Facial recognition is gaining traction in South Korea’s finance sector, with fintech giant Toss at the forefront of efforts to bolster security amid the rise of mobile finance.
Viva Republica, operator of the mobile finance platform Toss, is rolling out its facial recognition service in partnership with online ticketing platform Interpark Triple and K-pop powerhouse Hybe this month.
Toss' "Face Pass" technology will be used for identity verification at boyband TWS' fan meeting, allowing attendees who have registered their faces through the Toss or Interpark Triple apps to enter the venue via facial recognition, without the need for ID or ticket checks.
This initiative marks the latest step in the local finance sector's broader push into facial recognition-based payments.
Before Toss, Shinhan Card and Naver Pay were early adopters, but scaling the technology has been challenging due to privacy concerns over biometric data and hurdles in technology deployment. Shinhan Card introduced its "Face Pay" service in 2019, piloting it at self-service kiosks in company cafeterias and at Hanyang University’s facilities. While it deployed the system at a Homeplus retail branch in Seoul in 2021, the service failed to expand beyond the initial location. Naver Pay introduced "Face Sign" in 2024, testing it at its office and at Kyung Hee University, but has failed to expand the service beyond initial locations.
A Naver Financial official said that while the technology is ready, poor cost efficiency remains a key barrier to expanding Face Sign.
"Usability is the main issue. Implementing a system like this isn’t as simple as it seems. The software requires significant resources, and dedicated Face Sign terminals are essential, adding costs for both merchants and the company. Cost-effectiveness must be considered before implementation," the official said, adding that the firm is testing ways to enhance usability through beta services.
To bypass these hurdles, Viva Republica has taken an alternative route, first rolling out biometric verification outside the finance sector. In August, it launched the facial verification service to curb concert ticket scalping, followed by a partnership with Interpark Triple and Hybe. In October, it expanded further, teaming up with Incheon Airport to integrate biometric verification at security checkpoints for boarding and departures.
Another key strategy behind Toss’ facial recognition push is tackling the biggest bottleneck -- payment terminal distribution. Its payments subsidiary, Toss Place, has developed Toss Front, a terminal equipped with a camera for facial recognition. By the end of last year, 85,000 locations were using a Toss Place payment device, more than quadrupling from a year earlier.
Industry insiders expect widespread adoption will take time amid key challenges such as infrastructure development and user hesitancy.
In the meantime, payment firms are targeting large communities where new payment methods can gain traction more easily.
"Facial recognition is more likely to be adopted in environments with frequent, repetitive payments, such as universities and corporate offices. Deploying the technology in these settings is more cost-effective than rolling it out to individual stores. For users, it also offers added convenience, eliminating the need for physical payment methods at places they visit regularly," the Naver Financial official said.
Viva Republica, set to pilot facial payments at select shops in the first quarter, is also exploring ways to accelerate adoption.
"We’re looking for ways to speed up distribution. Since upgrading to new terminals can be costly for small businesses, we’re working on enabling facial payments using existing devices by integrating external cameras," a company official said, adding that details on beta testing are still undecided.
More financial firms are expanding their use of the technology with payments as the ultimate goal.
Internet-only lender Kakao Bank plans to introduce a mobile identification service this year that uses facial recognition. The bank already uses the technology for identity verification in banking services, with usage growing rapidly — 222 million verifications recorded as of July 2024, around two years after launch. KB Kookmin Bank has partnered with Incheon Airport for its "Smart Pass" facial recognition service, with Toss and three other major banks set to follow later this year.
Once established, facial payments are anticipated to bolster user convenience and financial security. The local authorities have also advised financial companies to adopt the technology as a means to prevent financial incidents involving identification fabrication or forgery.
While concerns of reduced autonomy over personal data still remain, companies assure validation of tight security before launching services.
"All facial data is encrypted and stored on a separate server, with access restricted to authorized personnel to prevent misuse. While we recognize there's an initial resistance to face registration, people are increasingly embracing it outside the financial sector. Once they experience the convenience and security, we expect adoption for payments will follow sooner than anticipated," a Viva Republica official said.
By Choi Ji-won (jwc@heraldcorp.com)
