Alibaba Group Holding Ltd (BABA) Face Payment’s Problem Will Be Traction: James Wester

Alibaba Group Holding Ltd (NYSE:BABA) may be looking to the future – more specifically, enabling payments with users’ faces – but the technology won’t easily catch on if this analyst is to be believed.

In a report by Josh Lipton for CNBC, James Wester, IDC Global Payments Research Director, warns that Alibaba Group Holding Ltd (NYSE:BABA) faces a tough challenge in acclimatizing people to paying with their facial features.

“It has taken some time to get [people] comfortable with the idea of having their fingerprints scanned so I’m not certain that consumers are going to want to have their eyeballs scanned by the phones just yet,” Wester is quoted in the report telling CNBC.

Alibaba Group Holding Ltd (NYSE:BABA)’s founder and CEO, billionaire James Ma, recently demonstrated a digital payment system that makes user of unique biometric features of people’s faces for verification and identification.

Though Ma demonstrated the technology at the CeBIT conference, however, he did not take questions afterwards or detailed just how Alibaba Group Holding Ltd (NYSE:BABA) would be implementing the technology. It was revealed then, nonetheless, that the Chinese electronic commerce giant was working on the technology with affiliate company Ant Financial, a firm which it hopes to help go public in 2017.

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Meanwhile, Josh Lipton said during his report that many in the technology sector believe that biometric identification for mobile payments and security holds big promise going forward.

“Remember the mobile payments market will triple to $142 billion by 2019, according to analysts at Forester [Research]. Of course, when you make payments with your phone, you are relying often on your password [and] your username and there are questions about [the] convenience and security of that, and that is why you see tech companies moving into biometrics,” Lipton said.

The CNBC reporter notes that Apple Inc. (NASDAQ:AAPL) is one of the biggest players in this field with its Apple Pay electronic payment platform. The consumer electronics giant also has Touch ID with its devices with a fingerprint scanner.

Rob Citrone’s Discovery Capital Management owned about 9.25 million Alibaba Group Holding Ltd (NYSE:BABA) shares by the end of 2014.

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