Domestic fintech firms are expanding beyond the wallet-free era into face payment called "FacePay." Toss has launched its official service and is accelerating terminal deployment. Naver Pay plans to release a terminal within the year and has set the stage for a fierce battle with Toss in the offline face-to-face payment market.
According to the financial sector on the 9th, Naver Pay has completed development of the multi-payment terminal "Connect," equipped with facial recognition payment, and is preparing for field tests. A field test prepares to ensure a new system works properly without errors at real merchants, and Toss also underwent a field test before releasing its own terminal in February this year.
Naver Pay Connect's exterior is similar to yet different from Toss's terminal Toss Front. While Toss Front has the card insertion slot at the bottom of the screen, Connect enlarges the screen vertically and places the slot on the right. Also, unlike Toss Front, which mainly has a white exterior, Connect is overall black, and whereas Toss has three forms—Front, FrontView and FrontCam—Connect focuses on a single terminal.
Connect's strength is collaboration with the Naver ecosystem rather than facial recognition payment. True to its name as a device that connects, it links the entire process from reservations to ratings and reviews through integration with Naver and Naver Maps, which many consumers use. In particular, the advantage is that Naver Pay points accumulated with each payment can be used like cash.
Connect also supports FaceSign, the facial recognition payment method newly introduced by Naver Pay. It supports card, simple payments and near field communication (NFC) payments as well. Naver Pay said FaceSign is secondary and that Connect's distinguishing feature is using map integration and the point ecosystem in the offline market to provide benefits to consumers and merchants. Naver Pay has been showcasing the first facial payment beta service for simple payments using its in-house facial recognition technology at Kyunghee University Seoul campus since March last year.
Toss is seizing the market with overwhelming terminal distribution power. While it supports other payment methods like card and simple payments, Toss is actively promoting FacePay and aiming for ultimate convenience.
The reason both companies are focusing on the offline market with terminals at the forefront is the overwhelming market size. According to the Bank of Korea, the average daily face-to-face payment amount last year was 1.755 trillion won, higher than the non-face-to-face payment amount (1.21 trillion won). Also, through the terminal business they can secure various establishment-related data and expand their business using that data.
According to consumer data platform Open Survey, Naver Pay, which received the highest preference in simple payment preference, had a particularly high proportion of users in their 30s and 40s with high spending power. Compared with Toss, whose user rate is relatively high among people in their 20s and 50s, the per-transaction payment amount may be higher. Also, as Naver Pay begins serious terminal sales, it is hard to ignore the capital or advertising effects from its parent company Naver.
However, how quickly Naver Pay can supply terminals in the FacePay terminal market already dominated by Toss is expected to be the key to seizing the facial payment market. Toss began supplying terminals two years and six months ago and has installed more than 200,000 terminals nationwide. Notably, the regular price per unit reaches 200,000 won, but it was effectively supplied for free.