Existing credit card processing technology enables a customer to use their payment card to make purchases both in-person and virtually. While this tech allows instant verification and authorization, thanks to the fast-acting digital communication between the seller, credit card agencies, and financial institutions, companies are looking for even more innovative methods to process and verify the transaction data.
The growing use of artificial intelligence technology is being applied to the payment processing industry in various ways to reduce human error, eradicate fraud, and increase the overall user experience.
There is a wealth of ways artificial intelligence is considerably enhancing and improving credit card processing. Explore the top points below.
1. Eradicating False Declines
When a legitimate transaction is declined it can be frustrating for both the merchant and consumer as this is a completely avoidable annoyance. While companies can look at past buyer purchases to weed out some of these occurrences, artificial intelligence is a revolutionary means to stop false declines in their tracks. By using AI, companies can update buyers' purchase information in real-time based on the transaction conditions.
For credit card giant MasterCard, the use of dynamic artificial intelligence has proved nothing short of game-changing by allowing the company to factor in rapidly shifting data for any account across the globe. They have managed to achieve this via their Decision Intelligence service, which essentially seeks to assess and rate each purchase and transaction with the goal of analyzing the transaction in a process known as machine learning. This process allows them to improve the product and ultimately the customer experience.
While false declines may not seem like a major blight in the world of online transactions, MasterCard has previously stated that false declines in just the United States totaled around $118 billion annually, in contrast to credit card fraud which amounts to about $9 billion a year, according to figures from Javelin
2. Achieving Improved Service Through AI Assistants
While science fiction has made the world wary of AI assistants or servers, they have long been embraced in industries such as finance due to their ability to serve customers efficiently and faultlessly.
Take DBS Bank for example. This major Singaporean company launched a mobile bank in Indonesia back in 2017, utilizing a humanized virtual assistant developed especially for the finance world.
DBS's exciting new platform employed AI algorithms to provide a more human experience for users seeking account and transaction information. Their implementation of this tech not only paved the way for a paperless service but further cut down on human error, decreased operation lag time, and was so meticulously and accurately designed it was often tough for customers to tell whether they were talking to a machine or a real person.
3. Better Fraud Detection
Detecting fraud is more than just a costly problem, it is a time-consuming issue that puts the brakes on payment processing. The use of AI in fraud detection allows banks or credit card providers to not only weed out likely risks but also better prevent this occurrence through risk management.
For the past 25 years, VISA has been at the forefront of utilizing AI technology for precisely this purpose. The system seeks to understand client behavior and analyze transaction patterns, allowing suspicious purchases to be instantly flagged. This information is then directly passed on to the bank that issued the card.
4. The Ability to Implement Intelligent Chatbots
For global companies with millions of clients, manning an efficient customer service line can be tough. The use of chatbots through an AI system, however, is a popular solution. Take PayPal, for example - this major global player employs AI chatbots to handle thousands of daily queries that would otherwise inundate customer service lines resulting in excessive time and money. These bots provide useful information on-demand to clients and increase the overall user experience.
As more and more companies across the globe embrace artificial intelligence to process payments, human error declines, fraud cases plummet, and user satisfaction and convenience skyrockets. While many businesses are already enjoying the basic benefits associated with AI-powered technology and fraud detection, usage for AI is quickly expanding.
So how will the skyrocketing usage rates of artificial intelligence further transform the payment industry? In the near future, we could be looking at features such as biometric secured payments, voice-activated transactions, and computer-vision based payments. Facial recognition technology has been present for years; however, some payment companies see this as a critical feature in the future of digital payment processing.
An example of the present-day application of this is Amazon's deeplens technology. In 2016, the eCommerce giant launched its cashier-less grocery store where cameras and sensors enable shoppers to immediately check out their items without even taking out their wallets.
Similarly, businesses are exploring the possibility of utilizing smartphone voice-recognition and biometric technologies to enable seamless transactions. Through this feature, AI would access the shopper's accounts for the transaction through voice-activated messages.
As companies search for newer and better frictionless payment methods every day, the payment processing industry is constantly undergoing a digital transformation to improve user experiences.