How is AI in Payment Processing Projected to Change the Industry?

These days, it's hard to miss seeing news about AI.  For example, everyone has been talking about ChatGPT.  According to Chat GPT, “AI has already started to make significant changes to the payment processing industry, and this trend is only projected to continue in the future.”

 AI (Artificial Intelligence) is already having an impact on our lives, and its effect will only expand in the future. Here are some of the current ways in which AI is influencing our lives: AI personal assistants like Siri, to self-driving cars or individually tailored entertainment experiences like Netflix and Spotify giving recommendations, to employing AI in healthcare to improve medical diagnosis and treatments.

Even payment processing has seen innovations thanks to AI, as it's already used in some cases. But how might that change the way we pay for things? How might it impact merchants who need reliable payment processing? 

Learning more about AI in payment processing can help put your mind at ease about these changes – and prepare you to maximize their positive impact on your business when the time comes!

What Exactly Is AI in Payment Processing?

When you purchase something online, you can input your financial information with just a few clicks. This streamlining is due to the use of AI in payment processing – something that is becoming increasingly common in recent years. What you may not realize is that AI can assign risk scores to every transaction depending on multiple variables including your location, device, and transaction history. Transactions with a high-risk score can be flagged for further investigation. 

While major corporations are using artificial intelligence for as many applications as possible, even smaller businesses have started seeing its benefits in the last few years. Since 2019, the share of small and medium-sized businesses that use AI in payment processing has surpassed 25%. This figure is substantially higher in the United States and other technologically advanced countries. This is important since there is a widespread assumption that only large corporations can benefit from technologies like AI. However, even the smallest businesses can see a boost in many areas by harnessing the power of predictive and "smart" payment processing. 

Overall, AI in payment processing serves to streamline the entire process – and will continue to make things faster, better, and safer for consumers and merchants alike as the technology improves. In the near future, you will likely never see a mid-size or larger company that does not integrate artificial intelligence in its payment processing. 

The Benefits of AI in Payment Processing

Now that you know more about what to expect from AI in payment processing, it's time to consider whether it would benefit your business. As with any new technology, it can be challenging to say whether AI will work for every business's payment processing needs. But the benefits of it are likely to continue to grow over time as the technology becomes more refined- and more commonplace. 

With that said, what are the reasons a merchant might choose to implement AI in payment processing? A few of the most important benefits include the following: 

• Reduces fraud: In the last three years, overall spending has risen much slower than usual. However, online spending growth has climbed much faster – outstripping traditional retail spending by 300%! With such an increase, there has also been an increase in fraud. Thankfully, artificial intelligence is the first line of defense against fraud. For example, AI can analyze user behavior and patterns like keystrokes, mouse movements, and scrolling to create a unique profile for each user. This profile can then be used to identify any unusual behavior and flag it for review. AI can also monitor customer service interactions to detect fraudulent activity like phishing or social engineering attempts. AI makes detecting and rooting out consumer fraud easier and faster than ever – without extra work for merchants. 
• Improves consumer experience: Remember that example from a moment ago about having your financial information ready for you with a few clicks? That is one benefit many consumers cherish. Making sure they have readily available information means they don't have to slow their shopping to input their data. It also means taking advantage of flash sales or hot items that slowing down might cause them to miss. AI can offer a smooth experience for every shopper by predicting consumer behavior and holding onto important data. 
• Makes data gathering simpler: Speaking of holding onto important data, AI makes gathering important information about your consumers simpler than ever. Companies can take stock of who is buying which items, how much they are spending, and their satisfaction level – all in one place. By gathering and helping to organize this information, artificial intelligence makes it easier than ever to tailor products and services to your loyal consumers. 
• Predictive Analytics: AI can be used to analyze customer data to make predictions about future payment trends. This can help companies make more informed decisions about how to manage their payment-processing operations
• Return on investment. Like any technology, AI integration in payment processing is not free. However, the ROI of utilizing this technology can far exceed that of many other payment processing types and customer service technologies. That ROI means that your investment is put to good use and continues to build on its value over time. How many other payment processing technologies can offer that? 

Of course, one of the most significant benefits is that AI can save everyone involved in payment processing time and money. 

Virtual assistance for consumers with questions or concerns regarding billing or other topics can drastically reduce staffing costs. Both operating and human resource expenses can be reduced through this technology, which can then be invested into making other aspects of the customer experience even better. Customers also save time by using the technology's shortcuts and skipping long hold times for customer service calls. For businesses that can utilize AI in payment processing, there are many ways that the technology can create the ideal scenario for merchants and consumers alike.

Stay Ahead of the Curve with Innovative Payment Processing

For merchants who want to stay informed of the constantly-changing world of payment processing, it pays to partner with a processing provider that is not afraid of industry innovation and new technology. At Paystri, our team knows trends and techniques leading the way into the future while also boasting the experience necessary to help you make the most of your investment in our services. Our goal is to help you feel confident and secure in your choices with payment processing, so you can focus on the important business of running your business. 

To learn more about how we are preparing for the changes that AI in payment processing will bring – and how we can help you do the same – contact the team at Paystri today!