How AI could make your payment systems faster, personalised and more secure

- April 4, 2023 3 MIN READ


Artificial intelligence, and programs like ChatGPT, have taken the world by storm recently, with experts hypothesising the many ways it could revolutionise business. But could AI also impact the way we take online payments? asks Chris Dahl, co-CEO, Pin Payments.

Since the pandemic, many businesses have digitised operations and through this process examined how to improve payments processes with online providers. This shift has undoubtedly improved operations and streamlined manual processes for many small businesses, but could AI take this even further?

As experts in the payments space, we wanted to understand how evolving technology might impact the FinTech landscape, so we’ve pulled together a few possible ways AI might disrupt the online payments space.

Five ways AI could change the payments landscape

1. Greater fraud detection and prevention

As we’ve seen with some of the major data breaches these past six months, fraud is an ongoing issue surrounding payments, which results in criminals using several tactics to steal customer information.

Typical fraudulent activity includes conducting account takeovers, hacking into customers’ accounts, and conducting sales using stolen payment information. Whilst payment providers have systems and dedicated resources in place to detect fraudulent activity, there are times when scammers go undetected. In fact, last year alone Australians lost $8,465,443 to classified scams.

AI-powered fraud detection tools are already in use by many major companies to help identify and prevent fraudulent transactions, by analysing large amounts of data to detect patterns and abnormalities. However, as AI tech continues to improve, so too will its ability to prevent cyber attacks and/or fraud.

While some fintechs still believe traditional fraud detection methods are best, instead of relying on AI, it’s likely most institutions will transition altogether to AI and machine learning techniques for fraud prevention.

2. Personalised payment experiences

AI has the power to help businesses personalise experiences for their customers by understanding their unique online habits, and this could be true in the payments space too. Whilst not yet available, it could be possible for online payments providers to offer payments services which cater to the needs and preferences of its individual users, by tailoring payments options, automating rudimentary scheduled payments, and offering quick tools and services through AI assistants within a payment platform.

For example, AI-powered payment systems might automatically suggest payment methods based on the user’s location, device or previous payment history. Likewise, AI chatbots and virtual assistants are already being used by businesses to provide customer service and support, and in the future could be used to answer more complex questions or provide tailored payments support.

Whilst the true extent of this is not yet known, AI will undoubtedly make taking and receiving payments much easier for businesses and their customers.

3. Voice-activated payments

Whilst not widely available yet, voice-activated payment systems are beginning to gain momentum, which enable users to make payments using voice commands. Whilst, at present, there are some limitations around the security of taking payments using this method, as AI continues to improve, this will change.

For example, Amazon’s Alexa and Google AI Assistants can already recognise natural language and process some payment requests in real-time, so as AI tech improves, we will no doubt see this begin to rise in popularity.

The benefits of voice-activated payments include convenience and offer a hands-free way to make payments on the go. However, we need to see better security surrounding voice biometrics to authenticate a user’s identity, to ensure fraud does not occur with this type of payment.

4. Biometric authentication

AI is already in use, and has been extremely useful, in the authentication of people’s identity using facial recognition technology and fingerprint scanning. Whilst some payments platforms and financial institutions are utilising these technologies already, as AI improves, the extent to which a person’s identity is detectable using biometrics will improve exponentially.

The benefits this could provide to online payments and fraud prevention could be huge, given it could make it extremely difficult to assume another person’s identity.

5. Predictive analytics for payment processing

Another exciting area regarding AI for payments is predictive analytics, which will enable vast amounts of data to be analysed to provide high level payments trends, predict future payments behaviours and speed up processing time for payments. Likewise, many aspects surrounding payments such as risk profile assessment could become automated or handled by AI virtual assistants.

While the full extent of AI’s impact on the payments landscape is not yet known, its capacity for change is huge. It’s likely the next few years will see the tech landscape shift in a transformational way, permanently altering the way businesses operate.

Want more? Get our newsletter delivered straight to your inbox! Follow Kochie’s Business Builders on FacebookTwitter, Instagram, and LinkedIn.

Now read this:

4 new AI content tools small businesses should definitely explore

Small Business Guide to Tax Time with Mark Chapman