Digital payments are one of the major advancements in the life of a human. In past, we need to go to an ATM to withdraw money and must pay the shopkeeper in cash. But now, just tapping your phone to either another phone or a machine would complete the transaction.
There are many wallets such as Google Pay(Tez), WeChat Pay, Alipay, Apple’s Passbook, PayTm and more to complete the transaction with the merchant by pairing with banks. Even the privacy and safety measures are also taken up to 97%. In November 2017, the Indian Prime Minister, Sri Narendra Modi, has stopped the printing of 1000 rupee note denominations and abolished the usage of the Rs. 1000 note.
The main reason for this to fight the corruption by canceling the biggest denomination in India. During that time, there was a shortage of currency and most banks in India were not supplied with enough currency. This was an advantage to the wallet companies in India and they started to pair and make a transaction with banks with a profit percentage.
Surprisingly, by the end of January 2018, India hit a mark of 2B$ digital transactions.
But from there, the wallets didn’t stop there itself. Many wallets provide unavoidable offers and attract their users. And parallely, the wallets also keep developing themselves. A lot of innovations has occurred in these wallets like introducing machine learning and artificial intelligence to understand the user activities and their transaction methods.
Samsung Pay(only available in some Samsung models) is one best example of wireless payments. This app will take the photo and details of your bank ATM card. And later where ever you go, you don’t need to enter a pin or anything. Facial recognition enabled mobiles phones can use their face unlocking method to complete a payment now.
The Boston Consulting Group report has projected that digital payments in India will reach $500 billion by 2020 and more than 50% of all internet users will be actively using digital payments. Even the companies in India are focusing on using Artificial intelligence for their wallets on different aspects. Most of them are
- Provide personalized digital payment experience
- Assist with fraud detection and risk assessment
AI-based systems can match payments with the customer’s historical data to predict their behavior. If the consumer’s account balance is below the incoming Direct Debit Mandate Amount, the AI engine can prompt the consumer to auto transfer funds from another linked account in-order to honor the mandate. This will allow them to pay their bills on time and avoid fines and penalties.
Jose Thattil, Co-Founder, and CEO of Phi Commerce say, “The areas where AI can make a significant impact include, improved customer experience, more accurate fraud detection, and better analytics. These areas are all so central to the digital payments value proposition that I can only see the role of AI in digital payments growing over the coming years.
This means financial providers that issue Mastercard branded cards will have to provide biometric authentication options alongside traditional PIN and password verification.
The technology will be available for contactless transactions made with mobiles in shops, as well as for transactions made online and on mobile devices.
Mastercard says the introduction of biometric security reduces digital checkout times, improves security and reduces the likelihood of a shopper giving up on a transaction.
Biometrics stand out in security terms as they remove the need to remember passwords or carry particular items, such as card readers.
Many smartphones now have fingerprint technology as standard, and banks such as Clydesdale & Yorkshire Bank already allow users to log in their Bank Account app using fingerprint verification.
Other banks such as HSBC and First Direct have rolled out voice recognition technology, and with the arrival of the iPhone X last year, facial recognition is moving into the mainstream too.
Mark Barnett, president of Mastercard UK and Ireland comments: “Biometric technologies perfectly meet the public’s expectation for state-of-the-art security when making a payment.”
“This will be of great benefit to everyone: consumers, retailers, and banks. It will make the purchase much smoother, and instead of having to remember passwords to authenticate, shoppers will have the chance to use a fingerprint or a picture of themselves.”