and it has no impact on quick transfer "if Alipay cooperates with ICBC," according to the report.

But an independent analyst of online payment who declined to be named told the Global Times Tuesday that the reduction means new users outside Zhejiang Province cannot link new bank cards to Alipay's quick transfer service.

Wang Hong, director of the settlement and cash management department of ICBC, said CBRC released a regulation on e-banking information in August 2011, requiring that the customers' identity should be verified before activating any payment service provided by third-party payment platforms, the report said.

According to the regulation, Alipay's quick transfer service has been illegal for the past se­veral years, the report said.

ICBC has been negotiating with third-party payment platforms since 2011 but the latter insisted users' convenience was a priority and disagreed with sending customers to banks to register before using the quick transfer service, according to Wang.

Also on Tuesday, Alipay posted an article written by Tang Jian, one of its employees, on its official Weibo account, that stated that before users make their first quick transfers, Alipay sends their personal information including name, bank card number, ID number and mobile phone number to banks for verification, which means its quick transfer service meets the requirement in the CBRC's regulation.

Tang said China's Big Four banks, including ICBC, all put a cap on quick transfers via Alipay, in a demonstration of their market monopoly, to protect their own online payment services.

According to Wang, the limit is only for quick transfers but not all third-party payment services.

However, Tang noted that the restriction will have a huge negative impact on the mobile payment service.

The quick transfer service only requires user's name, ID number, bank card number and mobile phone number to link the service with their bank cards. Afterward users only need a confirmation code sent to their mobile phone to finish each payment, the report said, noting the original intention is to facilitate small payment.

In late February, ICBC cut down the upper limit of each quick transfer from 50,000 yuan ($8,065) to 5,000 yuan and lowered the monthly limit from 200,000 yuan to 50,000 yuan. If the payment is higher than the limit, customers can go onto the bank's online website to pay.