As China turns towards facial recognition payments, are QR codes on their way out?

This article is co-written by Celia Chen.

The QR code, a bar code system first invented by a Japanese automotive parts maker to keep track of components, found widespread popularity in China through the use of mobile payments.

But as the familiar square mosaic gains greater popularity outside China, the tech giants that helped to drive its adoption are already moving away from the app-based payment method to something even more portable: your face.

Photo credit: Gorilla Technology

In different cities around China, merchants from supermarkets to bakeries have adopted facial recognition payments technology from Alibaba-affiliated Ant Financial and Tencent’s WeChat Pay to make the payments process as frictionless as possible. Alibaba owns the South China Morning Post.

Why? Because face recognition technology brings the next step in payments convenience for consumers and also has the potential to bring in a whole new wave of less tech-savvy users, such as the elderly or those who struggle to read and write. On the business front, facial recognition payments are also expected to improve efficiency.

Alipay first rolled out its Dragonfly facial recognition system – an upgrade of its Smile-to-Pay system – in December last year, and since then has expanded it to over 300 cities in China.

Not to be outdone, WeChat Pay pushed out its device three months later, capable of scanning both a customer’s face as well as QR codes for payment. WeChat declined to provide statistics on its facial recognition payments coverage for this article.

Walk into a CP Lotus supermarket in Beijing today, and you’ll see cashiers equipped with Alipay-branded tablets. Customers can have their purchases rung up by the cashier, and if they choose facial recognition to pay, all they need to do is look at the tablet’s camera.

In seconds, the system recognizes who the user is and money is deducted from their Alipay account. Gone are the days of fumbling around for your smartphone, opening the right app and navigating to the QR code to make payments.

“Facial recognition payment is very convenient. It saves me time as I do not need to pick up my phone to look for my QR code. All I have to do is look at the camera,” says David Wang, a 30-year-old games developer whose first experience with Alipay’s facial-recognition payment technology was in a fruit store in the hi-tech, southern coastal city of Shenzhen.

Facial recognition payments are more frictionless than current mobile payment systems, primarily because no device is needed to complete the transaction, says Tiffany Lung, retail analyst at Tofugear, a Hong Kong-based retail solutions company.

“Facial recognition payment not only eradicates the need for smartphones, it also provides more convenience, offering consumers another way to make payments,” says Lung.

The battle for facial recognition payments supremacy also comes as both WeChat Pay and Alipay find themselves neck-and-neck in China’s hotly-contested payments market.