The robot will help you now

The robot will help you now
The biometric facial recognition-based payments system developed by startup PayByFace.
By Clare Nuttall in Glasgow August 29, 2020

It’s high summer in the Romanian resort of Mamaia, where holidaymakers can take a dip in the Black Sea then stroll straight over to the Playa Baque cafe bar, order a drink and pay for it – with their face. Playa Baque is one of seven outlets so far, also including the Tucano Coffee and Creamier Coffee cafes in Bucharest and several pharmacies, that have adopted the biometric facial recognition-based payments system developed by startup PayByFace. 

The company’s app is installed on an iPad that scans the customer’s face to identify them by matching it up to their selfie, after which the payment is processed using the customer’s pre-entered details and a digital receipt is emailed to them. 

This is handy for people who don’t take their phone or cash to the beach or their local coffee shop, but it’s become even more relevant with the coronavirus (COVID-19) pandemic as people are actively looking for ways to avoid physical contact. 

The change in attitude over the last few months has been dramatic, says Mihai Draghici, founder and CEO of PayByFace, in an interview with bne IntelliNews over Zoom. He believes the shift to facial recognition and other advanced contactless transactions was going to happen eventually but “COVID clearly accelerated it”, taking the technology from a fairy tale to something that solved a pressing and immediate problem. “COVID made us think about everything we touch all day long. Then people try [PayByFace] and realise it’s not just safer but also very convenient. Once you try it you really don’t have a reason to go back.” 

A MasterCard survey published at the end of May confirms this, revealing that 78% of all Mastercard transactions across Europe have become contactless, and mobile contactless transactions doubled in Europe in Q1. The company’s analysts say contactless payments are the new normal in Europe. 

Respondents to the survey said they would permanently switch to contactless payments because of ease of use (85%) and cleanliness (81%). And while the pandemic pushed many to make the change, “73% of Europeans claimed that the pandemic ending won’t change their contactless usage”, MasterCard said. 

A comment from commercial real estate services company JLL says that as stores and shopping malls re-open, owners and retailers "have a monumental task: making people feel safe in the age of coronavirus”. To achieve this they are turning to new technologies. “The innovation curve in the retail sector has accelerated by five years because of coronavirus …So have customer expectations of a touch-free experience,” says Edward Wagoner, executive director, digital chief innovation officer at JLL. 

Draghici tells bne IntelliNews that following the early adoptions of PayByFace by companies like Tucano Coffee, Playa Baque and most recently meal and gift card company Up Romania, there has been a lot of interest, including from large franchise networks. “It looks like it’s going to go to mass adoption,” he says, pointing out that hundreds of millions of people already make facial recognition payments in China. 

The technology to enable facial recognition payments is highly complex, and PayByFace is one of just a handful of European companies in this area. Another challenge is wariness about the technology, not least because of concerns about privacy and surveillance. Draghici stresses that PayByFace, which has offices in Bucharest and Amsterdam, is an entirely European company, designed from the ground up in line with the EU General Data Protection Regulation (GDPR), and with user privacy and controls in place.

As well as addressing such concerns, PayByFace aims to encourage adoption by giving customers “an experience that’s really cool”, for example by gamifying shopping, says Draghici. 

As many of Romania’s cafes and restaurants are currently struggling as a result of the lockdown and government restrictions on opening indoor areas, Draghici says the company doesn’t take money from shops or cafes that use its app. It makes money when it brings people to a store or cafe through offers made via the app, and by selling third-party advertising on its iPads. 

Draghici has big ambitions to grow PayByFace into Romania’s second tech unicorn after robotic process automation (RPA) company Uipath, currently valued at over $10bn. After Romania, PayByFace plans to roll out in Amsterdam, where it took part in Startupbootcamp’s Commerce Accelerator this spring. Draghici also reports interest from Bulgaria, Switzerland, the UK, South Africa, the Middle East and the US: “we have people asking about it all over the place”. 

And the world may not be the limit. Musing on Elon Musk’s space project and the potential for commercial space travel in future, Draghici says: “I’m not taking my debit card or a dollar bill to space. I’m going to be paying by face – in space.”

Contactless delivery 

Another aspect of the new contactless retail experience is minimising contact when delivering goods to customers. E-commerce companies, which saw a boom in demand during the lockdown, have been looking at new ways of handing over their goods, as have bricks and mortar retailers. 

