6 chatbot payment innovations

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As chat technology advances, making a purchase could be as easy as typing "Buy, Robot." Several banks and fintech companies are developing ways to advance chatbots for commerce and customer service.

PayPal and Slack

PayPal recently unveiled its first chatbot, which runs on Slack, a chat platform used in offices. By focusing on P-to-P use cases in a business setting, PayPal's strategy somewhat echoes the beginnings of the hugely popular Starbucks payment app in 2009. In the Starbucks app's early days, it focused on selling to office workers picking up their morning coffee on the way to work. This meant prioritizing development for BlackBerry handsets — still a staple of office life at the time — over the common Android platform.

Say it in French

Chatbots are a global phenomenon. Before PayPal came to Slack, its French rival, Lydia, was already there. Users validate payments through a separate Lydia app or, if they don't have the app, can open up a web page to do the same. Lydia launched its Slack bot in April of 2016, and boasts that it is the first to have a payment bot on the chat platform.

Savvier Spending

Account alerts are nothing new, but using chatbot technology can provide a more useful level of detail. Zor Gorelov, CEO and co-founder of chat tech developer Kasisto, says the company is piloting such a system with RBC and is used by digibank, a mobile-only bank launched in India by DBS Bank in Singapore. “If you send me a notification that says my balance is low, that does not drive engagement,” Gorelov said. “But if you send me a notification that says, ‘You spent $200 in taxis this month, would you like to see your transactions?’ that brings people back and engages them and gives them a better understanding of their money.”

Easing into the payment

Chatbots can be used to help transition customers from free trials to paid services. Personetics has built a library of customer insights for its chatbots with this in mind. For instance, one might automatically inform a customer when a 30-day free subscription offer turns into a paid subscription.

The chatbot technology has been fed financial services information for five years, according to Eran Livneh, vice president of Personetics. In other words, the chatbot is akin to an employee who understands banking and serving customers really well, he said. “If this month you spent more on dining out than you usually do, we may point it out,” Livneh said. “That creates trust and engagement."

Gamified

North Side, a software company based in Montreal, specializes in giving its chatbot, VerbalAccess, a precise understanding of language, whether spoken or typed, through natural language processing technology. Originally it created a video game that lets players communicate with characters to command them to do things and to master the game.

“That’s how we made our natural language understanding pipeline robust,” said Eugene Joseph, North Side's CEO. North Side doesn’t try to glean insights from analyzing customer behavior. Instead, it takes commands and acts on them, such making a payment or displaying a transaction.

If a user asks, “What have I spent on coffee in the last month?” North Side’s chatbot will understand the question and translate it to an API call that will extract the answer automatically. “We’ve invested $20 million in being able to do things like that,” Joseph said.

Facebook meets finance

Facebook, which hired former PayPal President David Marcus in 2014 to run Messenger, has been gradually increasing Messenger’s payment capabilities. That includes a person to person feature and transaction collaboration with Uber. Other companies, such as PayPal’s Venmo and Snap Inc.'s Snapchat are also pairing social networking and payments.