How Artificial Intelligence is Shaping The Payments Sector
Modern Industries, in particular, the payment sectors are increasingly benefiting from artificial intelligence. In payments, AI refers to advanced analytical tech that goes beyond improving the payment environment for banks, payments processors, retailers, and buyers.
According to an IDC analysis, financial services firms will spend up to US$11 billion on AI come the year 2020 – beating any other industry. In essence, no sector enjoys the convenience of AI than payments. Another research by Consultancy.uk revealed Payments tech companies were the most likely to use AI in running their errands of all the banking categories studied.
And now, The global AI market is projected to grow more than 150% YOY, and it will keep flourishing, with estimates pointing a 127 percent year-over-year growth come 2025.
So what’s the significance of AI in payment technology?
Security is always a sticking point in the payment sector with cybercriminals struggling to penetrate the layers of protection merchants are adding to stay safe.
And no sector is committed to helping the payments firms fight fraudulent transactions like the AI industry. According to Juniper research, AI firms are looking to invest more in high-end fraud detection and prevention tech in years to come than any other sector.
Because customers are not accountable if a transaction is fraudulent, the payment sector and merchants now have to work closely with AI to reduce these losses. Since the rollout of EMV chips, counterfeit card fraud among in-store retailers has gone down 80 percent, as reported by Visa. Overall card fraud committed during card-based payments globally also declined in 2018.
AI and machine learning are helping merchants secure online transactions while also helping fight fraud in the payment sector. Machine learning algorithms help payments firms to scrutinize more data in more innovative ways to spot and stop fraudulent activity. It picks little clues on every consumer transaction like time, speed, and spending amounts helping payments companies to detect crime.
AI also helps payment providers underwrite the retailers they onboard by developing a standard that is continuously changing, stays in real-time, and adjust with any chargeback and case of fraud.
More fulfilling and affordable CX
AI can really improve the customer experience for payment providers and fintechs.
Chatbots that use NLP (natural language processing) tech to initiate conversations integrated with customer-facing settings can offer more personalized services in a highly automated yet scalable manner.
Juniper also disclosed that chatbots would help banks save billions of dollars in operation costs and millions of manpower hours if embedded to a customer-facing setting like dispute resolution and customer service.
For financial institutions and payment service providers, AI may soon become a valuable tool in resolving chargebacks and improving merchant onboarding. And for a safer way to do business, the payment industry players will still have to rely on AI solutions.
Author Bio: Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of merchant account comparison has helped thousands of business owners save money and time.