Cleveron is an Estonian technology company creating hardware and software for click and collect automation systems. It was one of the pioneers of parcel lockers, creating its first version back in 2007, when e-commerce was just beginning to gain popularity, Cleveron’s COO, Mihkel Ilp, tells bne IntelliNews. Today, its parcel lockers and robots are used in Europe, the Middle East, North and South America and New Zealand.

“Estonia is the world leader when it comes to the customer’s preferences for using parcel lockers as their parcel pickup points. Cleveron was the first to build a nationwide locker network more than 10 years ago, which helped to cultivate this preference. In Central and Eastern Europe, our lockers can also be found in Hungary (Foxpost, Decathlon), Romania and Bulgaria (Speedy), Czech Republic (Zasilkovna). We consider Europe a growing market where companies want to trial different things and figure out what works for them,” says Ilp. 

The company has now developed Cleveron 501, a robotic grocery delivery system. Among the first to install Cleveron 501s were Estonian grocery chains Coop Estonia, Prisma and Selver, which set up the stand-alone units in car parks in Tallinn. Users make their order online then enter their PIN on the machine. The robot inside the unit picks their goods and hands them over. 

This year, the company is seeing a spike in interest driven by the surge in online orders during and after lockdown. “COVID-19 has been tough for many industries and companies, including us,” says Ilp. “Many of our retail clients had to temporarily close their businesses and hence were not able to use our technology. This caused a lot of stress. On the other hand, some of our clients saw amazing growth and are therefore trying to figure out what mix of services will futureproof their offer.”

Looking at future demand, Ilp says there will always be people who prefer home delivery or visiting shops in person. “But I also truly believe that there is a huge potential for grocery and general merchandise pickup points that are conveniently located between the store and their homes. Such a network helps retailers to be really smart about logistics, reduce handover costs, traffic and pollution and also offer value and convenience for the end-user,” he says. “So, the combination of end-user demand and pioneering retailers will soon have the solutions figured out and then we will see a lot of solution scaling. Cleveron will keep on working on new solutions – either improved locker solutions, robotic parcel terminals or autonomous delivery systems.” 

Then there are the robots developed by Estonian/US company Starship Technologies that transport grocery deliveries to customers’ homes. Launched by Skype co-founders Janus Friis and Ahti Heinla and headquartered in San Fransisco with engineering operations in Tallinn, Starship has developed self-driving robotic delivery vehicles. 

The electrically powered robots travel along pavements with a maximum speed of 7 kph and are used for short-range deliveries. They have been trialled by two British supermarket chains, the Co-op and Tesco, in Milton Keynes. Other applications include a fleet of Starship robots that carry out food deliveries at several US universities. 

The Co-op said in June it was expanding its robot delivery service across Milton Keynes and surrounding towns and villages. The retailer said it had seen “increased consumer demand for robo-shopping” since the start of the pandemic.

“Co-op has seen the number of customers using robot deliveries more than double since the start of lockdown, with the value of transactions increasing four-fold as shopping habits change,” said a press release from the retailer, describing the robots as a “lifeline” for vulnerable or housebound people. The Co-op also programmed the robots to stop at 8pm on Thursday evenings during the height of the first wave to “clap and cheer” for frontline workers. 

Beyond the checkout 

Going beyond contactless delivery and payments, stores are now being trialled with no checkouts at all. 

Startup Pixevia opened the first artificial intelligence store in Europe in Vilnius last year. The company sells software that allows shops to fully automate using artificial intelligence and information from video cameras that analyse the movements of the buyer. Artificial intelligence processes the received information and automatically forms a shopping cart. As the customer exits the shop, the payment is calculated automatically and deducted from the customer’s pre-entered payment card.

Pixevia recently raised a €1mn venture capital road led by Iron Wolf Capital. The funding will allow the company to improve technology and start active development in Europe. It aims to work with convenience stores, filling stations and retail chains that have a smaller format of 40-200 square metres.

In Russia, one of grocery chain Azbuka Vkusa’s stores in Moscow has launched a checkout-free store within a store equipped with a computer vision system in co-operation with Sberbank and Visa, and using technology from San Fransisco-based Zippin. Like PayByFace’s Draghici, at the time of the launch Georgy Mikhailov, deputy president of Azbuka Vkusa, commented on the sudden shift of technologies from fantasy to reality. “Now we are all watching how, with the help of high technologies, global retail embodies into reality what once seemed fantastic and unrealisable,” he said. 

As people continue to try to return to normal activities they enjoyed pre-pandemic, shops, cafes and other venues will be forced to continue to innovate to allow them to do so safely. This will be the trigger to bring yet more technologies that were once seen as fantasies into the mainstream.