J.P. Morgan and PopID are introducing biometric payment terminals that use face recognition for … [+]
Checking out at restaurant and retail locations is getting easier. Five years ago, in my book Friction, I described how HEMA stores in China were using facial recognition for payment. It’s taken longer than I expected, but now J.P. Morgan and PopID are demonstrating a pay-by-face system at select Whataburger restaurants and other locations.
Biometric technology has long promised to speed up how we interact with the world around us. From unlocking our phones to accessing secure buildings, biometrics have steadily gained traction. Now, this technology is taking another step forward in the retail space as J.P. Morgan Payments and PopID use facial recognition to process everyday transactions.
I discussed the new technology with Prashant Sharma, Executive Director of Biometrics and Identity Solutions at J.P. Morgan Payments. The pandemic accelerated interest in biometric payments, he explained. “Almost everything went to online e-commerce. And then when people started coming back to in store, they expect the same kind of personalized, easy experience.”
How The Technology Works
The pay-by-face system is designed to be as seamless as possible for the user. Customers begin by enrolling in the system, where they take a photo of their face using their smartphone or at an in-store kiosk. This image is then converted into a secure, encrypted template and stored in the cloud.
When it’s time to make a purchase, the customer simply looks at a camera positioned at the checkout. The system quickly matches the live image with the stored template, verifying the customer’s identity and completing the transaction—all without the need for a phone, card, or cash. The whole interaction takes just seconds.
The Business Case For Biometric Payments
For businesses, the benefits of adopting biometric payments are clear. By cutting down the time it takes to complete a transaction, companies can serve more customers in less time. This increase in efficiency not only improves customer satisfaction but can also lead to higher revenue.
Moreover, integrating facial recognition into loyalty programs can further enhance customer engagement. At Whataburger, for example, customers who enroll in the biometric program can seamlessly check into their loyalty accounts and make payments at the same time, with just a simple glance. No more digging through apps to find a QR code—just look, pay and go.
Consumer Reactions And Adoption
So far, consumer feedback on the pilot programs has been overwhelmingly positive. Many users appreciate the added convenience, and some even find it fun to use. Whataburger customers, in particular, have responded well to the new system, with many expressing their enthusiasm for the streamlined process.
Early results are promising, with biometric payments already speeding up transactions and increasing ticket sizes at participating locations. As more consumers become familiar with the technology, adoption rates are expected to rise.
Biometrics For High-Friction Retail Environments
Theoretically, biometric identification can be used in any payment or loyalty process. Even uses like checking into your gym are possible. But, there are some use cases where the financial benefits to the business would more quickly justify investing in integrating biometric technology with their payment and loyalty systems.
“The key value proposition is faster checkout speed,” Sharma notes. “We want to focus on the use cases where friction is a big challenge.” He offers examples like quick service restaurants, events, stadiums and convenience stores. These are all businesses where surges in customer counts can create lines, delays and lost business.
Facial Recognition Concerns And Challenges
Facial recognition technology comes with its share of concerns. Governments around the world use it to speed up airport security and spot wanted criminals, but also to track citizen movements and suppress dissent. Groups as diverse as the American Civil Liberties Union and the American Library Association have opposed facial recognition use.
Two years ago, the IRS cancelled plans to use facial recognition to identify taxpayers after opposition from privacy advocates and lawmakers. The City of Portland bans use of facial recognition by businesses, and the listed exceptions do not include payment systems.
J.P. Morgan Payments and PopID are aware of these concerns and have implemented robust measures to protect user data. The biometric data is encrypted and stored securely in PopId’s cloud. Sharma says that J.P. Morgan will continue to uphold its own rigorous data security standards for customer data.
Customer hesitancy to give biometric data is another issue. “It’s absolutely a sensitive topic,” Sharma notes. But he said customers become more accepting when you point out how often they are already using and sharing biometric data – unlocking their phone, accessing mobile banking, speeding up air travel with Clear, Global Entry and TSA Pre, and so on.
Amazon One Vs. PopID
The facial recognition technology being promoted by J.P. Morgan and PopID is positioned to compete with Amazon One’s palm recognition system. Amazon One also integrates with a retailer’s IT infrastructure to combine loyalty and personalization with payment. Amazon One is used by all 500+ Whole Foods supermarkets in addition to other Amazon and third-party stores.
Amazon One uses a combination of the palm surface and subcutaneous images and claims 99.9999% accuracy. The company points out that palm recognition offers a high level of privacy because palms can’t be scanned from a distance and palm data is linked to a payment method rather than an individual. And, according to one recent survey, Amazon is the nation’s most trusted brand.
On the other hand, neither J.P. Morgan nor PopID are competitors to the retail stores impacted by Amazon’s e-commerce juggernaut. Retailers might feel better about integrating their customer systems with a trusted bank brand than a unit of their arch-competitor. Plus, people are far more familiar with using facial recognition than palm scanning.
But Are Biometrics Fun?
A recent study of consumer intent to use biometric payment systems confirmed that people were open to a faster, easier checkout process and that privacy concerns could hinder adoption. Neither finding is surprising. But there was one result I didn’t see coming: the researchers found that “hedonic motivation” could be a significant factor. In other words, if consumers find using the biometric system fun or satisfying, they are more likely to adopt it.
How can the hedonic appeal of a payment utility be increased? That’s not easy when a transaction should take just a few seconds at most. I’ve found the Clear booths at airports to be a bit annoying when they nag me to move closer or to back up. Not a hedonically positive experience.
On the other hand, the Amazon One scanner shows a circle representing your palm. You move your hand up and down and sideways, and the circle changes size and moves side to side. When you center it, it turns a satisfying green. The process takes just a second, but it has the feel of a very short video game. That’s definitely more appealing than a robotic voice barking orders at you.
“Hedonic motivation” will increase acceptance of biometric payment methods.
With this research in mind, perhaps biometric recognition success could be rewarded with a burst of confetti on the screen, a little sonic fanfare, or other positive stimulus. That might be a hedonic reward sufficient for a second or two of effort.
The Future Of Biometric Payments
The success of these early trials suggests that facial recognition could soon become a common method of payment across America. Along with other forms of biometrics like palm or fingerprint recognition, these technologies could be a big step in not only saving time and increasing store volume, but in eliminating the need for customers to get out their wallet or open a mobile app.
Even small amounts of friction can change customer behavior. Today, Whole Foods has taught me that I can check out and get my Prime discounts with just a swipe of my palm. When I have to get both my credit card and phone out at other supermarkets, I am annoyed by the extra effort, as minimal as that may be.
J.P. Morgan Payments and PopID are planning to expand biometric payments to more retailers and locations in the near future. As the technology evolves, it’s not hard to imagine a future where forgetting your wallet and even your phone is no big deal — your physical presence will be all you need.
