Product Managers Prepare For The Next Step In Making Payments

Facial recognition may be the next step in payment systems
Facial recognition may be the next step in payment systems
Image Credit: Jeff Hitchcock

In order to make sure that people want to buy their products, product managers have to stay on top of changes in the technology that people use to make payments. This used to be fairly easy: once upon a time everyone used cash, then they migrated to using credit and debit cards, next came PayPal and the like. Over in China product managers are once again moving forward in the area of payments and they are making changes to their product development definition. Chinese product managers are trying to get people to put their mobile phones away and make payments using facial recognition systems.

How Can You Use A Facial Recognition System To Make A Payment?

In China there are two large mobile payment networks. These are operated by Ant Financial Services Group and by Tencent Holdings Ltd. Their services are called Allpay and WeChat Pay. Product managers at these firms are competing to dominate the new field of facial recognition payment systems. Both companies are in the process of installing their own branded facial-recognition systems at retail points-of-sale throughout China. The product managers are marketing their screens as being a way to speed up sales at stores and improve efficiency.

Both companies are approaching this market differently. In just a few months, both companies have started to roll out their facial-recognition systems along with an upgrade to them. Allpay currently has over 700 million active users in China. They were the first to launch a facial-recognition payment machine for checkout cashiers. Later, WeChat Pay unveiled its facial-recognition system. The WeChat Pay system can either scan a QR code that is on a customer’s phone or it can scan their face. The system used is based on the customer’s preference. Following this, Allpay brought a new system to market that was smaller. This one is the size of an iPad Mini and costs a store approximately US$290. This cost was roughly 1/3 of the cost of Allpay’s initial system.

The people who study the market for payments believe that the new breed of facial-recognition systems is here to stay. The thinking is that in China, facial-recognition systems have developed into a fairly mature market and will probably be adopted as a standard feature for cashless transactions in the future. This is a big deal because together, Allpay and WeChat Pay currently handle roughly 90% of all third-party mobile payments in China. Last year the number of transactions totaled $23.16 trillion dollars. Clearly handling even a small portion of this market would look good on anyone’s product manager resume. Allpay and WeChat Pay both collect a small fee from retailers when customers use their payment system. Growth is slowing in user numbers and transaction volumes. This means that product managers at both companies are fighting to get customer to use their systems more.

What Does The Future Hold For Facial Recognition Systems?

The company Ant has announced that they are preparing to spend $434 million to subsidize merchants who purchase their facial-recognition system. They are also planning on providing financial rebates to customers who make purchases with the new systems. These systems are new and neither company is revealing how many merchants have already implemented them. However, the machines have already started to show up in grocery stores and hospitals. In order operate correctly, both machines contain what is called a “three-dimensional camera” which is used to capture enough facial detail to verify a customer’s identity.

In China, facial-recognition technology has become a big business. It is currently being used in everything from corporate and government surveillance of its employees and citizens to allocating supplies to customers. A great deal of investment has been made into the companies that develop the facial-recognition software. When customers use the Allpay facial-recognition system, the first thing that they have to do is to link the service to their Allpay account by entering a phone number. Once they have done this, they can then use the machines to make payments without having to use their phones.

With new technology comes new concerns for the customers who are using it. In China, customers who are being offered the facial-recognition technology are already expressing some privacy concerns. A survey of potential customers has revealed that 85% of mobile payment customers were willing to make payments using biometric systems such as facial and fingerprint recognition systems. However, 70% of the same customers expressed concern about the safety of their personal data as being one of their biggest issues. Facial-recognition systems do not operate seamlessly all the time. The initial linking of a face to an Allpay account can be difficult to do and may require multiple attempts. Additionally, if the facial-recognition camera is pointed to high it may have difficulty capturing the person’s face.

What All Of This Means For You

As product managers, we want the purchasing of our products to be as easy and as seamless as possible for our customers. In China, a new type of payment system is being implemented, facial recognition. Product managers are going to have to take the time to fully understand this new technology and how it may impact the products that we offer and our product manager job description.

In China there are two firms that are competing for the mobile payments market. These firms are Allpay and WeChat Pay. Allpay was the first company to offer a facial-recognition system but then WeChat Pay offered one that could read QR codes or a person’s face. Allpay followed up their initial offering with a much smaller system that cost a great deal less. It appears as though facial-recognition systems are here to stay. Allpay and WeChat Pay control most of the mobile payments that are made in China and they make money off of each payment so they want to make it easier for people to use their systems to pay for things. Allpay has announced that they will pay both merchants and customers to use their new facial-recognition system. Facial-recognition systems are big thing in China and firms are working to make the initial sign up to use one easier to do. Personal privacy issues are on customer’s minds and the systems do not always work correctly all the time.

We are on the edge of a new way of making payments. The arrival of facial-recognition technology means that no longer will customers have to carry credit or debit cards or even their phones with them when they want to buy something. There will be, of course, privacy and security issues that will have to be worked through, but if product managers can solve these issues, then perhaps we may have found a way to make purchasing our products even easier for our customers to do!

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think that product managers could do to reassure customers about the privacy of their facial-recognition data?

Click here to get automatic updates when The Accidental Product Manager Blog is updated.
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

It almost goes without saying that we all know about Amazon – the book seller who has turned into the seller of just about everything. What you may not know about Amazon is that they decided a while back to that they were going to enter into the lucrative video gaming market. With the power of Amazon behind you, you’d think that there was no way that they could ever not be successful. However, so far things have not gone the way that the Amazon product managers had wanted it to go. What are they going to have to do to turn their product development definition around?