Pay by Face – the future of digital payments?

The COVID-19 pandemic that has impacted countries around the world may well have brought forward the timeline for the rollout of Pay by Face technology. 

A contactless experience is one of the key drivers of a move towards the adoption of Pay by Face, as people become more conscious of the number of daily touchpoints they make, whether it’s paying for their coffee, scanning their travel card, or doing their weekly grocery shopping. 

Back in September 2019, The Guardian reported that “China’s shoppers are increasingly purchasing goods with just a turn of their heads as the country embraces facial payment technology.” The article goes on to say, “In a country where mobile payment is already one of the most advanced in the world, 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.” 

What this means for shoppers is that they can now head out to do their shopping without taking anything with them. No purse. No wallet. No phone. 

It’s through the advancements in facial recognition technology that have made Pay by Face a reality for many and it’s not just China who are early adopters. 

Biometric Update reported in December 2019 that Nets has rolled out biometric facial recognition payment trials for 1,000 people in Copenhagen, Denmark to see how people react to biometric authentication.  

The LA Times also reported in August 2020 that Pasadena company PopID is rolling out the nation’s first payment system based on facial recognition at a smattering of restaurants near its headquarters, including regional chains like Lemonade. 

So, with Pay by Face starting to roll out across the world, just what is it and how will it work? 

How does paying with your face work? 

Payment by Face will differ from country to country and retailer to retailer depending on the technology they choose to adopt. 

China is perhaps the easiest example to showcase how paying with your face works at the most basic level.  One thing to remember about China is that facial recognition is already commonplace – it is widely used in security cameras as well as by police so people are already familiar with and comfortable with their face being used for identification and authentication. 

The major rollout in China and the ease of rollout was also made possible by two other factors: WePay and Alipay.  

WeChat is used by nearly everyone in China and the WePay secure payment system is how many transactions are already completed – from major retail stores to street vendors. Alipay is a secure payment system offered by Alibaba and one of their affiliates, Ant Financial introduced Smile to Pay as a way of making secure payments without the need for your smartphone. 

Smile to Pay leading the way in China  

So how does Alipay’s Smile to Pay system work? 

Customers who already have the Alipay app on their smartphone can now enable the facial recognition technology for the app. With the technology enabled, they can then go into merchants that offer Smile to Pay and pay seamlessly. 

Customers then place their order on the screen and look towards a 3D camera installed in the POS. The camera scans the customers face to verify their identity and then deducts the payment using Alipay. 

If they want, the customer can also use phone number verification options as an extra security measure. 

Alibaba’s Smile to Pay technology is interwoven in its goal to integrate best-loved elements of online and offline shopping.  

Will Pay by Face take off in the western world? 

Whilst Smile to Pay is already a big hit in China, will the western world be as quick to adopt this emerging technology? 

It is inevitable that we will all one day be using our faces to make a payment. The speed of integration by retailers in western countries, however, is expected to take longer than in China for example. 

There are still a number of concerns over the security of using your face to make payment transactions as well as issues around the storing, collecting, monitoring, and management of a lot of data required to power such a payment system. 

One crucial factor that could influence the success of Pay by Face in the western world is onboarding. A Nielsen Norman Group case study into facial recognition payments in China found that whilst take up of Pay by Face had been significant, “4 out of 5 participants we interviewed still preferred QR-code scanning, even after they experienced this new, rapid way of paying.” 

Often one of the biggest barriers to the adoption of new technology is the fact that users hate change. Whilst this will undoubtedly be a factor that Pay by Face companies will need to consider, the Nielsen Norman group found a bigger problem – the onboarding experience (or lack thereof) didn’t make users feel secure enough. 

The case study goes on to say, “Although facial-recognition payments were fast, the onboarding experience for the first-time users was poor, and, as a result, they became suspicious, did not trust the technology, and said they did not want to return to it.” 

These are valuable lessons for companies hoping to launch Pay by Face in other countries and could help to overcome the barriers to adoption that will inevitably come with the rollout of new technology like Pay by Face. 

One success story from the USA when it comes to the adoption of Pay by Face is CaliBurger – a California burger chain. Working with NEC America (NECAM), they successfully launched AI-enabled kiosks back in 2017, initially as a pilot that was then rolled out to branches across the state. Cali Group worked with NECAM to integrate NEC’s NeoFace facial recognition technology into the kiosks. 

Summary 

There is no doubt that Pay by Face will start to roll out to countries around the world, however, how quickly the technology can be rolled out will depend largely on the trust that the general public will have around the security of their personal information and the storage of that data. 

The need for a contactless payment experience has been expedited by the COVID-19 pandemic, however, there still remains a lot of resistance to the use of facial recognition technology around the globe. The fact that China is already accustomed to the use of facial recognition technology in day to day life means that the jump to Pay by Face was not as big as it will be in many western countries. 

If it is to be a success, Pay by Face vendors need to ensure their onboarding process is watertight and ensure that they put customers’ minds at ease about the security of using such a system and what will happen with the personal data that is stored. 

Only time will tell whether Pay by Face will be successfully rolled out across the world – right now, it feels like we are at a crossroads and the next moves will be crucial in determining the direction in which Pay by Face goes.