There has been much talk of late around artificial intelligence and its growing applications across many use cases in business. In the retail sector, AI is being leveraged in a variety of ways, from demand forecasting to automated inventory management to pricing decisions to optimizing product placement. Another way, perhaps not often considered, is the use of AI in online retail payments.
Following are some ways AI is being applied in this discipline:
Convenient Checkout
Every online retailer aspires to provide customers with a seamless checkout process. Customers must be able to make payments fast, securely and without too many clicks. They rely on payment service providers to make this feasible, and the sector is becoming more competitive based on how well it can integrate AI into user interfaces and experiences. AI can give relevant information that could make the process even more effective by scrutinizing factors like the customer’s location, the device they’re using, their most recent interactions with the retailer, and even the time of day that they’re most likely to make a purchase. Such detailed information not only guarantees a smooth checkout, but also affords merchants the possibility to further customize their offerings.
Fraud Avoidance
One of the biggest contributors to credit card theft in recent years has been the increase in e-commerce “card not present” (CNP) payments. AI and machine learning are already being used by payment processors to evaluate previous data that can be used to block these fraud efforts. Additionally, if an AI model can consistently pick out low-risk fraud signals, merchants can save time and money by minimizing manual review efforts.
Social Commerce
AI-enabled chatbots that are available on social media platforms help retailers by offering quick responses to customer inquiries. There’s no reason why these exchanges couldn’t furthermore lead to transactions like refunds or additional orders, though. When convenient payment systems like Apple Pay or Google Pay complete the purchase, even biometrics like face recognition become part of this efficient process.
Integrated Payment
The majority of retailers today use integrated payment systems to automate and streamline the payment acceptance process. Large language models (LLMs), the type of AI that can imitate human intelligence, can aid in the gathering and analysis of payment data from numerous sources and locations, enabling retail systems to swiftly and precisely find information and compile transaction data.
AI has the potential to drastically improve online retail, including in the payments space. These are just four examples. Retailers that are not taking advantage of this technology are missing out on the significant advantages it offers.
Ralf Gladis is the CEO of Computop, an omnichannel payment platform.
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