Low-cost UnionPay Mobile POS
China UnionPay and mobile phone manufacturers Huawei, Xiaomi, Samsung, OPPO etc. have launched mobile POS applications. Merchants will only need to download required POS APP or use mobile wallet APP to complete online registration. After checking and approval, the merchant can deal with UnionPay IC cards, UnionPay Quick Pass and QR code payment through registered phones.
The biggest benefit is a lower cost for small merchants. Using a mobile phone as a POS machine is cheap and easy for merchants. It saves banks or merchants the cost of purchasing and maintaining POS machines. The UnionPay mobile POS will provide open APIs to acquirers to integrate different banks’ mobile apps. For example, Huawei mobile generates eID for users to support POS service. Putting any phone supporting NFC payment to the merchant’s mobile POS, the payment can be made in seconds.
Currently a POS costs from a few hundred to thousands of RMB. To secure user’s asset, UnionPay developed a new risk management system to monitor mobile POS in real time. The system combines merchant ranking and fraud detection models based on UnionPay’s data and experience.
Efficient facial recognition: Alipay Dragonfly
Alipay launched ‘Smile to Pay’ service in a KFC shop in Hangzhou in 2016, opening a chapter of merchant facial recognition payment. On 13th December, Alipay announced that they now provide a mature and lower-cost facial recognition payment product – Dragonfly.
This terminal includes a 3D structured camera with bigger pitch angle to improve recognition accuracy. The biggest benefit is an improvement in merchants’ payment process efficiency. Applied in supermarkets and hospitals, the Dragonfly system can process both QR code and facial recognition payments. It is said that the new product can save 80% of the cost of traditional self-service checkout POS machines, and 50% of payment processing time. The product can be easily connected to merchants’ existing systems and does not require the set up of another system. For the first few times, customers need to type in their mobile phone number. With the deep learning ability, the system can detect frequent consumers and process facial recognition payment without mobile verification.
Now the product is being used in self-service checkout counters in Lotus Supermarket and Jiangxi Provincial People’s Hospital. Alipay plans to use Dragonfly in both large and small merchants to hopefully become as common as QR code payments.
Cost or efficiency?
As China's smartphone penetration rate keeps growing and Android system phones are taking over the market, equipment for mobile POS does not seem to be a problem. The main painpoint is product promotion. UnionPay will need to educate potential clients in rural areas to operate the POS APP. For small merchants, the efficiency is not so critical compared with cost.
The Dragonfly product does not seem to be the necessary solution to shops with low passenger volumes now. It is suitable for high frequent payment situations such as busy shops or hospitals. In top tier cities new retail becomes the new trend, generating more use cases for facial recognition payment.
As technology develops, cash, cards, mobile phones may all gradually be replaced by some cheap and efficient methods. In future people may not even not need any tool as they can pay with bio-chip or pupil identification. This brings challenges in AML and Anti-fraud technology, but also means opportunities.