AI integration is revolutionizing the payment sector
In the dynamic world of payments, Artificial Intelligence (AI) is becoming an integral part of the industry's evolution. From fraud detection to customer service, process automation, and behavioural insights, AI is reshaping the payment landscape, particularly in the US and Europe.
Many payment companies are adopting AI to determine credit risk and prevent fraud. PayPal, for instance, uses AI to analyze customer behaviour and personalize advertising, while payment service providers like Ixopay, Otto Payments, Ratepay, and VR Payment leverage Hawk AI's AI tool for transaction monitoring.
In the areas of Know Your Customer (KYC) and onboarding, Lemonway, Mastercard, Monei, Riverty, Scalapay, and Treezor are using AI. AI is also transforming Accounts Payable (AP) processes by automating bookkeeping tasks, reducing errors, and improving financial forecasting. This is particularly important for corporate payments and is growing rapidly.
Beyond fraud detection, AI applications in the payment industry include chatbots for customer support and AI-driven personalization to improve the payment journey and user engagement. AI monitors user transaction behaviour over time, correlating signals across onboarding, transactions, and historical context to detect not only fraud but also improve operational efficiencies and user trust with dynamic risk profiling.
The European Central Bank reported 72 billion cashless payment transactions in the Eurozone in the first half of 2024, with a total value of around 113 trillion euros. This shift towards digital payments is driving the adoption of AI in the industry.
US companies, particularly Visa and American Express, are leading the way in exploring AI for various business areas beyond fraud detection. Visa uses AI for customer data analysis, cybersecurity, software development, and dispute resolution processes, while American Express leverages AI for market data analysis, pricing strategies, product development, market expansion, and personalized customer offers.
Klarna, a leading payment service provider, has implemented an internal AI assistant named Kiki, based on OpenAI's language models, to support employees in communication, marketing, and the legal department. KI sets individual contracts for the latter. The company has also replaced some employees with AI for analysing customer behaviour.
Mastercard and Visa have acquired AI providers Recorded Future and Featurespace for fraud prevention purposes. Meanwhile, Qonto has developed its own AI that assists in recruitment by writing job ads and transcribing and analyzing job interviews.
Payback and Rakuten are optimizing their marketing campaigns with the help of AI, and companies like Axytos, Deutsche Firmenkredit Partner (DFKP), Monei, and Stripe are using AI to determine who is shown which payment or credit options at checkout.
The author of this article, Sophie Deistler, is a freelance journalist who specializes in topics from the financial world. She holds a master's degree in socioeconomics from the University of Duisburg-Essen and a bachelor's degree in social sciences from the University of Cologne. She has completed a journalism training at the Cologne Journalism School.
As AI continues to evolve, its applications in the payment industry are expected to grow, offering more personalized and efficient services to users while improving operational efficiencies for payment providers.
[1] Source: https://unsere Website‐URL/hier-setzen-banken-und-fintechs-heute-schon-ki-ein/ [3] Source: https://unsere Website‐URL/ai-transformiert-ap-prozesse-von-unserem-kunden/ [4] Source: https://unsere Website‐URL/ai-beyond-fraud-detection-in-payment-industry/
Payments technology is witnessing significant advancements with the integration of Artificial Intelligence (AI), as many payment companies, such as PayPal and Ixopay, are adopting AI for credit risk determination, transaction monitoring, and personalized advertising.
Beyond fraud detection and customer service, AI is transforming Accounts Payable (AP) processes, automating bookkeeping tasks, reducing errors, and improving financial forecasting, making it particularly important for corporate payments.
