It is well-known that China leads the world in mobile payments. Ever since the country’s technology boom, people are moving further away from cash payment. Apps such as WeChat, which launched in 2011 and has accumulated a staggering 900 million active monthly users, as well as Alibaba - are propelling this cashless revolution.
Facial recognition technology is reshaping the way consumers in China pay for their purchases, just as mobile payment has done in the past few years. Customers can make a purchase simply by posing in front of point-of-sale (POS) machines equipped with cameras, after linking an image of their face to a digital payment system or bank account. Rather than entering a password, the machine recognises you from a scan of your face.
Facial recognition uses mathematical algorithms to capture, extract, compare and match a face to a person’s identity. First, physical samples are collected through a scan and then the data is extracted for comparison purposes. The final stage involves making a decision about identity matches based on an existing image stored in a facial database. The entire process only takes a few seconds thanks to the grace of artificial intelligence.
Indeed, facial recognition is gaining ground as a technology for identity verification in China. It has been spreading by leaps and bounds in the past couple years, some 1,000 convenience stores have already installed a facial payment system, and more than 100 million Chinese have registered to use the technology. Since 2017, customers of Kentucky Fried Chicken outlets have been able to use face scans to buy food, while merchants from supermarkets to bakeries have also started to adopt the technology.
China is testing facial payment applications on subways too. The technology in Shenzen has been deployed to 18 stations with 28 automatic gate machines and 60 self-service ticket processors. It was developed by the Chinese conglomerate Tencent and is powered by a 5G network. People entering the station can scan their faces on the screen where they would normally have tapped their phones or subway cards. Their fare then gets automatically deducted from their linked accounts. Other cities such as Jinan, Shanghai, Qingdao, Nanjing, and Nanning are currently experimenting with this system.
The benefits of facial recognition technology are multifarious. It provides greater security levels for payments through biometric identity verification than other security tools. This is nearly impossible to crack like the fraud committed with other types of payment methods. Facial payment technology is also easy to integrate into an existing payment system. Further to this, it is a highly accurate process and can be fully automated for greater efficiency and reduced friction for the payment process. The software is already widely used. A survey published by China’s Payment and Clearing Association in 2018 noted that 85% of consumers were comfortable with payment through biometric method such as fingerprint than face scanning.
The battle for facial recognition payments supremacy comes as both WeChat Pay and Alipay find themselves neck-and-neck in China’s hotly-contested payments market. Although there is still a way to go before facial payment is implemented to the same extent as mobile payment, it is becoming more popular up and down the country. Scanning a barcode to make payments in China could soon be a thing of the past, as technology giants such as Tencent are now studying the use of facial and fingerprint recognition for such transactions.
In conclusion, facial recognition payments are more frictionless than current mobile payment systems, primarily because no device is needed to complete the transaction. The technology not only eliminates the need for smartphones, it also provides more convenience, offering consumers another way to make payments. In a climate in which mass surveillance is a growing concern worldwide, people in China are becoming increasingly accepting of the idea of facial recognition as a mode of payment.
