Save Time or Save Face? The Stage Fright Effect in the Adoption of Facial Recognition Payment Technology

Abstract

Although facial recognition (FR) payment technology can be more convenient for customers and reduce their costs, it is still not used by many customers — most likely due to the stage fright effect that originates from social presence in public. Using transaction data collected from three retail chains, we develop econometric models and an estimation strategy for estimating this stage fright effect and several of its moderating factors. We find that customers are less likely to use FR payment technology when more customers are in line behind them, waiting and watching; that is, when they are experiencing the stage fright effect. We estimate that the marginal stage fright effect, with every additional customer who is waiting and watching in the line behind the paying customer, can result in a 3.72% reduction in the probability of the focal customer using FR payment technology and that the potential stage fright effect may be as high as 37.58%. We also show that there are two factors that moderate the stage fright effect:

1) when a customer has more experience with FR payment technology, the stage fright effect is reduced;

2) when the immediately preceding customer uses FR payment technology, the stage fright of the focal customer is increased.

Keywords: Facial Recognition, Technology Adoption, Retail, Empirical Analysis