This article written by Blair Thomas, co-founded eMerchantBroker for PointofSale.com reviews the AI landscape and suggests that AI will have a particularly profound impact on high-risk merchant processing:
“Companies like Google and Tesla are engaged in an arms race to control the future of AI. Not only is this new frontier the engine that will drive their respective companies, it’s changing the face of almost every industry—including the payments ecosystem.
In the years since I co-founded eMerchantBroker we’ve seen this nascent technology start to affect all parts of the payments chain. Huge investments are being made in developing the different aspects of AI to optimize how we do everything from exchange payments to detect fraud to support our customers.
The next few years will see an acceleration in developments that will alter how payment companies large and small operate their businesses. Some will be left behind. Others, those at the leading edge of the wave, will separate themselves from their competitors and emerge as industry leaders.
This is especially true in the high-risk merchant processing side of the industry, where the potential for fraud and high levels of chargebacks is rampant. Those high-risk merchants who take advantage of the growing suite of AI driven tools to reduce risk while providing a better customer experience are the ones who will thrive.
Investment in AI is growing every year
According to a CB Insights annual AI funding report, funding in AI start-ups increased from just under $600 million in 2012 to $5.021 billion in 2016. This tremendous growth is spurred by the promise for radical change that AI brings to most industries—including the payments industry. It has the potential to streamline the payment chain, reduce fraud, improve customer service and optimize risk assessment—all key success criteria for companies in the high-risk merchant space.”
As someone that has been following the effort to build machines that mimic human intelligence for 40+ years I tend to bristle at the term AI since we have a long ways to go before achieving that goal. So for example, while we may be able to create software savants that can beat humans at Jeaprody and Go, we remain at least a decade away from mimicking the skills of a retail salesperson (which is still domain restrained) according to this article in the MIT Technology Review. Software savants are already impacting every industry, but I wish we’d stop calling these savants Artificial Intelligence.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group