Facial recognition technology, once limited to identity verification tasks like unlocking smartphones or clearing airport checkpoints, is now gaining serious traction in South Korea’s financial sector. What began as a novelty is rapidly becoming a mainstream payment method.
Known as “pay-by-face,” the system allows consumers to make transactions without cards or phones, simply by using facial recognition. Financial firms are competing aggressively to lead the next wave of digital payments with this innovative solution.
Shinhan Card was the first mover in this space, launching a pilot at its headquarters cafeteria in 2019. The program later expanded to stores on Hanyang University campus and select Homeplus supermarkets. However, at the time, users had to physically visit a bank to register their faces, which hindered widespread adoption. Public mistrust of facial tech also slowed progress.
Today, the service remains in limited use — mainly at company premises and a few retail outlets.
The market saw a major shift in 2023 when fintech leaders Naver Pay and Toss joined the race. With a user base of young, tech-savvy individuals, these companies made onboarding easier by enabling facial registration directly through their mobile apps.
Naver Pay began implementing its system at university campuses in March last year. The company plans to roll out its proprietary payment terminal in Q4 of this year, a move expected to accelerate adoption significantly.
“This is an AI-powered service offering unparalleled convenience. Once users try it, they won’t want to go back,” said Lee Seung-bae, Chief Technology Officer at Naver Financial. “It also includes strong security with built-in fraud detection.”
Analysts predict that facial payments could expand to public transport, medical institutions, and other service areas in the coming years, signaling a shift to the next era of smart financial interactions.
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