AR, VR & AI – change the way we pay World
The increasing adoption and use of smartphones is raising consumer expectations of immediate responses and immediate access to goods and services. This need for immediacy is also leading to changes in payment methods, according to Mastercard. The company predicts a corresponding increase in ‘conversational commerce’: payment as part of conversations, via for example Facebook Messenger or Whatsapp. The growing adoption of artificial intelligence and virtual or augmented reality in digital platforms will also mean changes in how we pay for goods and services.
These new options for mobile payments were shown at the recent Mastercard Innovation Forum in Amsterdam. Alongside Mastercard’s own insights into payment innovation from its director of MastercardLabs, the entrepreneur Peter Hinssen started off the forum with a talk about how companies need to build digital services into their business, rather than just add digital as bolt-on. Oskar Laufer from Paykey also showed how messaging could be the new platform for payments, by adding a payment option to the user’s keyboard.
Digital payments means digital people
Hinssen explained how companies should pay more attention to the ‘day after tomorrow’ if they want to keep up with the ever increasing pace of technological advances. Dealing with the the ‘problems of yesterday’ can make it difficult to focus on today and tomorrow. However, Hinssen warned that companies need to reinvent themselves for the new era, not just digitise their old systems.
The question is often whether digital can be built into the organisation or just bolted on. But customer service can no longer just address the average customer -It needs to focus on the individual needs of each customer. That also applies to the financial sector.
Mastercard’s Director of Labs, Ken Moore, outlined how digital payments will be not just a single change, but driven by a mix of technological changes, such as the advances in artificial intelligence, the growing on-demand economy, changes in consumer expectations and advances in smart city development. Businesses need to digitise not just their payment processes but also their people, in order to be ready for a new culture where everything is connected. Moore showed various new ways how payments can be integrated into or work with new technologies such as virtual reality (VR) or chatbots.
VR, AR and chatbots to become part of payment experience
One of the examples demonstrated by Moore involved a retailer integrating payments and virtual/augmented reality (VR/AR) into its app. The app of a furniture retailer could allow consumers to virtually place furniture in their own virtual living room to see how it fits. It then simply requires a few clicks to add the piece of furniture to the app’s shopping basket and pay. Payment is executed via Masterpass, Mastercard’s digital wallet (live in European countries such as Belgium, France, Italy, Germany and the UK).
A clothes retailer could add VR in its fitting rooms, while using AR and machine learning to suggest other outfits to try on virtually. After making a choice, the customer can scan the items into the app and pay from within the app.
An example with chatbots demonstrated by Mastercard showed how to order a plane ticket via Facebook Messenger within a few minutes. The chatbot knows enough about you to suggest places to go and knows when you are free from your calendar, so with one click the flight is ordered and then paid for via Masterpass. The customer also receives his ticket with barcode instantly in the message.
Messaging the new payment platform
Paykey founder Laufer talked about how messaging may become the new payment platform. Wechat in China has successfully integrated messaging with payments, payment app Paytm has started a messaging app, and Facebook has secured an e-money license in Ireland, allowing it to roll out peer-to-peer payments across the EU, while it is already live with P2P payments in the US. According to Laufer, most millennials find their banking apps unappealing but they do trust their banks. Banks can use Paykey’s social banking solution to improve this situation. He showcased how mobile users can transfer money to anyone within any social platform. This is possible via a special keyboard with integrated mobile banking app or e-wallet. The payment button on the keyboard brings up your mobile banking options without having to leave the app the customer is using, such as Whatsapp. The keyboard functionality can be used by banks as well as retailers with a mobile app for ordering and paying for their goods, or by telcos, especially in mostly prepaid countries, to top-up credit.
As virtual reality, augmented reality and artificial intelligence become more widespread in various segments of our lives, payments will become part of these new experiences. These new ways of paying via mobile devices will allow payments to become a more seamless experience, propelling digital payments to become more commonplace, especially as the younger generations gain more spending power as they become older