How Will AI Affect the Payment Industry?

The integration of AI tools in payment processing offers several advantages, read our article to see some of the ways AI is being used within the payment industry.
Artificial Intelligence in the workplace

What do you think of when you hear the term ‘Artificial Intelligence’? Do you think of robots taking over the world? Terminator becoming real? Jobs being replaced? Fake news, deepfakes and media? Job losses or replacements?  To the layman, AI can be scary and feel like too much change. What if computers become smarter than humans and take over? Perhaps you have used ChatGPT or Dal-E, and you’re well versed in AI and already embrace it as part of your daily life or business. It can be an incredible tool if used correctly.

It is only natural to feel afraid of the risks and to have concerns over what AI means for our existence. In 2023 US and China, backed a UK deal to collaborate on the need to manage the potentially “catastrophic” dangers it could pose. The world’s leading AI powers were among 28 nations to agree to the UK’s Bletchley Declaration, which stresses the need for countries to work together to harness the technology’s potential while keeping people safe.

AI has been a part of the payment industry since the early 2000s and was mainly used as part of fraud detection and payment security. Algorithms were used to analyse patterns to detect unusual activities and anomalies that could indicate fraudulent activity. Then in the 2010s we saw the introduction of biometrics to further enhance security and fraud prevention. During this period AI was also used to start analysing customer behaviour and payment data to enable businesses to make predictions, business forecasts and to tailor personalised ads and offers.

In the late 2010s and early 2020s up to the present-day AI is being integrated into the payment industry even further. You will find AI being used for credit scoring, risk management, and real-time analytics.

“The payments industry evolves in waves,” says Tony Craddock, Director General of trade group The Payments Association. And with the introduction of AI he commented “It is going to be a bigger wave than we’ve seen before.” See our blog about the history of card payments to see just how far we have come.

The integration of AI tools in payment processing offers several advantages, here are some of the ways AI is being used within the payment industry:

Fraud detection and prevention

  • AI uses algorithms to analyse large volumes of transaction data, user behaviour and patterns to identify anomalies that may indicate fraudulent activities. Real-time monitoring allows for quick detection and response to suspicious transactions.

Biometric Authentication and Voice Recognition

  • AI uses biometric authentication methods, such as fingerprint and facial recognition, for secure and convenient user identification during payment transactions.
  • AI-powered voice recognition is utilised for voice-activated payments, adding an additional layer of security.

Tailored and personalised customer experiences – Analyses customer trends and data

  • AI can analyse customer data to understand spending habits, preferences, and behaviours. This information is used to offer personalised products, discounts, and allow businesses to create targeted marketing campaigns, enhancing the overall customer experience.

Advanced customer service and support

  • Chatbots and virtual assistants powered by AI can provide customer support, answer customer queries, assist with transactions, and even help in resolving disputes. This improves the efficiency and accessibility of customer services.

Better at assessing risk and fraud with more advanced credit checks.

  • AI-powered algorithms assess credit risk by considering a broader range of data points. This leads to more accurate credit scoring and helps financial institutions make informed lending decisions.
  • AI models predict potential risks and identify customers at a higher risk of default, enabling proactive risk management strategies.

Automated transactions

  • AI automates back-office processes, such as transaction reconciliation and invoice processing, reducing manual errors and improving efficiency.
  • AI assists in ensuring that payment transactions comply with regulatory requirements, automating compliance checks and reducing the risk of regulatory breaches.

Real-time analysis of business data – helping businesses make better decisions.

  • AI-driven real-time analytics allows businesses to implement dynamic pricing strategies, adjusting prices based on demand, market trends, and customer behaviour.
  • Real-time analytics enable rapid decision-making in response to market changes, potential fraud, or other critical events.

How do employers feel about AI being integrated into the workplace?

Employees were initially focused and worried about the loss of jobs, being replaced by AI and worried about the future of certain industries and how it will affect workers and their employment security. A survey conducted by 3GEM on behalf of Snaplogic found that employees are no longer focused on job replacement.  Seeing AI in action has helped them to see how much it can assist them in the workplace. 81% of employees think that AI improves their overall performance at work and 89% of employees believe AI could support them in up to half of their workload.


AI has been integrated into our lives and payment systems smoothly over the last couple of decades and has given us the efficiency and benefits we’ve all become used to and expect from businesses. From the ease of use of transactions for the customer to creating a more secure, more efficient system for businesses. Embracing new technology and staying informed will help you and your business to make the correct decisions about how to embrace AI to benefit you, your team and your customers.

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