How AI Improves Online Payments

Shopping online has become more and more popular for consumers, especially during the pandemic. With online shopping, customers cannot only buy necessities but also enjoy shopping at home. And the quick shipping speed and free return policy also make the shopping experience more reasonable and enjoyable. 

To provide a better online shopping experience, AI plays an important role in improving online payments. In brief, the use of AI in online payments serves consumers who need to pay. The purpose of AI applications is to provide an easier, safer, and more enjoyable payment process, thus encouraging online shopping.  

The following article introduces four primary ways AI improves online payments.  

Easier to Pay 

The primary use of AI is to take over simple, boring, and repetitive work from human beings. When it comes to online paying, the last thing consumers would like to do is filling out all kinds of information. Most of you may have the same feeling: it is really annoying when you need to fill out your card information, shipping address, and billing address over and over again, and this actually detracts from the experience of online shopping.  

Thankfully, AI helped consumers to break this bottleneck. With AI-based software, online payment platforms can remember your information, such as card numbers and addresses, and then automatically fill them out. For consumers, there is nothing more welcomed than placing your order with only one click.  

Moreover, facial recognition is another way that AI makes online payment easier to operate. Facial recognition payment is a new online payment method that is powered by AI, machine vision, 3D sensing, and Big Data. It creates a more convenient and safer way of placing orders online and provides a better consumer experience. 

Nowadays, facial recognition payment has become extremely popular in China. For instance, Alipay is one of the most popular third-party payment platforms in China. With the help of facial recognition, it remembers users’ card information and bank account and updates all the information with users’ biological information. With Alipay and its facial recognition payment, the platform makes digital payments and digital transactions easier and safer.  

Better Information Security—Two-factor Authorization 

Information security and data privacy are vital for the online payment system. Once information is leaked, there is a huge threat to users’ financial security. However, the Two-factor Authorization (2FA) helps to solve this problem. 

2FA works as an extra layer of protection for users’ online data or account information. In addition to the user name and password, 2FA asks for further personal information to make a double-check. The usual types of 2FA include: 

  • Answering questions
  • Push authorization on the user’s devices
  • Time-based One-Time Passcode (TOTP) via messages, voice mails, or emails 
  • One-Time Passcode (OTP) via messages, voice mails, or emails 

Also using Alipay as an example, when users who haven’t used their account for a long time need to sign in again, except filling out the usernames and passcodes, Alipay will send a time-based one-time passcode to the users’ devices and use the code as a two-factor authorization check. 

To know more details about two-factor authorization or how AI protects informational privacy, check out this AITJ article, AI Ethics: the Importance of Data Privacy and Protection. 

Identify Fraudulent from Transaction

To protect the consumers’ financial security, AI-based software benefits online payment from not only data privacy but also fraud detection.  AI-powered algorithms can collect a variety of data from online payments and transactions, learning the patterns from previous fraud cases, analyzing real-time payments and transactions, and giving a “pass” or “fail” decision.

For example, NoFraud is an AI-powered software that collaborates with online payment platforms. It provides real-time fraud screenings and data-driven solutions to protect its users from being hurt by fraud. NoFraud promises: 

  • Prevent unpredictable fraud costs by detecting fraudulent orders and giving “pass” or “fail” decisions for online payments and transactions.  
  • Help to develop smarter insight with 24/7 customer service 
  • Identifying trustful orders and improving the order rate

Better Customer Experience

Customer experience is a core part of all kinds of consuming activities, whether it is in-store shopping or online shopping. For many people, shopping is a form of entertainment that allows them to relax and have fun. They enjoy the process of viewing a wide variety of goods, trying them on, and finding the most suitable products. Even though it is time-consuming, consumers will have fun with the process. 

However, no one wants to waste their time on paying. For consumers, the paying process should be as simple and quick as possible. Thanks to AI-based software, digital shopping is getting easier, quicker, and more secure

Contributor

Yifei Zhao graduated from New York University with a Master’s degree in Media, Culture, and Communication. She is passionate about content writing and helping to build partnerships to promote how AI brings benefits and interacts with human society.

About Yifei Zhao

Contributor Yifei Zhao graduated from New York University with a Master's degree in Media, Culture, and Communication. She is passionate about content writing and helping to build partnerships to promote how AI brings benefits and interacts with human society.

View all posts by Yifei Zhao →