How is AI playing cupid in the digital payments space?

Artificial Intelligence is being used widely in banks, and has been seen as a blessing by the fintech players and payment providers that would help customers in online purchases during social distancing, and also facilitating people in not leaving their houses.

Worldline India is a transactions facilitator in all spectrums of the digital payments ecosystem and provides services and solutions that are fully compliant with PCI and Reserve Bank of India guidelines, along the full length and breadth of the payments value chain.

The main areas of business in the digital payments ecosystem are POS Merchant Acquiring, Card Issuance, EMI Solutions for Non-Bank Finance Companies (NBFCs), Loyalty solutions for petroleum companies, Internet Payment Gateway (IPG), end-to-end NETC solutions from both the issuance and acquiring sides (FASTags), Risk Mitigation, NCMC solutions and other Value Added Services

Venkat Sriramagiri, Chief Operating Officer, Worldline India gives us a clear understanding of his business.

Payment ecosystem in India continues to undergo major transformation with strong government push for digital payments, innovation driven by size of the market and the new-normal created by COVID-19 situation. All this makes technology the most critical enabler for faster, secure and transparent payment processing. Some of the key benefits that payment ecosystem can derive through emerging technologies are as follows:

  • Cloud: It significantly improves time to market for new ideas, reduces upfront investments and helps in scaling up business faster.
  • Artificial Intelligence: Huge transaction volumes help to build sophisticated models and drive business decisions based on AI. Effective Fraud and Risk Management, personalized services, marketing and resolving consumer queries through chat bots are being applied widely by corporates.
  • Blockchain:  It drives collaborative economy, improves security and reduces spends on reconciliation and disputes.

What is the role of artificial intelligence in changing the face of digital payments?

Innovation in AI technologies has simplified the use of machine learning. It is becoming a valuable tool for improving decision making process as the outcome is more accurate and fast as compared with manual efforts. Platforms like IBM Watson, Azure Machine Learning or Google Prediction APIs have enhanced the adoption of AI technology in several areas as they are easy to use even for users who do not have a deeper understanding of complex AI algorithms.

Today, programing languages like Python/R have inbuilt libraries with Machine Learning (ML) algorithms that has enabled development of BOTs a lot easier. In payments arena, AI can be effectively used for fraud and risk management, personalised services through Chatbots and dispute management etc.

Would leveraging the combination of Artificial intelligence & IOT help in rebooting businesses?

IOT allows any device to connect to internet, which means that in future, any device can initiate or accept payments. For consumers, their TV, smart watch, etc. will be able to initiate digital payments both online and on-location, and some will be able to accept payment as well. Merchants can connect to customers anywhere through digital advertisement or a vending machine etc., making it easier to initiate impulse purchases and a more seamless payment experience.

How would the use of block chain ensure that the data is not stolen or tampered while transacting?

Blockchain data is secured through cryptography. Network participants have their own private keys that are assigned to the transactions they make and act as a personal digital signature. If a record is altered, the signature will become invalid and the peer network will know right away that something has happened. In India, NPCI launched Blockchain based Vaja Platform for faster and secure payments. This helps in driving real time settlement and avoids dispute and reconciliation with participant members.

Please explain, how Cloud-based applications would help banks to save on cost?

With major cloud providers having data centres in India, the regulatory need of keeping data on-premise is no longer a major hurdle for cloud adoption. This is opening up opportunities for cloud usage in managing applications and infrastructure. However, it is important to note that Cloud adoption is not purely a cost saving initiative. It is important for banks to have well defined business goals that can provide direction on cloud adoption.

Cloud offers number of benefits in terms of scalability, agility, reduced capital expenses and business continuity. Significant focus and investment needed to assess the organizations readiness for cloud adoption. Some of the factors to be considered are Application readiness, Capacity of current data centre to ascertain whether it can handle the projected business volumes, current challenges in managing data centres etc. With good planning, following opportunities can be leveraged to reduce costs using cloud:

  1. Improve hardware utilization – Pay for what you use
  2. Rationalising license costs
  3. Reduce rework/downtime due to infra related issues
  4. Leverage industry best practices to improve time to market

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