SnapPay pushes 'facial payments' for its North American expansion

The facial recognition development trail is dotted with starts and stops in its search for consumer adoption, from Mastercard's "selfie pay" to Apple's 3-D facial scan tests and the Federal Trade Commission's approval of biometric authorization.

After establishing itself as a global payment technology provider through its work with mobile wallets in China, SnapPay is hoping its use of facial recognition technology will be the impetus for expansion into North America.

SnapPay has spent the past two years building B2B e-commerce and pushing merchant acceptance of the Alipay and WeChat Pay wallets into Canada.

In revealing this week that it will add facial recognition authorization to its payment platform for grocery and quick-serve restaurant merchants in North America, the Toronto-based company is banking on the checkout process becoming even more seamless when consumers can make a digital payment through a snapshot of their face.

Trying to get grocery store operators familiar with its payment platform is not new to SnapPay. The company earlier this year teamed with Alipay to bring the Alipay app to Canada's FoodyMart grocery chain, a move that strengthened the companies' partnership in enabling Chinese tourists to make purchases at Canadian merchant locations.

Adding the facial recognition option sets the stage for not only Chinese mobile wallet users, but all consumers in North America to take advantage of a more secure authorization tool while also helping merchants with faster checkout, said Chris Renton, chief growth officer at SnapPay.

"We want to make it easier for our retail customers to have their consumers walk into a store without cash or a card and still pay for goods and services," Renton said. "It's really a Utopian state, from a payments perspective."

The facial scanning would come into play as an additional verification method for the merchant to use, as part of the merchant's own mobile app that would include the consumer's payment information and loyalty program status. The facial recognition essentially authenticates the user payment account with the merchant, completing the transaction — even if the consumer has no cash, card or even a phone with them at the time.

"It would be similar to opening the new generation of iPhones through facial recognition, but this gets it into the retail environment to authenticate transactions," Renton said. The merchant would have the consumer biometric information stored on the app with other customer information, making it easy to do a facial scan on the consumer.

SnapPay feels it is adding facial recognition at a good time in payments technology evolution in hoping it can provide a technology that sticks with merchants. With Chinese wallet users at the core of what SnapPay has done since being founded in 2017, Renton is hoping other consumers catch on to higher security standards.

Chinese consumers using Alipay have engaged with "Smile to Pay" facial biometrics for more than a year, even going through upgrades designed to thwart any fraud attempts on biometric files or scanners.

But such a transition won't come without the usual roadblocks of finding ways to motivate merchants and consumers to use the technology, and how the enrollment process would keep minds at ease, said Julie Conroy, research director and fraud expert with Boston-based Aite Group.

"I think facial recognition as one form of authentication makes good sense," Conroy said. "But I am a bit skeptical about the potential of it in a card-present, high-throughput environment."

In addition to assuring that facial scanning at the POS is fast enough, the merchant will also have the task of asking consumers to change their behavior when making a payment, Conroy added.

The use of facial recognition is "expanding extremely fast" but it has been limited in North America, SnapPay's Renton said. "The best example is probably that the Amazon Go stores have facial recognition as one component in their technology stack."

It is important for the retailer to be fully on board with the technology for it to work. That is why SnapPay is targeting specific grocery chains and quick-serve outlets to start with.

"The retailer needs to be part of the development required to enable this technology," Renton said. "When the consumer walks in the store and uses face-to-pay, the merchant is comparing that data element with the database of similar elements they have in place to identify which consumer it is."

The facial recognition portion of the SnapPay platform should not be mistaken as a separate application, said Sean Trudeau, head of customer success at SnapPay.

"Facial recognition is an enhancement to our core payments solution product," Trudeau said. "We are focusing on consumer goods and quick-serve restaurants because facial recognition is something that can expedite customers getting through checkout quickly."

SnapPay also hopes to diversify its retailer base, including those at convenience stores and gas stations in the U.S. that are facing EMV chip card deadlines in the coming year.