How is Artificial Intelligence Changing Mobile Payments?
Mobile payment users are expected to hit 2 billion worldwide by 2020, according to Juniper Research, and there’s no question that artificial intelligence will change mobile payments and has the potential to greatly disrupt the banking industry. Mobile payment applications are sought after for the ease and efficiency they add to the user experience. While artificial intelligence and machine learning work behind the scenes of these applications, together they are about to revolutionize the end-user experience. How will artificial intelligence change mobile payments?
An Open Market survey revealed that mobile customers prefer to engage with chatbots and SMS text messaging, with financial services being the top industry in which they want to see better customer experiences and engagement in this area.
Bank of America is just one example, with the launch of their chatbot Erica, with whom customers can communicate with via voice or text message to help manage finances. PayPal is another transaction service that integrates their chatbots with social media applications such as Facebook Messenger in order to allow users to make a payment within the the app.
Predictive Analytics and Machine Learning
Together, AI and predictive analytics can help companies identify patterns in data in order to customize e-commerce for individual consumers. Because predictive analytics can mine through large quantities of data quickly and efficiently, many companies are utilizing big data to understand their consumers spending habits. Data findings from predictive analytics provide timely information about consumers that can lead to increased engagement and improved business planning.
Combined with AI, predictive analytics can help to provide actionable insights for businesses. Capital One utilizes both in order to create new products and deals for their consumers based on their spending behavior. Amex utilizes American Express Business Insights analytics to sift through transaction data “from a network of approximately 90 million cards in circulation in over 125 countries”, according to an article by MEDICI.
Artificial Intelligence, Mobile Payments and Fraud Detection
Transaction filtering to prompt only high-risk transactions with a security chargeback layer is one way that AI technologies are impacting mobile payments and improving the end user interaction. These measures avoid deterring “good” customers returning to abandoned carts or performing frequent, low-risk transactions by utilizing real-time attributes like geolocation, behavioral analytics and physical biometric traits to identify charges that may be fraudulent in nature. Artificial Intelligence being applied to mobile payment processes is aiding in reducing customer friction, which may in turn encourage mobile sales.
Machine learning and artificial technology are the secret weapons that the leading fraud prevention companies use to combat fraud. Consider Kount, the company that pioneered machine learning technology to combat fraud with their patented product, Kount Complete™, the most comprehensive all-in-one solution to identify and stop fraud at every transaction.
Fraud platforms that employ emerging technologies to fight fraud are another example of how artificial intelligence is changing mobile payments.
Reduction in False Declines
At times, the layered security efforts taken to reject suspicious activity can cause inconvenience to harmless customers during the checkout process. By use of AI pattern identification capabilities and machine learning, solutions like Decision Intelligence from Mastercard can facilitate “a real-time authorization… that applies thousands of data points and sophisticated modeling techniques” to push legitimate transactions through. False charge declines are as prevalent of an issue as payment fraud.
So, how is Artificial Intelligence changing Mobile Payments? Our world is becoming increasingly complex and the demand for easy and hassle-free purchases of goods and services will continue to accelerate. As more technology is introduced with every smart phone OS update, global giants like Apple and Samsung, are gaining consumer reliance on device features that leverage artificial intelligence, machine learning and mobile payment applications. As a result consumers will embrace digital and cashless payments and emerging technologies.
Mobile payments and FinTech are rapidly evolving, and with it businesses need to also pivot to stay on top of AI technology to advance in this space. Artificial intelligence is already at work, revolutionizing the way consumers bank and utilize mobile payment applications in the hustle and bustle daily life.
How can you stay on top of emerging technologies? Attend this year’s Mobile Payments Conference to learn more about how the world of mobile payments is evolving. Get your Mobile Payments Conference 2018 tickets today.