China is among those few countries that have widely adopted the mobile payments system, making the system quite easy to use compared to the traditional ways. The popularity of mobile payments in China was driven by the use of QR codes, making the process super easy as the user just need to scan the code to make payments.
But now, since the QR codes are gaining more popularity outside China, the tech giants in the Chinese market are moving towards a newer system for mobile payments — facial recognition. Companies like Ant Financials, an arm of Alibaba and WeChat backed by Tencent, have already started using facial recognition.
The facial recognition-based payments system provides more ease and security as well as portability compared to the QR codes method. Also, the use of this new method could further boost the usage of mobile payments as it has the potential to bring a new wave of less tech-savvy users, such as the elderly.
Alipay first rolled out its Dragonfly facial recognition system, which is an upgrade of its Smile-to-Pay system, in December last year. Since then, the company has expanded it to over 300 cities in China.
Following its footsteps, rival WeChat Pay also started offering its device to merchants around three months later. The device is capable of scanning both a customer’s face as well as QR codes for payment. However, the company has not shared statistics.
The adaptation of this new system of facial recognition has made the shopping experience a breeze. During checkout, all the user needs to do is choose facial recognition to pay and look at the tablet’s camera. Once authorized, the amount will be deducted from the user’s account. Now, the user doesn’t need to take out the phone and scan the QR code and then proceed with the steps to make payment.
This is also leading to less reliance on cashiers. For instance, Alipay is now offering solutions such as vending machines and self-checkout machines that both use face-scans to process payments.
The battle for the mobile payments market share in China is majorly between two giants — WeChat Pay and Alipay. As per the reports, both the companies jointly accounted for over 90 percent of China’s mobile payments last year. Both are almost equal when it comes to ticket size, with WeChat Pay accounting for 45 percent of total transaction amounts and Alipay for 46 percent, reveals market research firm Ipsos.
There are currently about 583 million users who are using mobile payments technology. With over 562 million Chinese still remain to get connected to the internet, the market has a lot of room to grow.
(Source)
