China Roundup: facial recognition lawsuit and cashless payments for foreigners

Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. This week, a lawsuit sparked a debate over the deployment of China’s pervasive facial recognition; meanwhile, in some good news, foreigners in China can finally experience cashless payment just like locals.

China’s first lawsuit against face scans

Many argue that China holds an unfair advantage in artificial intelligence because of its citizens’ willingness to easily give up personal data desired by tech companies. But a handful of people are surely getting more privacy-conscious.

This week, a Chinese law professor filed what looks like the country’s first lawsuit against the use of AI-powered face scans, according to Qianjiang Evening News, a local newspaper in the eastern province of Zhejiang. In dispute is the decision by a privately-owned zoo to impose mandatory facial recognition on admission control for all annual pass holders.

“I’ve always been conservative about gathering facial biometrics data. The collection and use of facial biometrics involve very uncertain security risks,” the professor told the paper, adding that he nonetheless would accept such requirement from the government for the purpose of “public interest.”

Both the government and businesses in China have aggressively embraced facial recognition in wide-ranging scenarios, be it to aid public security checks or speed up payments at supermarket checkouts. The technology will certainly draw more scrutiny from the public as it continues to spread. Already, the zoo case is garnering considerable attention. On Weibo, China’s equivalent of Twitter, posts about the suit have generated some 100 million views and 10,000 comments in less than a week. Many share the professors’ concerns over potential leaks and data abuse.

Scan and pay like a local

The other technology that has become ubiquitous in China is cashless payments. For many years, foreign visitors without a Chinese bank account have not been able to participate in the scan-and-pay craze that’s received extensive coverage in the west. But the fences are now down.

This week, two of the country’s largest payment systems announced almost at the same time that they are making it easier for foreigners to pay through their smartphones. Visitors can now pay at a selection of Chinese merchants after linking their overseas credit cards backed by Visa, MasterCard, American Express, Discover Global Network or JCB to Tencent’s WeChat Pay.

“This is to provide travelers, holding 2.6 billion Mastercard cards around the world, with the ability to make simple and smart payments anytime, anywhere in China,” Mastercard said in a company statement.

Alipay, Alibaba’s affiliate, now also allows foreign visitors to top up RMB onto a prepaid virtual card issued by Bank of Shanghai with their international credit or debit cards. The move is a boon to the large swathes of foreign tourists in China, which numbered 141 million in 2018.

Also worth your attention

Didi’s controversial carpooling service is finally back this week, more than a year after the feature was suspended following two murders of female passengers. But the company, which has become synonymous with ride-hailing, was immediately put in the hot seat again. The relaunched feature noticeably included a curfew on women, who are only able to carpool between 5 a.m. and 8 p.m. The public lambasted the decision as humiliating and discriminating against women, and Didi responded swiftly to extend the limit to both women and men. The murders were a huge backlash for the company, and it’s since tried to allay the concerns. At this point, the ride-hailing giant simply can’t afford another publicity debacle.

The government moves to stamp out monopolistic practices of some of China’s largest e-commerce platforms ahead of Single’s Day, the country’s busiest shopping festival. Merchants have traditionally been forced to be an exclusive supplier for one of these giants, but Beijing wants to put a stop to it and summoned Alibaba, JD.com, Pinduoduo (in Chinese) and other major retail players for talks on anti-competition this week.

Iqiyi, often hailed as the “Netflix of China,” reports widening net loss at $516.0 million in the third quarter ending September 30. The good news is it has added 25 million new subscribers to its video streaming platform. 99.2% of its 105.8 million user base are now paying members.

36Kr, one of China’s most prominent tech news sites, saw its shares tumble 10% in its Nasdaq debut on Friday. The company generates revenue from subscriptions, advertisements and enterprise “value-added” services. The last segment, according to its prospectus, is designed to “help established companies increase media exposure and brand awareness.”