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Guzide Koksal, Head of Processing, Open Banking & RTP Solutions at Visa CEMEA

October 2022

 

3 - 4 Minutes

How AI Unlocks Intelligent Payments at Scale

Businesses and consumers are already benefiting from data-driven platforms that enhance payment system capabilities.

Convenience has long been a driving force for innovation. Checks and card receipts streamlined back-office operations and helped merchants understand the spending habits of their customers. ‘How to buy’ went hand in hand with ‘what to buy’ as payment systems integrated new technologies to keep pace with consumer demand and business needs. While consumers benefit from these retail payment innovations, the outlook for businesses is also improving.

Role of Artificial Intelligence (AI) in digital payments

The four key areas driving today’s digital payment systems are: security, speed, personalization, and behavior. In today’s competitive consumer environment, what links these crucial elements is, increasingly, Artificial Intelligence (AI).

Digital payment products and platforms that utilize AI have exploded in growth over a few short years. Along with ML (machine learning), AI is a critical feature of any data-driven system, which can be used by banks and other financial institutions for seamless and secure payment experiences. Globally, 70% of all financial services firms are using machine learning to predict cash flow, detect fraud and analyze credit scores.1

Benefits of AI

One of the core benefits of AI is its predictive ability. By assessing, analyzing and modeling huge volumes of behavioral data, for example, AI-powered platforms can deliver highly specific insights about spending patterns and trends. In turn, this data can help banks and financial institutions to better tailor their products and services, simultaneously generating greater profits, reducing operating costs, and improving B2C relationships.

On the other side of the ‘check-out counter’, AI is helping to solve problems that have long frustrated consumers. Delays with transaction processing and authorization, combined with the subsequent lag-time in updating account balances, are common pain points for customers, who have come to expect real-time visibility and transparency in today’s hyper-speed, digital environment.

AI’s predictive modeling abilities have led to the creation of processing and settlement products that can clear a myriad of bottlenecks. With AI-driven services, transaction authorizations can be completed even during issuer outages or maintenance downtimes. Clearing times can also be shortened through predictive modeling, which means customers receive timely notifications, alerts and balance updates.

VisaNet +AI

The VisaNet +AI suite of services, including Smarter Posting and Smarter Stand-In Processing (STP) – is transforming the way payments are made every day, reducing the consumer impact of service disruptions and bridging the time-gap between payment authorization and transaction clearing.

Smarter STP, which uses real-time AI to aid financial institutions in their bid to manage transaction authorizations when service disruptions occur, has been embraced by more than 500 issuers since launch and has been decisioned more than 5 million transactions to date.2

For many years, AI has been a foundational tool in the area of security and fraud protection. Billions of potentially fraudulent transactions are flagged each year through machine learning, saving businesses and customers from untold financial loss and worry. AI-powered systems regularly identify, investigate, disrupt and prevent attacks that target the global payment ecosystem.

With billions of transactions ticking over each day around the world, the volume of data to process and protect is monumental. Innovative AI systems can harness that data in a manner that benefits individuals, businesses and economies.

The future of AI

Businesses and consumers will forever be on the move, searching for the next wave in payment systems and never looking back. In the next few years, or even decades, the combination of technology, customer service, and the spirit of invention continue to guide the payment experience.

AI and ML will be integral to this ongoing evolution as businesses strive to future-proof their systems. But, even with the might of AI and ML, the new Data Age still requires some old-school virtues: keep learning, keep problem-solving, keep searching for ways to improve.

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

1The Payments Association, Using AI Intelligently: Smart ways to use Artificial Intelligence in Payments 2021, https://thepaymentsassociation.org/wp-content/uploads/sites/7/2021/11/Using-AI-Intelligently-Smart-ways-to-use-Artificial-Intelligence-in-Payments.pdf
2Visa Using AI to Eliminate Pending Charges, PYMNTS, 19 May 2022, https://www.pymnts.com/news/banking/2022/visa-uses-ai-to-help-banks-eliminate-pending-charges/

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