Improving Convenience or Saving Face? An Empirical Analysis of the Use of Facial Recognition Payment Technology in Retail

Although facial recognition (FR) payment technology can be more convenient for customers, it is still not consistently used by many customers in retail. Using transaction data from three retail chains, we develop econometric models and an estimation strategy for examining the social presence and herding effects that affect FR payment technology use. Our key findings are as follows: (1) Customers are less likely to use FR payment technology when more customers are in line behind them, waiting and potentially watching—the social presence effect. (2) Customers are more likely to use FR payment technology when more preceding customers use FR payment technology—the herding effect. (3) Customers with more experience using FR payment technology are subject to a weaker social presence effect. The marginal social presence effect can result in a 4.75% reduction in the probability of the focal customer using FR payment technology, and the potential social presence effect can be as high as 48.42%. When the focal customer has one additional experience in using FR payment technology, the social presence effect is reduced by 7.79%. The herding effect can result in a 20.90% increase in the probability of the focal customer using FR payment technology. Theoretical and managerial implications are discussed.