How will AI influence the payments industry?
The payments industry is one of the best industries to pair with artificial intelligence (AI) because it is highly based on logic and information. These are two areas where artificial intelligence thrives, which could mean substantial gains for both companies and their customers.
This article sets forth some changes we can expect to see in the payments industry in an AI- powered future.
Artificial intelligence has already proven to be a driving force when it comes to innovation. The reality is that it can do things that humans can't—and it can do them very quickly. As AI enters the market, it is very likely we will see better solutions begin to arrive. Sharper, smarter, faster and better business practices may be just around the corner thanks to this exciting technology shift.
Improved fraud protection
Since artificial intelligence is able to review and evaluate information very quickly, often in real- time, it is an absolutely invaluable tool in fraud protection. These systems can spot red flags with a much higher success rate than some of the systems in use today. In fact, some companies are already using AI-powered systems to monitor for potential fraud.
This change can surely benefit companies and customers alike. Everyone wins when criminals lose. Thanks to AI, companies can reduce losses, and customers can enjoy enhanced protections and fewer customer service calls to address fraud. In fact, AI can reduce fraud by as much as 96 percent in some cases see.
Additional fraud risks
Although AI can significantly reduce fraud, it also has the potential to be used to commit it. There are quite a few security risks coming to light with the introduction of artificial intelligence. Since AI can generate systems with minimal input, fraudsters can benefit from better and more damaging technology.
One of the biggest concerns regarding fraud and AI is deepfakes. Using AI technology, criminals can mirror a person's voice and likeness, making it fairly easy to impersonate them. With the right information, criminals can do significant damage and make it look like the person committed the actions themselves.
Math is at the root of analytics, and when it comes down to it, artificial intelligence is made of math. It should come as no surprise that, for this reason, AI systems are incredible tools for analytics. Being able to crunch numbers and make connections is what artificial intelligence does best.
Modern analytics rely on complex systems and human computing to organize and assess information to gather key insights. Artificial intelligence, however, has the capacity to do this all on its own. It can work smarter, harder, and faster, allowing us to do more with data. This can open up business efficiencies and offer valuable tools for customers.
The world changed when ChatGPT hit the market, but the system itself is almost old news at this point. Today's attention is on the next stage of the AI revolution— systems generated entirely by AI. It is very likely that software engineers will be able to create better and more powerful tools to support customer needs with the assistance of artificial intelligence.
Better customer service
Every business knows customer service is essential, and few things influence customer service quite like accessibility. While chatbots have been supporting customers with standard requests in recent years, AI is likely to give them a major upgrade.
Many of the problems we currently rely on human customer service agents to solve will likely be able to be handled through AI-powered bots instead. Customers will be able to skip the wait times and receive concrete solutions too. It is believed that AI will manage 95 percent of customer interactions by 2025 see.
With artificial intelligence supporting these efforts, customer service reviews are likely to get better for businesses.
New payment methods
Blockchain and cryptocurrencies are changing the payments industry in significant ways. Once again, this is an area where artificial intelligence is likely to make an impact. With these systems working in tandem, it is likely we will see the adoption of new payment methods, which can be made available through payment gateways. In the future, new currencies may become more common.
Payment gateways play a key role in modern business, allowing companies to accept purchases all around the world. With artificial intelligence joining the ranks of players in the payments industry, it looks like we can look forward to several positive changes.
While we cannot guarantee where the payments industry will go in the future with AI behind the wheel, we can expect innovation and opportunities like never before. Whether your merchants' customers make purchases via websites or in-person in physical stores, these new systems should empower you to bring more to the table.
Faster and better technology can lead to significant positive changes in this industry.
Side Note: AI, a hot topic in 2024
Following are excerpts from The Green Sheet's recent coverage of the current AI surge:
From "Rolling out 2024 – Part 2" by Dale Laszig, Jan. 8, 2024, issue 240101:
One of the biggest developments of 2023 was the emergence of generative AI, which Leach expects will follow the same cycle as other disruptors that require enterprises to re-evaluate approaches to authentication and transaction security.
To read the full article, visit www.greensheet.com
From "Does AI have a bubble problem?" by Patti Murphy, Jan. 8, 2024, issue 240101:
I may get blowback on this, but the way I see it we are living through an AI bubble, and like other bubbles before it, this one will burst. Before continuing, let's agree this is not necessarily bad news, and that artificial intelligence is not inherently bad. Machine learning tools and other forms of AI have been used for generations, with success, for banking and payments applications, including fraud prevention and detection.
To read the full article, please visit www.greensheet.com
From "AI is coming for us: Legal strategies for ISOs" by Adam Atlas, Jan 8, 2024, issue 240101:
Perhaps more than was true for earlier technology advances, it's hard for us to imagine today exactly what AI will do to the payments landscape. As a follower of some developments in AI and a legal adviser in payments, some possible issues arise that perhaps merit review for ISOs and payment processors.
To read the full article, please see www.greensheet.com