What happened: Even in the country with the most advanced digital payments landscape in the world, some features and technologies are still too modern for China’s consumers. Alternatively, Chinese shoppers are even becoming increasingly concerned about their privacy. The Wall Street Journal reports that Chinese shoppers are “reluctant to use” new facial payment technologies. Since Ant Group was confident the new technology would be a smashing success, it invested heavily in facial recognition device stations at different offline points of sale. According to the Wall Street Journal, this estimation might have cost the group $439 million.

Jing Take: There are various dangers associated with facial recognition payment technologies that go beyond simple privacy and security issues, so it is understandable that shoppers don’t want to risk their financial resources and facial recognition data. Furthermore, there are also serious concerns about the accuracy of face identification algorithms and how this data is stored.

No consumer wants to find out that his bank account was hacked and cleaned out by someone who looks similar to them just because the “Smile-to-Pay” system made a misidentification. Lastly, the facial recognition software is similar to surveillance technology, which allows companies like Ant Group to track shoppers’ movements and monitor all aspects of their shopping experience.

According to a 2019 survey by the Nandu Personal Information Protection Research Center, 80 percent of respondents were worried about data breaches and having their personal data exposed, while 57 percent said they feared being tracked.

Facial recognition technology seems perfect for the zero-touch retail reality of 2020 because it creates a more convenient, efficient, and comfortable shopping experience for the post-COVID-19 era. However, as long as three are data and security issues, even tech-savvy shoppers in China will shy away from it.

But if facial payment technology is not a rousing success in the country where smart consumers pursue innovative technologies and tailored-made content, how will it work in countries where the trust in big companies is wavering, and governments push back against big tech?

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.