AI payment usage expanded a staggering 1,170% year-on-year from 2022 to 2023, as reported by leading companies.
The payments industry is witnessing a significant shift as generative AI takes centre stage, according to a recent report by an unnamed platform. The report, published today, analyses mentions of AI across major payments companies' earnings calls to assess the significance of AI to the payments industry.
The frequency of AI mentions increased by an impressive 1,170% year-over-year between 2022 and 2023. Generative AI, in particular, saw the biggest uptick, with no mentions at all prior to 2023, but 75% of companies discussing it in 2023, mostly in Q4. This suggests that generative AI will be a primary focus for future initiatives.
The report does not provide data on the frequency of AI mentions in 2024, but the year is expected to be crucial in determining the extent to which AI remains a key focus for companies and investors in the payments industry.
Companies in payments processing mentioned AI the most frequently. PayPal mentioned AI the most, with a combined total of 29 mentions across all four earnings calls in 2023. Mastercard came in second, followed closely by Visa. Square and Cash App owner Block came in joint fourth with payments processor Worldline in AI mentions.
The applications of AI in the payments industry are trending towards future projects, with a focus on productivity and cost gains. The report highlights that AI is largely being used for fraud protection and risk management, customer service and experience improvements, and productivity or cost gains.
Generative AI is being leveraged to create personalized marketing content, tailor payment plans, enhance customer interactions, and drive innovation in payment services, improving customer retention and satisfaction. It automates customer service through chatbots, boosts internal productivity by assisting advisors with research and reporting, and improves compliance processes by automating regulatory documentation and risk analysis.
The intrinsic synergy of generative AI with blockchain and decentralized finance (DeFi) opens avenues for secure, real-time risk monitoring, smart contract automation, and compliance governance, which enhances transparency and security in payment ecosystems.
Lucy Ingham, Editor-in-Chief and Head of Content, stated that payments companies are showing increasing interest in leveraging AI to support the development of better products, increased productivity, and improved security measures. However, the report does not discuss whether the interest in AI is a temporary trend or a long-term focus for the payments industry.
In summary, the trend in the payments sector shows a strong and growing adoption of generative AI, especially highlighted during 2023 earnings calls of major payments companies. The technology offers tangible business benefits, from personalized customer engagement and operational automation to novel service models and enhanced security, making it a practical and transformative tool rather than just a novelty.
Technology, particularly artificial-intelligence (AI), is the primary focus for future initiatives in the payments industry, as evidenced by the significant increase in AI mentions in earnings calls, with generative AI seeing the biggest uptick. (From the second sentence of the last paragraph)
The growing interest in AI among payments companies is not just a novelty, but a practical and transformative tool, offering benefits such as personalized customer engagement, operational automation, and enhanced security. (From the last sentence of the last paragraph)
