It’s impossible to ignore the topic. AI is on every agenda, and we can be sure that it will be part of our online shopping experiences from now on. But when it comes to payment, many of the use cases for AI are already in place. Let’s look at what’s happening.
A seamless, frictionless checkout is a crucial part of the customer journey for any online retailer, and they are reliant on payment service providers to facilitate it. The sector is now building AI into user interfaces and experiences which is delivering relevant data to improve efficiencies. Analysis of a customer’s location, the device they are using, their purchase history with a retailer and their regular shopping and payment habits can contribute to an improved checkout experience and help the retailer to augment personalisation strategies.
Integrated payment systems
Retailers have adopted integrated payment systems to streamline payment acceptance processes and incorporate automatic payment acceptance. Large language models, the type of AI that can mimic human intelligence, can help to collate and analyse payment data from multiple sources and locations, which means that retail systems can quickly locate information and compile transaction data.
Managing low-risk fraud attempts
‘Card not present’ transactions are a major source of credit card fraud, however, payment processers like Computop are now using AI to analyse past data to assist in combatting fraud attempts. Generative AI creates content based on existing data, but to help manage fraud, it could be used to construct new fraud rules, or via machine learning, assess the performance of new rules to determine if they are effective. This would reduce manual reviewing efforts and assist in filtering out low risk fraud attempts. Of course, any unbalanced training data could lead to bias which would need to be addressed from the start.
Customer support & social commerce
AI is being widely used by retailers that offer customer support services to deliver insight into consumers and their behaviours. Some are deploying AI-enabled chatbots to provide instant responses to inquiries made via their social media platforms. Expanding customer support to incorporate generative AI will mean access to a broader range of topics and allow AI tools to manage a greater number of interactions, leaving human agents more time to focus on other activities. These interactions could lead to payment transactions such as refunds or additional orders, even with biometric authentication if this can be enabled by the device the customer is using to connect to the retailer.
These are just four examples of the impact that AI is already having on how payment processors are serving the online retail sector. As well as enabling a deeper understanding of customers and their shopping habits, generative AI also has the potential to improve efficiency, process data at a faster rate, deliver real-time insights and ultimately deliver a better customer experience.
Contributor: Ralf Gladis, CEO, Computop