Just smile: In KFC China store, diners have new way to pay

SHANGHAI (Reuters) - Diners at a KFC store in the eastern Chinese city of Hangzhou will have a new way to pay for their meal. Just smile.

Customers will be able to use a “Smile to Pay” facial recognition system at the tech-heavy, health-focused concept store, part of a drive by Yum China Holdings Inc to lure a younger generation of consumers.

Yum China, which spun off from its U.S. parent Yum Brands Inc last year, is trying to rev up growth in the world’s second largest economy, where food safety scares and changing consumer tastes have dented sales since 2012.

Yum is still the largest fast food chain in the market, where it has over 7,685 outlets. Its China same-store sales have also been slowly improving, rising in the second quarter of the year on a strong showing by its KFC brand.

The new outlet in Hangzhou, called KPRO, is targeting a younger generation of Chinese who are expected to drive the lion’s share of China’s consumption growth over the next decade.

Joey Wat, Yum China’s president, said the store was aimed at “young, tech savvy consumers who are keen to embrace new tastes and innovations”.

The Hangzhou store involves a tie-up with Ant Financial, which is behind the facial recognition software. Alibaba Group Holding Ltd affiliate Ant said this is the first commercial application of the technology worldwide.

Diners can pay by scanning their faces at an ordering kiosk and entering a phone number - which is meant to guard against people cheating the system.

“Combined with a 3D camera and liveness detection algorithm, Smile to Pay can effectively block spoofing attempts using other people’s photos or video recordings and ensure account safety,” Jidong Chen, Ant’s director of biometric identification technology, said in a statement.

The store’s menu offers seasonal produce, made-to-order salads and paninis. The chicken on the menu is “roasted”, while drinks include freshly squeezed juices, gourmet coffees and craft beer.

The concept store is not the first time Yum, or its major rival McDonald’s Corp, have tested new ideas in the market. Yum launched a swanky Italian diner as a test “lab” on Shanghai’s iconic riverside Bund in 2015.