Cash transactions are slowly turning into a thing of the past. Especially in the post-COVID era where physical cash transactions have been reduced to a bare minimum. The world has suddenly pivoted to digital payments in what seems like no time.
However, the wheels for digital payment as an established payment method had been set into motion a long time back. Right from net banking, swiping credit cards, to using digital wallets, people had already been using digital payments to a large extent when it came to handling money and transactions.
The pressure on this entire system increased when COVID struck globally, as people were facing prolonged lockdowns and isolation and had to depend entirely on online shopping for all their needs, be it clothes, devices, medicines, or groceries.
It was also during these times when online transactions and shopping peaked, that sellers, buyers, and online payment platforms saw a surge in frauds, false declines, and glitchy payment experiences that left customers shocked, embarrassed, and demotivated when it came to using online payment methods.
Not only did this affect the shopper but it also affected businesses negatively. Looking from a macro angle, these false declines hurt the economy, as well, given the tremendous number of sales lost.
In the event of increasing dependency on online transactions and digital payment gateways, and given the frauds, cybersecurity attacks, and false declines, fintech companies are upgrading their AI solutions to match the current market needs while also preparing for a foolproof tomorrow by making these systems more robust than ever.
AI is no longer just limited to streamlining workflow and bringing in added security to payment systems. In today’s context AI payment gateways are going a step beyond in making financial transactions easier, glitch-free, and in some cases, completely frictionless and educational, as well.
In this article, we look at 5 ways in which AI has revolutionized digital payments.
This technology surpasses the contactless Visa card payments that use Near Field Communication (NFC) to drive close-range payments without swiping the card or entering PIN up to a certain payment limit.
Face-pay is a payment confirmation system powered by AI-face recognition. This allows lesser engagement for the customers who can just scan their faces to make the payment, without the need to take out the card from their wallets, swiping it and entering the PIN, etc. By eliminating the extra steps in payment, physical stores and restaurants can ensure ultimate contactless payment, speed up the payment process, improve the shopping experience, reduce hassles, and in some way increase shopping cart values, as well.
A glitch-free payment transaction is basic hygiene for digital payments. Yet lags and delays cause frustrations for both sellers and buyers, leading to a less than pleasing buying experiences. This doesn’t reflect well on either the payment gateway but most importantly fails the seller in providing the customer with a smooth buying experience.
Enter AI-powered stores like Moby in Shanghai which came into existence back in 2017 and uses a futuristic approach that enables customers to be identified via their mobile app while a holographic greeter welcomes them to the store. The AI tech in the store provides a smooth buying and delivery process whereby payments become seamless as well.
A similar and more efficient example of the AI-powered stores and payment is A concept store by Amazon, that has sensors placed throughout the store that track what customers are purchasing and what payment method they are using. The checkout is unlike any store checkout ever. Amazon promises no lines and no checkouts.
Avoid fraudulent transactions
With more users moving to online shopping and getting acquainted with the digital payment ecosystem, the eCommerce industry has been witnessing a sudden surge in fraud and scams. As a result, digital payment gateways have increased their spending on cybersecurity to ensure that the fraudsters are kept at bay.
While most eCommerce and financial services companies have inbuilt systems in place to track and block fraudulent activities, the dependence on human intervention for the same can prove to be the weak point where the attacks take place. As transaction volumes increase, it becomes more difficult for humans to differentiate the fraudulent transactions at a higher speed and that’s when the lapses occur.
With the right kind of human input, task-specific AI recognizes these attacks and fraudulent transactions thereby improving overall fraud detection and prevention to a greater degree for digital payment solutions.
Maintain financial health
One of the more customer-centric and creative uses of AI payment gateway is the integration of AI-based chatbots or virtual assistants who help users ensure financial health by helping them reduce their debt (credit card debt, student loans, etc.) and helping them manage their savings better.
The AI assistant carries out these tasks by running diagnostics on the user’s financial standing, their incomes, expenses, studying their spending goals, and handling regular payments such as bill-payment on time to ensure zero default and fines.
Thanks to AI, these virtual assistants can also help users make informed decisions by empowering them with predictive decision making and helping them see a bird’s eye view of how their financial situation will pan out.
This step introduces much-needed financial awareness, thus making users financially healthy in both the short and long term.
The sheer amount of online and offline traffic that banks see when it comes to customer support is overwhelming. Recruiting, maintaining, and training executives to manage customer queries with increased efficiency and lesser turnaround times is not an easy feat to achieve.
Enter banking chatbots powered by AI. These conversational AI chatbots provide a next-level customer experience by managing accounts and helping them initiate payments in a matter of seconds with close to zero wait times. Also, the speed at which they pull up information from the database to answer customer queries is unparalleled.
AI-powered banking chatbots have reduced pressure on bankers to a great extent while also improving service delivery by banks. All in a way such that customers don’t even realize that they are talking to a chatbot and not an actual human representative.
Digital payment solutions and AI payment gateways are two core functions that can make or break it for fintech. By having secure, seamless payment gateways, powered & protected by AI systems in place, sellers can provide customers with a better buying experience, increase platform stickiness, and enjoy extended LTV with more loyal customers onboard.