Pay with your Face - Customer Decision-making Journey of Trialling Facial Recognition Payment Technologies

Payment technologies (e.g., PayWave, PayPass, mobile wallet) have advanced over the years, and with advancements in biometric technologies, facial recognition payment (FRP) is becoming increasingly popular among retailers and consumers. FRP is a payment method where consumers use a facial recognition application to verify their identity and authorize payment. As a leading country in applying this technology, China alone there were 61 million FRP users in 2018 and it is estimated that it will exceed 760 million in 2022 (Liu et al., 2021). In the USA, an FRP called PopID was launched in 2020, which is now accepted over 100 restaurant and retail brands (Goldberg, 2021) and can also recognise users with their masks on (Baimbridge, 2021). However, the application of FRP is still limited in most other countries, including Australia, where the current study took place. Although Australia leads the world in adopting the use of PayWawe, other payment methods (e.g., mobile wallets) only achieved a low level of trial and adoption (Letts, 2016).
A systematic literature review was undertaken highlighted that researchers in other disciplines have started exploring factors that affect consumers’ intention to use FRP. They mainly employed the technology acceptance model (TAM) (e.g., Zhong et al., 2021) and the unified technology acceptance and use theory (UTAUT) (e.g., Ciftci et al., 202), privacy calculus model (Liu et al., 2021), diffusion of innovation (Rogers, 1962, and social impact theory (Argo et al., 2005). These studies have shown that although FRP can provide significant convenience benefits to consumers (Ciftci et al., 2021), its use has stirred up controversy as users’ resistance to FRP is fuelled by security and privacy risks (Moriuchi, 2021). Furthermore, the above reviewed studies exclusively focus on consumers’ adoption intention, which is only one step of the customer decision-making journey for new technologies (Rogers 2003). In response, this study extends Rogers’ (2003) innovation-decision process model and explores the stages of and the drivers in each stage of the customer decision-making journey before their adoption.
For data analysis, a four-phase grounded theory approach was used (Barratt-Pugh et al., 2019), where Nvivo 12 auto coding was used during the first stage to generate key quotations from 30 interviews. A total of 1789 key quotations were generated, which were then manually categorized into 29 sub-themes during the second phase based on a grounded theory approach.
The results reveal several stages before consumers’ trialling intention of FRP, including acquiring knowledge, generating interest and desire, performing information search and trusting/liking FRP. Each stage is influenced by several consumer (e.g., perceived ease of use), retailer (e.g., customer-store relationship), and customer-store relationship-related factors. Consumers’ knowledge about FRP is influenced by factors such as word-of-mouth from their social circles, their education about technology, and retailer-oriented factors (e.g., marketing communication). Consumer-related factors such as perceived usefulness and security concerns influence consumers' interest and information search. Trust and affect toward FRP result from these two stages and are influenced by customer-store relationship factors (e.g., existing trust toward the retailers). Key implications are reflected in the following three parts.
The interviews revealed that consumers who have a preferred payment method were less willing to trial FRP. This finding highlights that retailers will have difficulties changing the habits of consumers who have positive experiences with their current payment systems. Furthermore, although FRP - in contrast to other payment methods – is accurate and easy to use, which would motivate customers to trial FRPs, the social presence of other customers at the check-out is likely to elevate their anxiety and thus, reduce the efficiency of the check-out process.
Retailer-oriented factors represent retailers’ in-store support and external communication regarding their (facial) data use (e.g., reselling their data) and the capabilities of their technology suppliers. The former underlines the role of in-store frontline assistance to help with problems as well as set-up separate check-out for FRPs and all other payments. Furthermore, retailers need to clearly communicate the ways in which they manage and use the acquired data. In this communication, social media, brand communities, and influencers might be useful to facilitate FRP trials. The latter highlights the importance of communicating the expertise of the technology supplier to customers, as some interviewees highlighted how their stored data (i.e., face) might need to be changed as they get older.
Customer-store relationship represents the customer’s previous interactions with the store, including their shopping frequency (behavioural loyalty) exhibited towards the retailer as well as their trust (ability to meet expectations) towards the retailer. Interviewees underlined that the frequenting a store means that customers already provide a large quantity of information about themselves through their purchases. This information sharing, especially if coupled with a loyalty program membership means that retailers have a good knowledge of their customers, which would also help increase customers’ trust towards sharing a new type of data (i.e., their face) and trialling a new technology. Retailers with a frequent purchaser segment or customers who have a high share of wallet would have the advantage to get their frequent buyers to trial this new technology. In contrast, retailers where frequency of store visit is low or located outside popular retail centres would likely be disadvantaged.
Overall, this study provides new insights regarding consumers’ views on trialling FRP technologies. Our presentation will focus on how marketers can use such knowledge to generate better segmentation, targeting and communication strategies.