The Impact of AI on the Payments Industry

Customer experience and security are the two focal points in the payments industry. Not that long ago, we saw the importance of making instant payments accessible to a broader client base. Then, of course, we can’t do it by compromising on security.
That said, the payments sector is facing several challenges on several fronts. Businesses find it demanding to process a copious amount of data while keeping up with the regulatory demands, securing their network, and preventing fraud. Can AI help with such laborious tasks?

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AI payments

Illustration: Lenka T.

Can AI Influence the Payment Industry?

Artificial intelligence could do wonders in the payment industry. From automating specific tasks to contributing to better customer experience, AI could be the missing link to better payment solutions.

Industry experts are already touching on this topic and supporting the implementation of AI technologies in the payments sector. Although the idea is relatively young, it’s just a matter of time before new AI trends emerge and pave the way for the next digital payments revolution.  

The industry has been evolving, with the most recent evolution being contactless payments. They allow for efficient and convenient purchasing, and the majority of customers prefer this option instead of paying with cash. But despite being highly accessible, contactless payments usually don’t require a PIN (unless you reach the spending limit) or signature authorization, which raises potential security concerns. For example, someone could use your card to initiate fraudulent transactions if it gets lost or stolen.

artificial intelligence

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However, AI could be trained to detect patterns and discover transaction anomalies that would raise suspicions, allowing your bank to take appropriate action and detect fraud on time. What’s great about AI-powered systems is that they can go over large data volumes quickly, which is critical in responding to fraud and preventing unauthorized spending in real time.

AI for Contactless Payments

AI is not good for preventing fraud only. Payments giants could use it to expand their service offerings and allow customers to make touchless payments. With AI on their side, organizations could strive towards voice-activated and biometric payments, which could be a game changer for many people.

In addition to that, some AI-powered systems allow clients to automate bill payments. This is a great way for users to keep track of their responsibilities and automate tasks by creating a perfect payment schedule. PayPal and many other service providers have already implemented such features, and it won’t take long before the majority of the payments sector joins.

AI and Better Customer Experience

It’s no secret that businesses can greatly benefit from chatbots. They can help improve customer engagement and assist a great number of clients, drastically reducing waiting times. More importantly, chatbots can provide clear answers and solutions to customer’s issues, which is especially important in the banking sector. Instead of staying on the phone for minutes at a time, clients can get most answers from chatbots. Then, if human assistance is needed, an agent can hop in and help them solve the issue.

As exceptional and thorough data analyzers, AI-powered systems could be an excellent tool for predicting clients’ needs and behavior. With clients’ consent, AI can analyze everything from their payment preferences to shopping habits, helping service providers personalize their offerings and provide a seamless customer experience.

Not only that, but AI systems that analyze clients’ spending habits can help them develop savings plans and monitor their finances in a more efficient manner.

All in all, AI is slowly merging with the industry, saving businesses both time and money and providing a better customer experience. Of course, it may take a while before the experts can craft error-free AI mechanisms for this purpose. Still, there’s no doubt that artificial intelligence will soon become an integral part of the digital payments sector and transform our future.