TLDRs:
Contents
- Korean fintechs accelerate facial recognition payment rollout, with Toss and Naver Pay leading adoption.
- Shinhan Card and Lotte Card expand facial recognition efforts despite regulatory and security challenges.
- Toss terminals now support facial payments in over 20,000 Seoul stores, fueling rapid market growth.
- Experts predict a winner-takes-all future as data sharing limitations hinder system compatibility.
South Korea’s fintech sector is undergoing a digital facelift as facial recognition payments surge across retail spaces.
Major players including Toss, Naver Pay, Shinhan Card, and Lotte Card are aggressively investing in “pay-by-face” technology, aiming to redefine in-person transactions.
No longer confined to smartphones or airport security checks, facial recognition tech is now gaining traction in convenience stores, gas stations, and even university cafeterias. The allure? Speed, convenience, and the novelty of going card- and phone-free.
Naver Pay began deploying its facial payment system on college campuses in 2024 and plans to roll out its own terminal hardware later this year. Its user-friendly onboarding, done entirely through the app, is tailored for Korea’s tech-native youth ,the demographic most eager to try biometric payments.
Shinhan, Lotte Boost Face-Pay
Shinhan Card was an early pioneer in this space, launching its pilot in 2019. Despite limited uptake due to in-person registration requirements and public skepticism, Shinhan’s infrastructure laid the groundwork for more scalable models now used by competitors.
Lotte Card is the latest to gain regulatory approval. Its upcoming partnership with Korea Airports Corp. will enable passengers to make purchases using facial data, further integrating biometrics into Korea’s financial ecosystem.
Still, the path forward isn’t without regulatory hurdles. Korean law prohibits the sharing of biometric data across institutions, meaning each provider must independently manage user onboarding and verification. This lack of interoperability could slow broader adoption.
160,000 Merchants and Counting
Toss has emerged as the frontrunner by solving a key logistical bottleneck: hardware. Unlike its peers, Toss distributed proprietary terminals with built-in facial recognition support, offering subsidies to encourage merchant adoption.
By mid-2025, over 160,000 retailers nationwide had installed Toss terminals, with 20,000 of them, including GS25 convenience stores and major fuel stations, enabling face-pay functionality. Toss’s seamless integration and financial incentives have turned it into a market disruptor.
“The convenience is undeniable. Once customers experience it, they rarely go back,” a Toss spokesperson noted.
Privacy, Risk, and the Road Ahead
Despite growing excitement, concerns about data privacy and security loom large. Facial data, once compromised, is nearly impossible to restore, making it a prime target for fraud.
Regulators and institutions alike are treading cautiously. The SNU AI Policy Initiative warns that under current financial law, companies deploying facial recognition could be held liable for misuse or breaches.
This regulatory pressure is pushing firms to invest in advanced AI-driven fraud detection systems to ensure accuracy and safeguard consumer trust. Experts predict a “winner-takes-all” scenario, as merchants are unlikely to install multiple terminals, giving a decisive edge to whoever scales first.
