Glossary

AI in Payment Proseccing
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AI in Payment Processing

Updated 18 Dec 2022

Artificial intelligence (AI) has been around for a while and is constantly transforming our surroundings. With technological advancements, this cutting-edge technology has blossomed in our daily lives, and payment processing is no longer an exception. Artificial intelligence in digital payments is here to stay.


The majority of cutting-edge technology already in use today is built on AI. The entire overview of artificial intelligence’s function in payment processing is included in this article.

What is Artificial intelligence?

Over the course of the next ten years, artificial intelligence (AI) will totally change the corporate environment. This group of technologies will alter how businesses connect with their customers, run their machinery, employ their staff, develop goods and services, and make long-term plans. These technologies are capable of doing activities that traditionally needed human intellect.

Artificial intelligence (AI) technologies include cognitive reasoning, machine learning, deep learning, and natural language processing. Cognitive reasoning replicates human judgment (concluding natural language data). Robotic process automation (RPA), which automates tedious activities, may be utilized in combination with these technologies to great effect. The high-quality, structured data produced by RPA may be used by AI to find trends and extract useful information. For example, it comes into use for cases such as for making an AI marketing payment.

A variety of commercial endeavors, including shrimp farming, beer brewing, the creation of self-driving automobiles, and the optimization of oil and gas production, are already using AI. The financial services industry was a leader in using AI, using tools for everything from stock selection to fraud detection and conduct monitoring. The employment of chatbots in banks’ customer care departments shows the great potential for AI to be broadly embraced in transaction banking in the future.

What is AI in payment processing?

Digital ai payment processing has been digitized by artificial intelligence (AI), which has also streamlined online bill payment and online shopping. 25% of small and medium-sized enterprises utilize AI technology for banking, financing, and financial management, according to the 2019 Global FinTech Adoption Index. By emulating the activities of in-person customer care but more quickly and with 24/7 access, AI-powered digital banking improves the customer experience. Customers may communicate with a chatbot or virtual assistant without having to wait to speak to a real person because of clever IA’s support for natural language processing.

Computer vision is another aspect of AI that is beginning to be used in payment processing to replace cash and credit cards. Customers utilize cell phones to make transactions, and account information is maintained online (i.e., Google Pay, Apple Wallet, etc.). Additionally, financial institutions are beginning to use computer vision to enable clients to create accounts online rather than in a traditional bank.

Online payment processing has a lot to gain from artificial intelligence. Here, the impact of AI on the payment processing industry is discussed, along with its potential in the future.

Fraud prevention

Transaction banking may be a great use case for AI in payment processing since it is characterized by a huge number of procedures, supports a significant number of user contacts for everyday banking, and generates enormous amounts of data. Particularly in the areas of fraud detection and prevention, payments, and onboarding, AI offers enormous potential.

By highlighting odd transactions, such as those where a large amount is involved, the transaction was started by an unexpected party, or the organization has never done business with the destination firm or nation receiving the money, AI can assist in avoiding and identifying fraud. Additionally, AI technologies may track and detect odd employee habits like entering into financial systems after hours.

Chatbots

Customer service is perhaps the area where AI is deployed most frequently now, despite the fact that there are numerous potential use cases for it inside transaction banking. A standing order or Direct Debit may be created or canceled, more information can be provided on a payment the customer is unsure of, and other basic functions can already be completed by chatbots (computer programs designed to converse with humans using speech or text). 

Authentications

AI in payments industry is a pleasant inclusion as it helps with the industry’s struggle to strike a balance between security and user-friendliness. Customers and companies alike want a straightforward payment option that many people can utilize.

The consumer must follow a number of steps in order to perform a transaction and verify themselves. The issue here is that biometrics are susceptible to fraud. Dual-factor authentication was the sole choice up to this point. However, payment service providers may use AI to determine what is usual for customers. When a transaction is in line with a customer’s desires, there is less risk.

Payment orchestration

Payment orchestration systems will be at the forefront of the battle against eCommerce cybercrime because they are in a unique position to gather data and give a homogenous and comprehensive picture of transactions, enabling analysis that supports fraud prevention efforts. The platforms may assist in making payment processing very safe by gathering payment data on the same platform and integrating various service providers and fraud detection and prevention solutions, thereby lowering the number of frauds experienced and the number of false positives in transactions.

Payment orchestration platforms can use AI and “smart routing” to direct payments to the best acquirer for a given transaction or to a particular fraud prevention platform, even if those aren’t necessarily provided by the PSPs a merchant typically uses. As a result, orchestration platforms are not restricted to a single payment provider but instead automatically choose the best-performing gateway while taking security and other pertinent factors into account. As a central center for handling a complicated set of collection flows from various sources and payment methods, payment orchestration systems make it easier to coordinate all collections, which is a crucial step in fending against digital threats.

Key business benefits of AI in payment processing

Digital banking and artificial intelligence in payments processing have become simpler thanks to artificial intelligence. This is why:

Gathers financial data quickly – Quick access to transaction history and account details are provided.

Higher ROI – AI is expected to boost the GDP of the financial and professional services sector by as much as 10%.

Dedication to preventing fraud – One of the best aspects of AI is machine learning since it can immediately identify unsafe behavior and fraudulent conduct.

Saves both money and time – Operating and human resource expenses are reduced via interactive chatbots and virtual assistants.

Conclusion

The human race has a lot to gain from artificial intelligence. It is used in online payment processing for a variety of reasons, the main one being fraud prevention.
Coming soon are chances for internet company owners to use AI in online payment processing. But until AI can entirely replace fraud experts, there is still a long way to go.

In order to compete in the fiercely competitive market, businesses must keep up with the rapidly evolving technology. There is a definite future for an AI-powered online business environment.

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