Some of the leading Chinese digital payment companies, such as Ant Group and WeChat, have invested money and energy in recent years to promote facial recognition payments, which use camera screens to locate the customer's face and pay from the customer. his online account without him needing to use cash – not common in China – or an app on his smartphone. Facial recognition payments are supposed to be more convenient for customers, but three years after their launch, they still haven't achieved much success, the Wall Street Journal explained.
Ant and WeChat, but also many other smaller companies, have invested or promised to invest hundreds of millions of dollars in the machines needed for face payment. Ant, in particular, in April 2019 announced an investment of 3 billion yuan, corresponding to just under 400 million euros. The machines are screens – which can be as large as a TV set vertically or as small as a tablet – placed near the checkout counters which, thanks to the integrated camera, recognize the customer's face. When it is time to pay, the customer clicks on the touch screen on the option for facial payment, the camera is activated, the recognition takes place and the payment is done.
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Analysts heard by the Wall Street Journal, however, say this technology is failing to spread as much as the companies that produce it would like, and there could be two main reasons. On the one hand, the payment process would actually be quite cumbersome, to the point of discouraging customers. On the other hand, many Chinese citizens fear that the use of facial recognition technologies for payments could result in an excessive violation of their privacy.
Over the past decade, China has become one of the most innovative countries in financial and payment technologies. The Chinese have moved from the mass use of cash to the mass use of smartphone payment systems, without adopting the credit and debit cards which are still widely used in Europe and North America. The most popular digital payment method by far is the scanning of a QR code: you open an app, scan the code provided by the shopkeeper and pay.
In 2018, according to an estimate prepared by Daxue Consulting, 83 percent of all payments were made with smartphones, and the share continues to increase year on year.
Ant, through its Alipay payment service, began installing speakers with facial recognition in 2017 in KFC restaurants. The first machines were the size of televisions, but a new version, released in December 2018 and called “Dragonfly”, was the size of an iPad. The second generation of Dragonfly is even smaller, and the payment method is called “smile to pay”. WeChat's facial payment machines, on the other hand, are called Frog: each costs the shopkeeper between 200 and 250 euros but companies offer incentives to pay back.
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One of the problems, we said, is that for now, facial payment is not so much more convenient than payment via smartphone. First of all, because in the months of the pandemic, customers wore masks on their faces, and the system was unable to recognize them. But even without a mask, writes the Wall Street Journal, the steps required to pay are often many and a bit cumbersome.
When using facial payment for the first time, the customer must open the Alipay app to activate the specific function, then take a selfie to send the image of their face to the system and enter one or more codes sent to the smartphone or to the car. Some of these steps can be done automatically, for example if Alipay or WeChat already have the customer's identity card in memory. This registration process should only be done once, but often has to be repeated in order to use different models of machines in different shops.
Some machines have tried to incentivize the use of facial payment by inserting beauty filters that enlarge the eyes and eliminate skin imperfections when the camera frames the customer (however, the system analyzes the unadorned photo), but with little success.
Nielsen Norman Group, a consultancy that evaluates the user experience of products, did an analysis in May of how some facial payment machines work and concluded that many have a confusing interface and discourage the user from using them. In other cases, certain aspects of the operation of the machines could make the customer uncomfortable and make him fear that his privacy is in danger, and this is the second factor that for now determines the failure of the facial payment.
One of the reasons many analysts argued between 2017 and 2018 that facial payment would have no hindrance from spreading is that the success story of many technologies shows that convenience and speed are preferred over privacy protection in China. Furthermore, facial recognition has already been used for years in China without arousing major protests, both in the field of security and repression and in more futile areas, such as the distribution of toilet paper in public restrooms.
According to a survey by the Nandu Personal Information Protection Research Center done in October 2019, however, 80 percent of Chinese people fear that their personal information could be revealed as a result of the use of facial recognition technologies, and it is understandable that this fear is greater when it comes to linking technology to payment systems. 41 percent of the more than 6,000 respondents said they were willing to use face payment, while 39 percent said they don't care.
In the same period, the Global Times, an English-language nationalist tabloid linked to the Chinese Communist Party, also wrote that the poor success of facial payments was due “above all to consumers' concerns about privacy” and that a second reason were “concerns about the security”.
Late last year, an artificial intelligence startup named Kneron announced that it had fooled several facial recognition systems, including Ant's and WeChat's payment machines, using a 3D mask of a human face. However, both Ant and WeChat have security procedures in their payment systems, which require the use of passwords and other codes.
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In January of this year, the Chinese government introduced new stricter rules for those who use facial recognition technologies, which sanction the indiscriminate collection of biometric data (such as fingerprints and facial features) and require those who keep them to comply with safety and confidentiality rules.
Both Ant and WeChat, however, have sufficient funds to insist on the diffusion of the technology. Ant is the world's most valuable fintech (finance technology) startup. It started out as the payments section of Alibaba, the ecommerce multinational, but then it was separated in 2011 and became an independent company. Today it is valued at 150 billion dollars, and should make its debut on the Hong Kong and Shanghai stock exchanges by the end of the year: Ant's stock market entry should be the richest of the year, and perhaps one of the richest ever in the technology sector.
WeChat, owned by the Chinese giant Tencent, is the most famous and used Chinese app. Born as a messaging service, WeChat is defined by experts as a “superapp”, with which it is possible to communicate, consume audio and video content, book a taxi or takeaway food and much more, as well as making payments.
