China’s top tech adviser for the financial sector sees “bright prospects” for facial recognition payment systems despite lingering concerns over privacy and data security.

The artificial recognition-powered payment method is expected to be widely used across the country because it offers convenience and efficiency, according to Chen Jing, a member of the State Council’s Advisory Committee for State Information and former chief of the central bank’s technology division.

Still, regulations need to be in line with the technology, which means limiting use to qualified service providers and capping the amount of payment allowed, Chen told The Beijing News in a report on Thursday.

“Development is of overriding importance because falling behind is the biggest cause for concern,” Chen was quoted as saying. “Through dedicated exploration and efforts, face-scan payment will win recognition from society.”

A customer uses a facial recognition payment system at a KFC fast food restaurant in Hangzhou, Zhejiang province. (Picture: AFP)

His remarks come as facial recognition, the most widely used AI application, is quickly becoming ubiquitous in China, which has targeted global leadership in AI by 2030. The country is home to more than half of the world’s AI start-ups valued at US$1 billion or above, according to CB Insights, a research firm that tracks venture capital activity.

While face-scanning is used widely in China for applications such as unlocking phones, preventing toilet paper theft, and creating personal avatars, its use in the financial sector requires the highest quality and security standards.

China’s UnionPay is working with more than 20 banks to jointly launch face-scan payment systems, which are seen as a good match for financial services, according to Chen.

“With continuous refinement and enhanced security protection, it’s a very promising application, promoting greater efficiency and a more convenient life,” he said.

This year is also expected to see the first widespread adoption of facial recognition payments, with an estimated 118 million Chinese users embracing it compared to 61 million in 2018, according to a report issued earlier this month by iiMedia Research.

By 2022, the research consultancy expects the number of users to exceed 760 million, about half of the country’s population.

Still, concerns have been expressed over data security and consumer privacy.

Earlier this month, a law professor in east China sued a wildlife park for breach of contract and infringing on consumer rights after it replaced its fingerprint-based entry system with one that uses facial recognition.

Elsewhere in the world, the rapid development of facial recognition technology has led to lawmakers mulling changes to data privacy laws. In May, San Francisco became the first US city to ban facial recognition use by the police and other government agencies.

Earlier this month, the National Standardization Group for Facial Recognition Technology was formed in China, with Chinese AI giant SenseTime elected to lead the group, according to a statement by the Beijing-based company.

The organization, which includes representatives from tech companies including Alibaba’s Ant Financial, Tencent, Xiaomi, PingAn and iFlyTek, aims to develop industry standards and ensure rapid but healthy development of the technology.