Smile to pay: the new Chinese dystopia!

Futuremart, the latest autonomous store opened by Alibaba on 27th April in Hangzhou, where its headquarters are located, is confirming its willingness to impose its facial recognition digital ID on its ecosystem (see Commerce Reloaded 2018). Like Amazon Go (US), Bingobox (China), and particularly Taocafé (Alibaba), customers enter the store, scan a QR code linked to the Alipay mobile payment system, then video and RFID sensors record the items that customers choose and automatically charge them to their cart when they leave the store. It’s a seamless journey!

Last but not least, Alibaba offers facial recognition payment via the “Happy Go” function, offering discounts to those with a convincing ‘Smile to pay’ smile.

For its part, Tencent unveiled its first stand-alone store in Shanghai on 20th January, which works in the same way as Futuremart, except that customers use WeChat Pay instead of Alipay.

As a reminder, the two giant companies account for 90% of mobile payments in China.

As explained in Commerce Reloaded 2018, they are confirming their desire to combine physical retail and online commerce in order to offer an uninterrupted experience based on smartphones and facial recognition.

This popularisation of facial recognition payment is also being driven by Jian 24 in Shanghai.

In 2017, $15.2 billion was invested worldwide in AI start-ups, and nearly half of this sum went to China, compared to 38% to the US (CB Insights).

While China is dominating the world in terms of investment in AI, the government and BATX are the main stakeholders.

On 20th July, 2017, the Chinese government announced the launch of an artificial intelligence development plan that aims to increase national wealth by 26% by 2030.

In the private sector, Alibaba will invest $15 billion in AI between 2018 and 2021.

Facial recognition accounts for most of the investment in AI, with leading national representatives Sensetime and Megvii (see graphic).

The former is working with the government (By 2020, over 700 million face-recognition cameras will be installed, matching a social identity with the faces filmed, identifying age, sex and facial features), while Megvii is mainly specialised in payments, including Alibaba.

Paradoxically, the government is seeking to legislate on the protection of consumer data while building huge databases as part of its social credit project with the connivance of BATX. The government thus assesses its citizens by using the social credit system (Sesame Credit, launched by Alibaba), which is based on behaviour. This score, ranging between 350 and 950 points, varies according to actions online and in real life, just like in the first episode of the third season of Black Mirror, Nosedive.

The fusion between the government and BATX was confirmed when WeChat (Tencent) in Guangzhou allowed 13.5 million people to use their smartphones and face recognition technology to link their national ID cards to their WeChat accounts.

While in the West, following the scandal of the appropriation of personal data of 50 million Facebook users by the company Cambridge Analytica, which impacted the election of Donald Trump and the vote in favour of Brexit, a study by Oxford University has just concluded that Facebook and Twitter have already become tools of social control, but are still far from social scoring.

BATX and the government preempt all the interstices of all moments of the daily lives of consumers and citizens under the cover of AI. China will surely win the race for artificial intelligence by setting up an ultra-connected and controlled life, regulated according to the evolution of social credit scores. Will the new European Data Protection Regulation (GDPR) be a lesson to the world, including the United States and China?

L’Echangeur will be at CES ASIA in Shanghai on 13th-15th June 2018 to report on the latest technological developments and store concepts.