In September last year, China’s digital payment platform Alipay (owned by Alibaba) launched the world’s first facial recognition payment system. The new technology allows customers to pay by literally flashing a smile.
After a year, Alibaba-backed Paytm is planning to launch a similar technology in India which will be the first in the country.
The Noida-based payment company is testing the face recognition technology that can unlock its payments application on a customer’s smartphone. It plans to further develop the technology for direct payment via the app, which means that customers can pay at merchant outlets with the blink of an eye.
Paytm believes the technology will create an extra level of security and save the users from phishing attacks that trick customers into revealing their passwords or mobile pin numbers to fraudsters. Besides, the platform is adding more security checks to save the platform from any kind of fraudulent activities.
The platform is planning to introduce the technology for wallet payments, which do not require the second-factor authentication.
As per the Reserve Bank’s security guidelines on digital payments, two steps of verification are required. The face could be the first factor of authentication. Besides, for transactions up to Rs 2,000, RBI allows single-factor authentication.
The company will install new kind of authentication devices for facial recognition payments at the select merchant location. Currently, it has 9.5 million offline merchants on its platform.
It appears Alibaba is planning to create a replica business in India via Paytm.
In the past, following the strategy of offline retail of Alibaba, Paytm Mall also decided to launch a physical store in India.
It launched a brick-and-mortar store co-branded with Red Tape shoes in Delhi, where customers can walk in, scan product barcodes, browse and make purchases via its mobile app.
The development was first reported by Economic Times.