Artificial Intelligence Brings ‘Smart Logic’ to Payments Orchestration


Payment and commerce can be altered by artificial intelligence. “AI and machine learning may affect numerous places [inside financial services],” Andy McHale, senior director of product and market strategy at Spreedly, told in an interview.

In general, he stated that machine learning and AI might accelerate computations and discover patterns and methods that people — or teams of humans — just cannot achieve on their own.

“Either we can’t get there, or the scale doesn’t exist,” he explained.

He said right away that the benefits of these modern technologies will be apparent in the more “passive” aspects of finance rather than active consumer-led activities. He emphasized the need for fraud prevention in light of the advent of open data and open banking.

“There is potential for AI to assist safe commerce and secure data transmission on the backend,” McHale said, “but also to keep the friction low for consumers upfront so that they don’t have to go through many authentication stages, or extra steps during their purchasing excursions.”

As payment provider, he believes AI will be a boon to payment orchestration. Financial institutions (FIs) and acquirers use smart intelligence to find the optimal methods to route transactions.

“AI is ideal for optimizing acceptance rates, fraud rates, and expenses associated with fees,” McHale added.

If a network fails, real-time analysis and improved transaction routing will be able to direct funds to backup systems. This would be an improvement over the current procedures and processes, in which written rules often regulate the routing, drop-down menus, and workflow engines that merchants must maintain inside their platforms.