Biometric technology is paving the way for the future of facial payments
Current cashless payment methods still pose the risk of password disclosure and information theft... Therefore, biometric technology was born as a safe and convenient solution, opening the door to the future of facial payment.
Biometric payment options are becoming increasingly popular in the US, with Apple's Face ID enabling in-app purchases, Amazon introducing palm-to-palm payment technology in stores, and financial firms from JPMorgan to Mastercard adopting the technology.
CNBC reported that the CaliExpress by Flippy automated fast food restaurant chain in Pasadena (California, USA) opened earlier this year and attracted public attention thanks to its completely robotic burger-making team. Not stopping there, the restaurant continues to bring a new innovation: customers can now pay for their meals using facial authentication.
CaliExpress uses a payment system from facial recognition technology company PopID. To activate an account, users simply register with a selfie. They can then select PopID's facial verification payment method and complete the transaction.
This isn’t the only fast food chain using the technology. In January, Steak ‘N Shake, a fast-casual restaurant chain in the Midwest, began installing facial recognition kiosks at 300 of its locations for customers to check in. The chain said using PopID takes just 2-3 seconds, while checking in with a QR code or mobile app can take up to 20 seconds.
Tech giants have been testing biometric technology
Biometric payment options are becoming more popular, with e-commerce giant Amazon introducing palm-based payment technology in 2020. Although the cashierless store model encountered numerous difficulties during testing, the technology was successfully integrated into 500 Whole Foods supermarkets last year.
American multinational financial services corporation Mastercard, a key partner of PopID, has launched a pilot of facial authentication payments in Brazil in 2022. The test has shown positive signs, with 76% of the participants saying they would recommend the new technology to friends and family. Late last year, Mastercard announced a partnership with NEC to bring Biometric Payments to the Asia-Pacific region.
“The focus of our efforts in this area is on biometrics as a secure way to verify identity, replacing passwords,” said Dennis Gamiello, Executive Vice President of Identity Products and Innovation at Mastercard, in this regard. He added that based on the positive feedback from its pilot program and research, the company will bring facial payment technology to many new markets later this year.
But as stores deploy biometric technology for a variety of purposes, from payments to anti-theft systems, consumer backlash and lawsuits are growing.
In March, an Illinois woman sued Target for allegedly illegally collecting and storing her and other customers' biometric data through facial recognition technology without their consent. Amazon and mobile carrier T-Mobile are also facing legal action related to biometric technology.
In other countries, especially China, the biometric payment system has also been relatively complete. Accordingly, customers coming to McDonald's fast food stores in China can use facial recognition technology to pay. In addition, Chinese payment giant AliPay also launched biometric payment options since 2015 and began testing the technology at most KFC outlets nationwide in 2018.
Biometric technology will help improve user experience
PopID CEO John Miller believes that the recent deal PopID signed with JPMorgan is a sign of things to come in the US and that this will be a breakthrough year for facial payment technology.
Most fast food businesses want customers to sign up for a loyalty program and earn points. That means pulling out their phones, opening an app, finding a link to a QR code, and showing it to a cashier at the counter to scan.
When it comes to paying, consumers often choose between pulling out their wallet and swiping a credit card or pulling out their phone, opening Face ID, and scanning a code. CEO Miller says PopID can simplify the process by allowing customers to pay with just a single tap of a button on the screen, then quickly looking at the camera to confirm and pay.
“We believe our partnership with JPMorgan is a watershed moment for biometric payments as it is the first time a leading financial institution has agreed to promote biometric payments for its commercial clients. JPMorgan provides the trust and assurance needed for both merchants and consumers to adopt biometric payments,” added Miller.
Clearly, consumers are becoming more comfortable with biometric technology. According to a 2023 survey by UK payments research and consultancy PYMENTS, the majority of consumers still prefer fingerprint scanning over facial recognition, but age is a key factor when switching payment methods. Gen Z consumers are more open to facial recognition than fingerprint scanning or password entry.
Meanwhile, global market research company Juniper Research (UK) also forecasted that the global biometric payment market will grow more than 100% from 2024 to 2028. By 2025, there will be 3 trillion USD in mobile payments secured by biometrics compared to about 404 billion USD in 2020.
The report finds that biometric technologies, including fingerprint, iris, voice and facial recognition, are becoming crucial to delivering engaging app experiences, as mobile payments dominate the payments landscape.
Speaking about the development of biometric technology, Mr. Sheldon Jacobson, professor of computer science at the University of Illinois (USA) said that biometric recognition technology is part of the technology chain that has developed from credit card payments to smartphones. The next natural step is to simply use facial recognition technology.
Professor Sheldon Jacobson added that concerns about privacy and facial recognition are overblown. When we post on Facebook, when we use social media, we are essentially giving up our privacy.
Despite the challenges, facial payments have the potential to become a common payment method in the future. As the technology continues to develop and privacy concerns are addressed, it is likely that we will see facial payments used more widely in stores, restaurants and other businesses.
