Saving face: Facial payments come to Chinese shoppers

Despite privacy concerns, customers seem unperturbed by facial recognition payments. (AFP)
Updated 05 September 2019

Saving face: Facial payments come to Chinese shoppers

  • Customers make purchases by posing in front of point-of-sale machines equipped with cameras

BEIJING: No cash, no cards, no wallet and no smartphones: China’s shoppers are increasingly purchasing goods with just a turn of their heads as the country embraces facial
payment technology.

China’s mobile payment infrastructure is one of the most advanced in the world, but the new systems — which require only face
recognition — being rolled out nationwide could make even QR codes seem old-fashioned.

Customers simply make a purchase 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.

“I don’t even have to bring a mobile phone with me, I can go out and do shopping without taking anything,” said Bo Hu, chief information officer of Wedome bakery, which uses facial payment machines across hundreds
of stores.

“This was not possible either at the earliest stage of mobile payment — only after the birth of facial recognition technology can we complete the payment without anything else,” he explained.

The software is already widely used, often to monitor citizens — it has been credited with nabbing jaywalkers and catching criminals.

But authorities have come under fire for using it to crack down and monitor dissent, particularly in China’s surveillance-heavy region of Xinjiang.

“There’s a big risk... that the state could use this data for their own purposes, such as surveillance, monitoring, the tracking of political dissidents, social and information control, ethnic profiling, as in the case with Uighurs in Xinjiang, and even predictive policing,” said Adam Ni, China researcher at Macquarie University in Sydney.

“This is certainly one of the more contentious aspects of the gathering of facial recognition data and the usage of them.”

Despite the concerns over data security and privacy, consumers seem unperturbed as facial
recognition payment hits the
high streets.

Alipay — the financial arm of ecommerce giant Alibaba — has been leading the charge in China with devices already in 100 cities.

The firm is predicting enormous growth in the sector and recently launched an upgrade of its “Smile-to-Pay” system, using a machine roughly the size of an iPad.

Alipay will spend three billion yuan ($420 million) over three years on implementing
the technology.

Tencent, which runs the WeChat app with 600 million users, unveiled its new facial payment machine called “Frog Pro” in August, while a growing number of start-ups are trying to tap into the burgeoning industry.

“(Facial payment) certainly has the potential to become popular with the wide push from major mobile payment players,” said Mengmeng Zhang, an analyst
at Counterpoint.

“Alipay is spending (billions) to popularise facial payment technology through giving out subsidies for vendors and rewards for consumers that use facial payment,” she added.

At the IFuree self-service supermarket in Tianjin, a 3D camera scans the faces of those entering the store — measuring width, height and depth of the faces — then another quick scan again at check-out.

“It’s convenient because you can buy things very quickly,” said retiree Zhang Liming after using facial payment for her groceries.


Blame game as wheels come off India’s auto sector

Updated 50 min 46 sec ago

Blame game as wheels come off India’s auto sector

NEW DELHI: When India’s Finance Minister Nirmala Sitharaman claimed that a preference by millennials for ride-hailing apps was contributing to a painful slump in car sales, it sparked an online backlash from furious youngsters.

They started a campaign using ironic hashtags such as #BoycottMillennials and #SayItLikeNirmalaTai last week to push back against older generations blaming them for today’s problems in society.

While data shows firms such as Uber and Ola are popular with younger consumers more comfortable with shared mobility and digital trends, analysts say the auto industry’s problems run deeper than that — and it is facing more serious bumps in the road.

With a population of 1.3 billion people, India is the world’s fourth-largest car market and one where owning a vehicle is as much a status symbol as a means of transport.

But the country’s once-booming auto sector — seen as an important barometer of overall economic health — is in the slow lane, with sales slumping for the 10th-straight month in August.

“The minimum (priced) car that you can get nowadays starts from six to seven lakhs ($8,500 — $9,800),” university student Somya Saluja told AFP.

“So it’s much easier to pool-in rather than to buy a new car.”

Even India’s richest banker, Uday Kotak, recently said that his son was more comfortable using ride-sharing apps than owning a car.

Uber and Ola reportedly facilitate some 3.65 million daily rides.

Still, Avanteum Advisers managing partner VG Ramakrishnan told AFP the key reason for the drop in car purchases was economic.

“I think the slowdown is primarily because consumer confidence is low and income growth has really been impacted in the last couple of years,” he told AFP.

India’s economic growth slowed for the fifth-straight quarter in April-June to reach its weakest pace in five years.

Banks are also more reluctant to lend owing to a liquidity crunch caused by the near-collapse a year ago of IL&FS, one of India’s biggest shadow banks — finance houses responsible for significant consumer lending.

There are also extra production costs caused by new rules requiring cars to be compliant with emissions and safety standards, while a 28 percent goods and services tax (GST) introduced in 2017 has dampened demand, analysts said.

“Cars are increasingly becoming unaffordable now because of so many taxes,” Karvy Stock Broking auto analyst Mahesh Bendre told AFP.

“To put things in perspective, if you buy a car in India, at least 40-45 percent of costs go to the government in terms of taxes and registration charges and so on.”

A year ago, India displaced Germany to become the world’s fourth biggest car market, having clocked up annual sales growth above seven percent for several years.

But the promising growth ride is screeching to a halt, with passenger car sales tumbling this year, including a 41 percent drop last month — the worst since records began more than 20 years ago.

Aside from passenger cars, sales of commercial vehicles, motorcycles and scooters have also been hammered.

With the industry — a major employer in India — contributing more than seven percent to total GDP and almost half of manufacturing GDP, the potential fallout from an extended slowdown is sending shockwaves through the economy.

Manufacturers are reducing production and cutting jobs, which is also affecting related industries such as auto component manufacturing and at dealerships, totaling about seven percent of India’s total workforce, Bendre said.