The Asia Global Payment Summit. Bali, Indonesia. 10-11 October 2019

Biometric Payments Spread to Fifth-tier Chinese Cities as IoT Growth Surges

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Facial scan payments are spreading to China’s smaller population centres as the country’s Internet of Things (IoT) sector posts roaring growth.

Payments giant China UnionPay announced on 10 December 2018 that it would be further promoting the use of facial scan payments, enabling shoppers at multiple vendors in Beijing and Shanghai to make purchases without the use of either bank cards or mobile devices.

UnionPay joins China’s other payment giants, Alipay and WeChat Pay, in driving the adoption of facial scanning and other forms of biometric payment to facilitate consumer transactions.

A report from Securities Daily says that this push is bringing facial scan payments technology to many unlikely parts of China, including small fifth-tier cities.

According to the report Alipay recently installed automatic payment devices at a chain supermarket in the county-level city of Xinzheng (新郑) in Henan province.

The devices scan the faces of consumers before prompting them to enter the final four digits of their mobile phones in order to complete transactions.

The process does not require the use of mobile phones, bank cards or cash, while only a single staff member is needed to oversee the operation of several of the automated facial scan payment installations.

The device has thus far proved popular with younger, more net-savvy members of the local community.

Domestic analysts expect facial scan payments to see roaring growth over the next three years following a reduction in the threshold for entry, as well as the government-driven development of infrastructure needed to support Chinese IoT.

In December the Central Economic Work Conference called for “strengthening the development of new infrastructure for artificial intelligence, the industrial internet and the Internet of Things.”

Figures from the Qianzhan Industrial Research Institute (前瞻产业研究院) indicate that China’s IoT sector reached 1.15 trillion yuan in scale in 2017, for YoY growth of 23.66%.

In 2018 the Chinese IoT sector posted YoY growth of 17.39% to reach 1.35 trillion yuan, while Qianzhan forecasts that it could exceed 1.8 trillion yuan in scale by as early as 2020.

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