Amid growing adoption of facial recognition payments, the Payment & Clearing Association of China has released self-discipline guidelines aimed at tackling associated risks, reports Chinese media outlet Caixin.
The guidelines detail several principles related to user consent and data collection and storage among other topics that payment services providers should follow when using the technology for payments.
Companies using facial recognition for payments should encrypt facial image data and store it separately from data such as bank numbers and other personal information, it says, and merchants and other companies receiving transactions should not be allowed to retain users’ facial image information.
Wang Xinyue, a senior partner at Beijing law firm Anli Partners, said that in order to adhere to the guidelines, financial institutions will need to enter into formal agreements with merchants and payment recipients to restrict them from collecting and storing users’ facial image information.
Users should also have the possibility to opt-out of the facial recognition-enabled payment feature. If they decide to opt-in, however, they should be made well aware of the terms of the service agreement.
The guidelines also state that verification should not be solely based on facial prints, and, depending on risk, multi-factor authentication should be introduced for extra security. Additionally, companies processing payments should establish a compensation mechanism and set aside budget for risk plans, insurance and emergencies.
Facial recognition payments in China
In different cities across China, merchants have adopted facial recognition payments technology from Ant Financial, Alibaba’s financial affiliate, and Tencent’s WeChat Pay to provide a frictionless payments experience.
Additionally, the technology has been praised for potentially bringing in a whole new wave of less tech-savvy users, such as the elderly and those who struggle to read and write.
In 2018, about 68 million customers used facial recognition for payments. Last year, that number almost doubled to reach 118 million, and in the next two years, it is expected that 760 million people will be using facial recognition payments, representing almost half of China’s population.
Most recently, state-owned UnionPay and Tencent have announced a new partnership to boost mobile payments and explore capabilities including facial recognition-based payments.
Telpo, a leading provider of facial recognition payments devices in China, is currently testing a new point-of-sale (POS) device for payments with biometric facial recognition in Spain, Denmark and Canada. Deployment of the TPS988 in China has already reached live operation.
But payments is far from being the only area where facial recognition is being applied in China, in fact the technology has become embedded everywhere, from airports to hotels, e-commerce sites, and even public toilets as China.
This month, in Shanghai, a new drug collection terminal equipped with facial recognition technology was launched at pharmacies and hospitals in an effort to prevent abuse, reports Abacus. The new terminals require an identity check using face scans before customers can get their prescription medicines.
