Paying with Your Palm Becoming Normal in China, Rest of the World Struggles to Embrace Novel Fintech

Tencent announced not only cashless and contactless payment but also paying with the palm of your hand a while ago, back in May, but what seemed like a future use case at the time was implemented and is becoming more and more accepted for point-of-sale and retail in general in China.

To fully grasp the trend, you should also know that paying with your phone or smartwatch was already the most common way of paying for your purchase in China even before the leap to biometrics, so it was not that far-fetched. One of the most popular solutions for this is Tencent’s WeChat Pay service, also known as Weixin Pay.

Why would anybody want to pay with their palm?

From an innovation angle, you should ask, “Why not offer users to pay with a palm scan?”. It’s just another comfortable option to let people choose their most convenient way of paying, and like this, they are not even required to have a smartphone with them, running apps and the like. You can use your body to pay by leveraging biometric payment services, which must only be registered to your account once.

While this might not seem like a massive difference to you, there are still people out there who don’t want to use their phone to this extent, or you can include seniors in comfortable ways of paying and therefore have the elderly benefit from this kind of fintech payment innovation just as much even if they don’t have a smartphone or never bothered to get to know how it works in detail. This seems like a nice new feature to include in the mix of options for choosing how you want to pay.

How does paying with your palm work?

The payment terminals can scan surface-level details in the palm of your hand. You will not need to press your hand on a sensor for this to work, so it’s not like the kind of biometrics used in digital passports or IDs, for instance. The patterns on your palm surface and veins are unique and cannot easily be replicated.

The scan process takes about two seconds, in which the terminal completes the initial scan and a validation. After an initial registration, you will not be required to have your mobile with you to complete payments anymore, which can also be handy if you run out of battery on a busy day.

Competition catching up

Alibaba Group’s solutions, Alipay and Amazon One are also trying to leverage palm-based biometric payment systems. The concepts are years old, and the patents are sometimes even older than that. Some solutions, such as Google Hands Free Payments, have changed entirely to something else. It’s unclear who’ll win this race, but the question remains: “What’s next?”. What comes after palm-based payments?

There have been experiments with facial recognition in which customers walk into stores, grab what they want, and leave, and the fees are automatically deducted from their balance and accounts, but why are those not taking off? Oftentimes, innovation is enabled by technology but hindered by culture and poor adoption.

Who wants that?

It’s not unusual for user groups to be doubtful and hesitate to try new things. They have fear and trust issues to manage, and there’s only a small group of pioneers to try things first before something becomes the new normal. Just remember the “rise” of the smartphones. Things like that come slowly, and that’s also fine. It suits the lawmakers and regulators well, so they don’t need to rush decisions, while new tech is still considered a proof of concept for both companies and the people.

How about the rest of the world?

As we mentioned above, paying with your smartphone is already the most common thing in China, and you’re likely not to get very far if you try to get around or buy things with cash. You’d create a huge commotion and upset people behind you in a queue. Meanwhile, I rarely see people in Germany using smartphones or other NFC-enabled devices to make payments.

Many people are still clinging to actual cash payments, but I don’t want to explore why they feel this is their preferred way of paying in this article; let’s accept the facts for what they are right now. This is, however, largely a cultural matter, and if we look at other countries, we can find many people making their payments without cash but with a credit or deposit card instead. In Asia, we noted the strongest adoption of digital payment options, but we have yet to see how the world beyond China will react to palm-based payments or similar biometric fintech.

As far as digital innovation for everyday purchasing goes, the people in China certainly are the top users of cutting-edge technology, but there are concerns about scams and privacy worldwide. What matters most is that companies provide options for how a payment can be made. The more customers’ preferences they can meet, the more people they’ll make happy, and happy customers are returning customers.

Photo credit: The feature image is symbolic and has been done by Christopher Isak with Midjourney for TechAcute. The infographics and statistics in the body of the article have been done by YouGov and Statista and credited accurately beneath each graphic, along with a source link.
Source: Report by South China Morning Post, Yahoo
Story pitched by news scout Pupu Liang.
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