September 17, 2018

Seamless Payment: Robo-payments, reality or hype?

SMART Payments: Step 1 – Simplify payment complexity

The race to digital is rattling the payment ecosystem with more choice for consumers adding complexity across the payment value chain – from merchants to consumers and everyone in between. This blog post is the second in a series that will unpick the characteristics of a winning payments strategy that gives consumers what they need, without sacrificing safety, and gives payment providers the confidence to compete.

The “SMART Payments” series will provide insights on the components that are essential for any organisation wishing to succeed in digital finance and some examples of best practice – i.e. Seamless, Mobility, Agile, Robust and Technology

2. Robo payments – reality, hype or hope?

Visit a branch of Mizuho bank in Japan and your official greeter is likely to be a humanoid robot called Pepper. The same robot is being trialled by MasterCard at Pizza Huts in Asia – where it takes orders and processes payments via MasterPass.

So far, so sci-fi. But when we talk of robotics in the payments industry, it’s less about having a credit card processed by C-3PO and more about intelligent systems, programs and code that can process data, analyse it and, crucially learn from it. Less photogenic, certainly, but likely to deliver much more dramatic results.

In fact, robotics can be viewed as a spectrum with basic scripting to support repetitive work at one end, artificial intelligence (AI) and deep machine learning at the other, and robotics process automation (RPA) in the middle. Getting these definitions right may sound like something best left to the IT team, but it is essential to have common definitions if we are to separate hype from hope and find the reality behind this much-touted branch of technology.

It also cuts to the heart of what we mean by SMART payments. As we discussed in the first post in this blog series, introduction of new technologies has to be seamless if it is to succeed. Innovation for innovation’s sake is unlikely to succeed if customer requirements are actually ignored; understanding the difference between a robot and robotics, between buzzword and real business benefit is the essential starting point.

For example, the principles of AI are behind facial recognition software, which could offer a new way to authorize and even make payments: no cards required, no PIN necessary. MasterCard is introducing this kind of “selfie” payment using an app and Samsung’s face recognition-based mobile payments are in development. Just blink and you’re done.

It’s simple and it’s incredibly convenient. But imagine the consequences of a negative match in the middle of the supermarket, or at the petrol pump, or when checking out of a hotel. That’s not a minor inconvenience. The question for payment providers is whether the possibility of the rare but hugely disruptive consequence outweighs the benefits of a minor every-day improvement for customers.

Easier to assess, and more realistic to implement, are behind-the-scenes process improvements created by automating repetitive, rules-based tasks – particularly in the process-intensive payments sector.

For example, Feedzai has deployed its skills in data science to create a continuous and rapid evaluation and large-scale analysis of Citigroup’s data in order to identify and eliminate fraud in online and in-person banking. PayPal has also used machine-learning techniques to analyse and compare millions of transaction flows, and indicate which payments are friendly and which are fraudulent. PayPal’s fraud rate is down to 0.32% while the industry average remains a stubborn 1.32%.

Elsewhere, Blue Prism has developed more than 200 bots for Bank of NY Mellon to handle repetitive tasks. They include correcting formatting and data mistakes that slow down requests for funds transfers. Barclays has implemented RPA to process payment-protection claims, while Australia’s ANZ uses RPA to fix time-consuming errors that occur everyday in payments.

In a slightly different take on using robotics on repetitive tasks, payment business Adyen is using six robots to test its payment terminals 24/7, to make sure they can cover any card in any scenario. The testing is being conducted at a far faster and more accurate rate than human forces could manage – and gives its growing customer base a great deal of confidence in its online and offline payment platforms.

These may not be the eye-catching examples that capture the headlines. They may lack the ‘cool’ factor. But they all contribute to a seamless improvement to the services offered to customers that are easier to integrate into existing systems without sacrificing safety, security or continuity. As a result, they are the most likely sources of hope when it comes to real-life payments businesses.

Interested in knowing more about creating seamless processes? Email me at to arrange a call to discuss how we can help your business navigate payments.

– David Amato Head of Sales and Implementation, RS2

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