How AI is Transforming the Future of Digital Payments in India
Sunil is a multi dimensional revolutionary leader who has two decades of experience in sales and distribution. His pragmatic approach and appetite for challenging opportunity has enabled him to work for prominent companies such Max New York Life Insurance in his illustrious career, and recipient of the Young Digital Person of the Year award in 2019.
Leaders in the financial services industry are aware that digital payments are the future of their industry. Consumers and merchants are increasingly using digital tools to buy and sell, and leading companies are entering the digital payments space. For many technology players, the digital payments space is the next frontier. Such companies have considerable expertise in technologies like AI. Budding and existing players in the digital payments arena are using their knowledge of AI to deliver secure, safe, and seamless payment experiences.
Artificial Intelligence(AI)is transforming India’s digital payment infrastructure. It is making digital transactions secure, facilitating superior customer service. And it is being integrated with existing financial platforms to serve customers better.
A few factors behind consumers adopting digital payments are as follows:
Outstanding Digital Infrastructure
In India, digital infrastructure is considerably superior to what it was just five years ago. Five years ago, internet penetration was relatively poor. Fast forward to today and smartphones are ubiquitous, and the internet has penetrated every corner of the country. Approximately 35 Crores Indians to day use smartphones. Most of these users regularly use the internet and avail a variety of services online. One service popular among a growing number of Indians is digital payments.
Several factors like easy and cheap internet access, affordable smartphones, growing popularity of
e-commerce sites, and government initiatives have created a behavioural change in society. Digital payments which once intimidated many have become a part of everyday life. Consumers are happy to pay using digital wallets while businesses are comfortable receiving payments digitally. The reasons for this shift are not too difficult to understand.
Digital payments are quick and easy. Also, consumers have grown accustomed to
buying products online; many Smartphone users don't think twice about paying digitally for products on e-commerce sites.
As digital transactions grow in popularity, embedded AI in digital payment systems is proving essential. AI is necessary for the digital payments industry for many reasons.
Consumers and merchants are increasingly using digital tools to buy and sell, and leading companies are entering the digital payments space
Secure Online Transactions
A significant proportion of Indian consumers were uncomfortable sharing their card details online during the early part of the last decade. Today they have confidence in online transactions, yet concerns about data privacy and theft have made a comeback. AI is imperative in the fight to make online transactions completely secure.
Today Juniper Research believes that the digital payments industry will invest more than any other sector in fraud detection and prevention. The results of Juniper Research’s study are not surprising because more and more people are paying digitally today. Keeping their data secure will play a crucial part in expanding the size of the digital payments industry.
AI is helping in this fight by alerting banks when suspicious transactions come to its attention. Perhaps the most significant scope of AI in fraud detection and prevention comes from the fact that it can learn from the past data. Using data from the past, it is predicting the future. Hence sophisticated AI systems are thwarting fraudsters before they perpetrate theft. On digital payment systems embedded with powerful AI, every transaction is genuine and fruitful.
Customer Support is Vital in Digital Realms
In addition to fighting fraud, AI is being used to serve customers better. Chatbots are the most visible example of such support. Customers of digital payment service providers have the opportunity to chat with bots in a natural language. Such chatbots can resolve most if not all queries. Their use by digital payment platforms allows them to give customers an unparalleled quality of service.
A Digital Transformation Aided by AI
The digital transformation of the Indian economy is underway. Retailers and financial service providers increasingly offer services digitally. Online banking and mobile payments are commonplace. AI-powered chatbots are being integrated with mobile banking applications and, according to Juniper Research bots will comprise nearly 80% of all successful integrations by 2023.
In the west, Bank of America’s virtual assistant called “Erika” served over 1 million people in three months in 2018. It let users navigate online, answered their queries, and helped them manage their finances.
The scope of the digital payments industry becomes apparent when it is known that the sector is attracting players that don’t have any history in the financial services domain. Players like Apple and Walmart with expertise in technology and retail have entered the digital payments industry using Apple Pay and Walmart Pay. Banking giants like Goldman Sachs are launching initiatives to encourage startups to solve new payment challenges. The entry of such formidable players in the digital payments industry means the industry is ripe for disruption. AI will drive a key component of such disruption.
For several players, the digital payments industry is the final frontier, and rightly so, the industry is poised for massive growth. AI will ensure that the sector reaches its fullest potential.