Companies are accelerating their use of artificial intelligence to improve services tied to payments, with Fiserv and Klarna both recently making fresh use of AI.
Klarna, the Swedish payment company that is known for buy now/pay later lending, has added ChatGPT to improve shopping, while Fiserv has introduced an omnichannel fraud prevention bundle that makes use of machine learning to speed up transaction monitoring as payment processing becomes faster.
Fiserv and Klarna join other companies that provide payment technology, such as
Klarna partnered with OpenAI to build a plugin for
At Klarna, consumers "ask" the OpenAI plugin specific questions — something like "what should I get my niece, who loves unicorns, for her birthday?" While consumers are using ChatGPT, Klarna recommends items from its network of about 500,0000 merchants, creating an incentive for those merchants to work with Klarna. Klarna then becomes an option to process those merchant's payments and offer BNPL loans at the point of sale if a consumer needs help to finance the purchase.
Klarna did not provide an executive for an interview. In an email, Klarna's public relations office said ChatGPT would enable merchants to offer a "highly personalized" and intuitive shopping experience by providing curated product recommendations to users who ask the platform for shopping advice, along with links to shop for those products via Klarna's search and comparison tool.
"This announcement is just the first step as we look to bring in AI to more and more of our products and services. In the future you can expect to see and access the benefits of AI within the Klarna app," Klarna's public relations office said.
Other payment firms are considering AI-powered speech technology.
"We're waiting to see how banks and financial institutions use it," said Justin Passalaqua, country director for Worldline in Canada. There is an opportunity to use chatGPT to improve customer service, particularly for automated voice response calls, according to Passalaqua.
Worldline is also considering how chatGPT can support authentication at checkout. The payment processor and technology company is also developing facial recognition technology to help manage identity risk at the point of sale.
Beyond chat, AI in general is improving its ability to process and analyze data, according to Adnan Masood, chief AI architect for UST, an IT services firm. That could help support fraud detection as more payments migrate to real-time or faster processing, Masood said.
"If you can analyze a vast amount of data in real time, you can take proactive measures against fraud," Masood said, adding AI can spot possible departures from a consumers' normal spending trends faster than a human.
AI improves fraud detection by leveraging machine-learning algorithms to analyze transaction data to recognize patterns that suggest fraudulent activity, said Jason Paguandas, vice president and general manager of merchant fraud at Fiserv.
Fiserv has developed an AI tool that links to Carat, the company's global commerce platform. Merchants adjust risk controls on the platform, which triggers the use of AI to vet payments at the point of sale.
"Payment transactions can be monitored and scored in real time, so payment activity that falls outside the norm is identified as suspicious and will be flagged or declined," Paguandas said, adding that merchants have the flexibility to define their risk acceptance level and leverage transaction scoring to determine what payments should be automatically rejected.
"The secret sauce in any AI tool is having enough robust data to strengthen decisioning algorithms," Paguandas said. "The ability to analyze large datasets in real time makes AI an incredibly powerful and effective fraud mitigation tool that helps businesses recognize and prevent activity initiated by fraudulent customers."
The present state of AI, and the emergence of AI-powered technology such as ChatGPT, enables fast answers or access to information, with potential uses for sales staff, risk professionals and end users such as consumers, according to Alenka Grealish, research lead on emerging technology at Celent.
The potential benefit is AI can sift through more data and present intel to the user that's easier to use and understand, she said.
"Right now you have the 'tell me' use cases," Grealish said. "You can ask 'what's the most efficient way to do a foreign exchange transaction? Should I use a credit card or a wire?'"
Newer AI technology, particularly chatGPT, is in its very early stages, according to Grealish, who adds much of the current work is on testing the actual technology to ensure it works.
"It would be great if you could produce a lot of rich information and put in a few bullet points," Grealish said. "Something that provides answers much faster."
