The modern consumer wants fast and secure systems capable of processing instant payments anytime, anywhere, right? We all do. And artificial intelligence (AI), an indispensable driver of fast-paced innovations across various industries, is undoubtedly the best solution to achieve that.
Communication between humans and devices continues to improve with growth in AI. In the payment technology industry, it has revolutionized the interaction between customers, financial institutions, payment processors and merchants.
Take a look at how artificial intelligence is transforming payments and what it means for your business.
Advanced Fraud Prevention
Traditionally, consumers had to physically visit brick and mortar stores to purchase items. Then e-commerce came and eliminated the restrictions of borders and time zones. Shoppers buy products online anywhere, anytime without using cash, and sometimes even without cards. With paperless and cardless transactions, measures to prevent fraud in real-time are more critical than ever.
Consumers are not liable when they become the victim of fraud. But with tens of millions of transactions happening every day, how do you know your business and customers are being protected? Humans simply cannot monitor this many transactions happening concurrently without inevitably making errors. This is where artificial intelligence offers a near-perfect solution.
As consumers make transactions, they generate large amounts of data that lays a foundation for machine learning. AI-based payment systems use machine learning algorithms to depict in real-time the spending patterns of customers from payment data. As buyers continue making payments through the system, machines are able to effectively and efficiently recognize spending behavior better, thereby becoming far more successful in detecting suspicious transactions.
Additionally, AI-backed payment systems can send signals whenever they detect anomalies in a customer’s account. For instance, the system can send an instant alert when a bill is abnormally higher than the customer’s typical monthly bills. It can even stop the payment and prompt the customer to provide further authentication details for approval.
Clients want a smooth and safe buying experience that is available at all times. Therefore, smart merchants ensure that their order fulfillment channels are as frictionless as possible. Voice commerce, a brainchild of AI, has become an essential tool for enhancing digital interactions for consumers.
Some payment tech providers have already created chatbots that allow merchants and customers to conduct payment transactions. These bots can process natural language, generate speech outputs, accept orders and allow customers to pay via electronic means such as ACH transfer.
Research is underway on how digital merchants can fully integrate voice into payment systems to have a complete voice-commerce channel. A 2018 study by PWC found that more than 50 percent of the respondents had made a purchase using voice command. An additional 25 percent of respondents said they would be comfortable doing the same with voice command purchases.
Cost-Effective Customer Service
AI helps payment companies and merchants respond to customer requests affordably and promptly. Chatbots can handle a substantial number of different types of queries effectively, saving businesses workforce hours and millions of dollars in operating costs. AI is projected to become even more instrumental in onboarding merchants to new payment systems, guiding retail customers in making payments and resolving chargebacks.
Biometric Payment Authorization
Lately, biometrics – the verification of accurate human measurements or calculations – have become dependable tools for authentication when users interact with digital systems. It’s not unusual to see payment processors that scan faces, thumbprints, retina, voice and more to verify the identities of customers.
Such AI systems are hard to fool, which makes them excellent potential replacements for older methods like PINs or other seemingly secure options. Merchants are getting more inclined to utilize these payment systems that require multi-factor authentication in order to best protect their customers.
Final Thoughts on Artificial Intelligence
Artificial intelligence presents boundless opportunities for different business models and industries. Retailers can use it to discover markets, detect and prevent fraud, and guide logistics, among a myriad of other uses. Some organizations utilize AI in product innovation, customer retention, money laundering detection and so forth.
When it comes to payments, customers want security, reliability and convenience, all of which are easily attainable with AI. Whether it is bankcard or ACH billing, merchants and payment service vendors should utilize AI to ensure smooth secure transitions to keep their customers safe and happy.
If you have questions, VeriCheck will be happy to assist. Contact us today!