Payments Automation: The Way Ahead

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AI and machine learning have transformed the payments and online payment gateway industry, providing customers with more options for completing transactions. Let's take a look at where we're going in the rapidly changing payment environment as customers become more accustomed to using automated payment systems.

Even before the fear of COVID-19 made consumers reluctant to use banknotes, digital payment options such as chip-and-PIN and online transactions were booming. Increased online purchasing has also wreaked havoc on traditional currencies, and despite the fact that the world has opened up, the numbers continue to fall.

To keep up with changing dynamics, businesses must integrate digital payments and related services. As a result, CFOs' top priorities today include payment digitization and B2B payments automation.

The Decline of Traditional Payment Methods
The role of physical money is gradually diminishing, allowing everyone to adjust accordingly. By 2025, traditional payment methods such as credit cards and cash-on-delivery are expected to account for less than a third of total global E-commerce ...
... transaction value. In fact, cash is expected to decline from 17.9% ($8.3 trillion) of global POS transaction value in 2021 to 9.8% ($5.8 trillion) by 2025.

Financial technology companies are capitalizing on this shift by coming up with ever-more inventive ways to help organizations do business through digital payment solutions. From voice recognition biometrics to blockchain technology and seamless Amazon store payments, automation is at the heart of this massive transition.

Technology Drivers in Payment Automation
Automation advancement in PayTech is heavily reliant on AI and machine learning. When used for transaction monitoring and screening, it can handle requests at scale and speed, and it is more efficient than other methods at significantly reducing error.

It has also accelerated how companies acquire customers by onboarding them in less than two minutes. FinTechs can use KYC providers, specialized screening, and geolocation technologies to verify, process, and conduct client risk assessments in real time.

Automation has also aided FinTechs in connecting to payment networks. Because of open banking, FinTechs can plug in and play with various APIs within a single automated, secure process. Information is exchanged in real time between multiple financial providers and intermediaries, allowing the user to benefit from a variety of benefits, most notably fast and secure payments.

AI in the payments industry can improve customer service by providing hyper-personalized credit scores and offers. It may also result in new types of transactions; for example, we've already seen retail outlets without cashiers where customers can simply 'grab and go.'
It is also responsible for significant advances in payment orchestration, billing optimization, and the customer identification and verification process, which employs multiple data sources. AI can help with fraud detection, payment optimization, credit scoring, monitoring, and alerting.

Simplifying Business Buying Processes
Payment automation is the logical solution to what would otherwise be a labor-intensive and time-consuming procedure. Payments may become increasingly invisible as we move to more "ambient" forms of commerce, such as the recent rise of till-less grocery stores. This will have progressed to the point where no cards or payment devices will be used by 2030.

Instead, cameras would collect a person's biometric data, along with the item they're purchasing, and send it directly to their bank. Future versions of ambient commerce will incorporate facial recognition as well as AI-based decision-making. According to experts, given how quickly Uber and other similar services have become the norm, the convenience will win people over. In fact, 51% of those polled said they would consider using contactless microchip implantation to make payments.

What Does the Payment Landscape Look Like in the Future?
In comparison to just a decade ago, the best online payment gateway world has already become unrecognizable. Future innovations will be motivated primarily by necessity, rather than innovation for the sake of innovation.

With increased cross-border trade, particularly when supply chain concerns arise, the PayTech space will be flooded with new technologies that are not currently available. Suppliers must be paid more quickly and electronically, with greater transparency.

Payments must be made as soon as possible to avoid currency fluctuations and to alleviate suppliers' concerns about lengthy settlement timeframes.
Because processes would be fundamentally efficient, the concept of automation would be obsolete. Blockchain and open finance initiatives will become mainstream, acting as conduits for data analytics to improve transaction act and security.

Parting thoughts
According to a recent survey, the way we pay our bills and buy everything we need, will be very different in a decade. According to the survey, 31% of 18-24-year-old respondents had no problem with AI making automatic decisions on their behalf to find the most ethical way to pay. Debit and credit cards, as well as convenient mobile payment apps, will almost certainly become obsolete in the near future.

Given the volume of transactions that payment processors now handle, manual processing is no longer a viable option. This shift was unavoidable, even though the pandemic hastened it.