7 Creative Uses of AI in Digital Payments

AI or Artificial Intelligence is known for streamlining processes securely, but when it comes to the digital payment solution, AI goes beyond streamlining and offering security. AI brings automation and enables users to monitor online payments. It’s interesting the jot down seven highly amazing uses of AI in the payment industry.

How AI Transforms Digital Payment Industry?

1. Neural Technology Works Wonders

A self-driving or autonomous car is no longer a new concept, but have you ever thought that the technology used behind a self-driving car can be used in finding fraudulent card or loan applications? Yes, the neural network technology or Artificial Neural Network (ANN) is the technology behind the autonomous car. It imitates the human brain and has played a vital role in finding the stolen identities from the Equifax data breach and other incidents.

ID Analytics has launched a new fraud scoring system for new applications based on convolutional neural network technology. It is a much-advanced version of the existing system and provides banks or financial institutes with indicators on whether the fraud attempt is done from a first or a third-party source. The neural technology creates a 3D model of the person’s data that includes the address, phone number, and transaction history.

2. Bot Attacks become Reality

The Fintech industry becomes more dependent on AI technology with every passing day. Whether we talk of enterprise-focused banking apps like Chime and Wave or AI-based chatbots that facilitate the users to get personalized notifications on spending and investments, the AI technology gains traction among entrepreneurs.

Here we are pointing toward the flip side of machine learning and AI bots. Fraudsters utilize AI-powered bots to commit online fraud that becomes a big challenge for various industry sectors including the travel industry. The travel or tourism industry witnesses various types of online and offline fraud attempts especially during the holiday season. Many criminals want to exploit the situation arises because of the surge in travel volume.

Many cybercriminals use bots to reserve seats on flights to cause a wrongful increase in the price of unsold seats. Travelers and tour companies have to witness various challenges arising due to the fraudulent use of bots.

3. Payments and Social Media Fusion

After seeing the dark side of AI, let’s go through an exciting opportunity for a digital payment solution. Yes, it’s a fusion of payments and social media. Facebook, Alibaba, and several other companies have made the most of fusion by bringing payment solutions through messenger apps. Amazon has now followed suit by working on a messaging platform known as Anytime.

We can certainly expect that the term “conversational commerce” will gain ground in the fintech and eCommerce segments alike over the period. Days are not far away when conversational commerce will be broadly adopted by people across the world. Chris Messina has already predicted the bright future of conversational commerce back in 2016. Consumers will utilize all means like chat, messaging, and even voice for making online transactions. AI technology will play a crucial role in making this possible.

In the near future, the lines between the human agent and a computer bot will be blurred as the users will not find the difference between them thanks to the advancing AI technology.

4. AI Bots on Facebook Messenger

Financial companies and banks have gradually started deploying AI-based bots on Facebook Messenger to handle payments and offer personalized customer services. American Express (AmEx) is one such company that has a dedicated chatbot on Messenger for sending transaction notifications and benefit reminders to users. Every time the user buys anything, the dedicated chatbot sends a notification regarding the transactions.

Another version of AmEx chatbot enables users to add a card while linking an AmEx account to the user’s Facebook account. The card’s credentials are then stored with the user’s Facebook account to facilitate them to transact on the social network. We will have more intelligent and powerful AI bots in the future that will perform various tasks on Facebook Messenger and other social media channels. Simply put, the presence of AI bots on Facebook will boost the concept of conversational commerce.

5. AI to Make Users Financially Healthy

This is one of the biggest benefits of AI. A fintech startup Douugh has developed an AI-based virtual assistant to help its consumers regain financial health. Sophie, as Douugh has named it, can assist consumers to reduce their credit card debt and student loan while enabling them to make better savings decisions. The virtual assistant also runs diagnostics on the financial positions of customers and manage their spending goals while handling payment-related tasks like bill payment and track payments. In a way, Douugh has made a giant leap toward offering a smart bank account to its customers.

AI technology is designed to analyze the user’s or customer’s behaviors and making predictions. When it is implemented into the fintech sector, it keeps on analyzing the data regarding the customer’s spending pattern and saving habits. In a way, it can help users maintain a subtle balance between the loan and deposit while making them financially healthy. In the coming years, many fintech companies and the BFSI sector as a whole will leverage the benefits of AI technology to provide 360-degree financial solutions.

6. Bot Turns Banker

Singapore’s largest bank DBS has utilized the concept of conversational AI to take the customer experience to a new level. This approach enables the bank to manage customers’ accounts and facilitates them to initiate payments. The bank has taken enough care to make the interactions natural so that its customers do not realize that they are talking to a bot and not a human being.

Kai, the AI-powered bot of DBS can do more for the bank’s customers as compared to agents in customer centers. For example, if the customer asks about the amount, they spent on groceries last month, the agents might take some time to get the data, but Kai gives answers immediately.

Many other banks will also come up with robust and reliable bots in the coming years. On one hand, such bots will relieve the pressure on bankers, and on the other hand, customers can get improved services on a 24/7 basis.

7. AI Makes Stores Intelligent

It’s time to make the walls and ceilings of your brick-and-mortar stores. Shanghai’s self-driving supermarket Moby has actually implemented this futuristic approach in which the supermarket ‘recognizes’ customers through a mobile app. What’s more, the store is solar-powered and it has a holographic greeter as staff.

Though this concept at its nascent phase, it has a vast scope and it offers a lot of opportunities for the retailers. Talking about the reason why Moby store has experimented with this concept in Shanghai, the store wanted to maintain a retail presence in the areas where the economy cannot support a permanent grocery store. Here, though the AI technology takes care of the customer service and delivery process, the autonomous store, help from humans is still necessary to return unsold items to a warehouse.

Amazon Go is a more efficient example of a concept store. It has sensors throughout the store instead of holographic greeters. Sensors can readily detect what customers are purchasing and which payment method is used. In other words, AI-based sensors simply collect and analyze the data related to the user behavior.

In a nutshell, AI is a game-changer in the digital payment industry.  As technology gets mainstreamed in the sector, we will have innovative and creative uses of AI technology.