Alipay Vs. Wechat - The struggle continues💣💳 Part 2

In my previous article introducing the different payment methods consumers use in China when paying in stores and online, I focused on QR and QR related payments. Since the payment competition in China is mainly within the Wechat-Alipay duopoly, they are constantly looking for ways to innovate and make the consumer journey more frictionless (and win over more consumers and merchants). In this mini-article I will talk about both companies' Facial Recognition Payment.

In 2017-2018 both companies started experimenting with Facial Recognition as a means of payment, making even the all mighty mobile phone redundant (read more about it in this article by Anne Rousselot ) and by 2019 both companies had active solutions in the market. On the consumer's side, after a quick registration process you are all set. In the first usage the tablet will prompt you for 2FA in the phone of keying in your mobile number on the tablet. Up to this date (April 2025) they do not allow foreigners 🙈 to use the facial recognition function (maybe we all look the same and the algorithm can't figure it out? 😜🤖 )

The applications were used mostly in physical retail and unattended retail, in the form of a camera (or cameras) embedded in a commercial tablet. I have not seen the usage of facial recognition payment go beyond convenience stores, super markets, QSR self checkout and vending machines.

Since both companies have their own Facial Recognition algorithm and possibly also endorsed hardware, there is no interoperability between the 2 solutions and merchants need to decide whether to adopt the Alipay solution or the Wechat solution. Having said that, most merchants will allow the other providers' QR payment solution on their screen. E.g. If the Facial Recognition solution is provided by Alipay, consumers might still be able to Pay with Wechat by scanning QR.

However, it seems that Facial Recognition payments were not as successful as anticipated by Alipay and Wechat. Here are some possible reasons:

• The Covid19 pandemic and the use of masks (even though later generation algorithms could overcome that too)
• Concerns about security and privacy
• Consumers don't understand how the solution works when registering and paying
• 2FA with entering a full phone number not perceived as secure (they switched to last 4 digits later on)
• QR payments didn't disappear so consumers are prone to continue using those

Great article that covers the experience and possible shortcomings here:

It was only a question WHEN these 2 giants will come up their next escalation of the payment wars and indeed in 2024 they both went to separate ways to deliver their blow in this quite war in China. Stay tuned for the next and (currently) final article on the topic 📰

📢 Update: As of April 2025, it seems like Alipay is trying to phase out the Facial Recognition Payment, making way to its next innovation...