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Ant Financial wants to introduce hands-free shopping...in VR

Alibaba's finance arm is working on a technology that could potentially allow users to shop inside virtual stores without having to take off their virtual reality (VR) goggles to settle payments.

On Wednesday, Ant Financial, the company behind Alipay, demonstrated VR Pay at the Shenzhen Innovation Week, and said the technology currently works with VR headsets that are powered by smartphones.

Zhuang Zhuoran, Senior Director for Alibaba Wireless Division, shows Alibaba's VR shopping technology Buy+ during the press conference on June 30, 2016 in Hangzhou, Zhejiang Province of China.
VCG | Getty Images
Zhuang Zhuoran, Senior Director for Alibaba Wireless Division, shows Alibaba's VR shopping technology Buy+ during the press conference on June 30, 2016 in Hangzhou, Zhejiang Province of China.

"VR Pay is developed based on Alipay's security technologies and backend capacities," Lin Feng, senior technology expert in charge of F Lab, one of Ant Financial's incubators, told CNBC on Thursday by email. "When users need to complete payments within different VR use cases, [they] can use their Alipay accounts."

Alipay is one of China's largest online payments systems, with over 450 million active users.

The VR space is expected to see a rapid uptake in the next few years, with the introduction of several new VR headsets this year including Google's Daydream VR and Sony's PlayStation VR.

Spending on VR headsets is expected to reach as much as $7.9 billion by 2020, according to data analytics firm IHS Markit.

The payment process on VR Pay involves two steps: first, users log in to their account in order to verify their identities; then they are required to enter a password to confirm the payment.

User identity authentication can be done using voice print technology, which can recognize individual voices of users, or by logging into the account through the smartphone and then syncing it to the VR handset.

To confirm payment, a password has to be entered and it can be done in three ways: first, by tapping onto a touch pad, like the one found on Samsung Gear VR headsets; second by nodding one's head, and lastly by staring at different numbers on the VR display screen for a few seconds.

This means throughout the entire process, users would not, theoretically, need to take their VR goggles off in order to finalize payments.

Lin Feng explained that the technology will be provided as an "infrastructure" and would be available to developers and Alibaba's ecosystem partners within the year.

He added that Ant Financial was going to work with Chinese video streaming site Youku Tudou, which is part of Alibaba's ecosystem, to incorporate VR pay into their livestreaming business. Earlier this year, Youku teamed up with Digital Domain Holdings to develop VR content for the Chinese market, according to media reports.

"In China ... audiences love to buy virtual gifts for Internet celebrities who are hosting a show," Lin Feng explained.

Alibaba dived into virtual and augmented reality earlier this year with the introduction of the Buy+ VR technology that it hopes could help shops bridge the gap between the online and offline worlds.

In September, Ant Financial acquired U.S.-based EyeVerify, which makes optical recognition products.

— CNBC's Huileng Tan and Haze Fan contributed to this report.

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