In our continued quest to uncover trends that will disrupt the payments industry; we come face-to-face with the most talked about and futuristic tool – Artificial Intelligence. It was 50 years ago that AI was first conceptualized – fast forward 2018, the smartphone in your hand can now unlock with facial recognition. AI is a revolution that will completely transform the business landscape over the next few years. This technology can carry out tasks that we thought were only possible with human intelligence.
Many leading brands having already tinkered with the idea of machine learning predict every aspect of our lives will be shaped it right from self-driving cars to predicting diseases. The recently launched pani puri vending machine in Ahmedabad with inbuilt cleaning, a small LCD, refill functionalities and the ability to tweak the taste from spicy, medium or sweet as per your preference is just one way the AI is transforming our lives.
How does Artificial Intelligence Work?
Machine learning is at the core of AI. It’s the ability of the system to think, learn and grow. Both in a supervised and unsupervised manner. In the developmental stages AI must constantly be taught until it can do it on its own. Recollect the movie AI about a robotic boy who seeks to become human or the Terminator movie series, where Skynet – a small program eventually gains self-awareness. Learning is essential for AI to function and do its job.
Specific patterns can be recognized by machine learning
which helps in its ability to perform better
Artificial Intelligence in the World of Payments
Businesses will change once AI is fully integrated in various processes. Right from how they interact with their customers, operate their machines, use their human resources, create products, develop services and plan for the future. The possibilities of AI application in the payment industry are infinite. Some of them have already been discovered and used successfully, but the rest are yet to come. For customers, personalized payment experiences await with AI. Their past spends can be analyzed, payment devices prompted and even suggest the suitable payment mode during checkout. For instance, availing frequent cashbacks could trigger the system to prompt the customer’s payment mode to avail maximum cashback.
720 billion digital transactions by 2020
With the increased cashless transactions comes the threat of frauds, but AI will be there to identify them in real time and tackle instantly. Complex and growing algorithms will mine data from any customers purchase history, predict patterns for fraud while improving risk management. Thereby saving costs, time and effort required by the payment companies and PSP’s to handle fraudulent transactions.
What Holds in the Future of Payments?
The operational efficiency will be improved overall thereby reducing the processing times and human error. More user insights will be delivered through increased automation. Imagine a virtual mirror in a clothing store that lets customers see what a dress looks like on them just by standing in front of it. This allows customers to try and select lot of different items and when it comes to checking out the payment experience is so customized that they can select their preferred payment mode with a lot of offers and cashbacks. Consumers will be led to a frictionless checkout – one which doesn’t sacrifice security and provides a lot of convenience. AI would also reduce the payment processing times into half while keeping the sensitive information safe. In the future, we can expect every consumer transaction will be predicted and optimized for maximum convenience.
Hope you enjoyed this post. You can read the first part which focused on The Internet of Things. Stay tuned for more future trends that are likely to have a huge impact on the payments industry in the subsequent blog posts.