According to Paysafe, the global payments platform, addressing consumer awareness and comfort is crucial to unlocking the immense potential of artificial intelligence (AI) in the payments space. While AI often receives negative criticism, being accused of job replacement and associated with the fictional Skynet from The Terminator franchise, Paysafe believes that the technology can bring significant benefits.
In its latest research, Paysafe found that an overwhelming majority (86 per cent) of consumers held reservations about the use of AI payments. Only 14 per cent of consumers across the globe are currently using AI-driven payments technology, and while there is a willingness among consumers to use the technology (10 per cent), 17 per cent of consumers are not willing at all.
Fear of AI payments
However, when uncovering the reasons for this hesitation, Paysafe found that a lack of knowledge about the technology was a barrier to its adoption. Twenty-four per cent cited a lack of knowledge of which safeguards are in place to protect them from data misuse as their major reason for not trusting AI. Meanwhile, 35 per cent said they simply don’t know enough about the tech to feel comfortable using it.
Some consumers were able to identify their use of real-life examples like AI-powered checkouts (26 per cent), smart wallets (32 per cent), or payment chatbots (31 per cent). When asked how aware they were about the use of AI by merchants, approximately one-third of consumers indicated that they know a fair amount or a lot about applications. For example:
- Fraud detection (35 per cent)
- Customer risk scoring (33 per cent)
- Consumer trends (36 per cent)
- Personalising the payment experience (36 per cent).
Rob Gatto, chief revenue officer at Paysafe, commented: “With the very immediate and significant impact of AI that we’ve seen in recent months, it’s understandable that consumers would have concerns about using such technology at the checkout.
“To encourage wider adoption, it is crucial to increase consumer awareness and understanding of AI-driven payment technologies and how they work. Payment service providers and merchants will need to educate users about the benefits of AI-driven payments, such as smoother experiences, convenience and security, in order to break down those barriers. To ensure effectiveness, it is crucial to address privacy and security concerns directly and to enhance consumer recognition of AI being utilized for risk-scoring, fraud detection, and personalisation.”
Other alternative payments
Comfort when using tech is crucial. If a consumer doesn’t understand it, then it has little chance of survival – especially if they can’t trust it. Augmented reality (AR) and virtual reality (VR) payments have also taken off at the same time as AI payments. However, they appear to be more popular than AI payments due to the understanding consumers have of them.
While uptake is low at three per cent, only 12 per cent of consumers say they wouldn’t use AR or VR to purchase goods due to security concerns. In fact, the more widely available the technologies become, consumers said they could see themselves using VR (27 per cent) and AR (28 per cent). Similarly, just over a quarter of respondents (26 per cent) felt the same about paying for something in the metaverse.
Gatto added: “When it comes to AR and VR payments, consumer awareness and comfort seems far less of a barrier to adoption. With the tech giants placing such significant focus on this area and new headset launches emerging in the market, we could see a rapid rise in mixed reality commerce once the technology is more widely available.”
Image and article originally from thefintechtimes.com. Read the original article here.