How AI Is Turning Conversations Into Transactions for Merchants

Artificial intelligence (AI), in the form of predictive algorithms, has been around for a while.

But while its impact has primarily been in the background of workflows, the emergence of generative AI has brought the technology’s impact starkly to the forefront of commerce, payments and the broader operating landscape.

“With generative AI, you can now talk to computers — we have become less active and the computers are now going to work for us,” Doriel Abrahams, head of risk, U.S. and principal technologist at Forter, tells PYMNTS for the series “What’s Next in Payments — Payments and GenAI: What’s New and What’s Next?”

This groundbreaking development, which allows users to communicate with their devices in a more conversational and interactive manner, has the potential to revolutionize the way we interact with technology and streamline our daily workflows.

From receiving recommendations, price comparisons and even making purchases through voice commands, generative AI is transforming the fundamentals of commerce, Abrahams said.

“Travel is a great example. As a shopper, you typically don’t have enough working power to literally go through every site and compare every flight — but AI can do that in just one click,” he said.

This not only saves time for shoppers but also uncovers deals that might otherwise go unnoticed.

The Evolution of Generative AI in Transforming Payments and Commerce

Abrahams envisions a future where smart devices, such as refrigerators or even closets and wardrobes, automatically restock themselves based on users’ needs. This level of automation could revolutionize our daily lives, making mundane tasks more efficient.

But that doesn’t mean that as generative AI gets integrated across more commercial marketplaces and into more user interfaces, its applications will be entirely risk-free.

On the contrary, as generative AI becomes more prevalent, there is a need for regulations and standardization to ensure that the technology aligns with users’ expectations of safety, security and convenience.

What is crucial, Abrahams said, is for commerce platforms and players to identify legitimate activity and distinguish between good and bad shopping bots and other generative AI products being tasked with various activities.

“You need to figure out that there is a legitimate connection so you can enable that transaction to go through, otherwise it might be fraudulent … bots are almost synonymous with bad activity in the fraud world, so we need to identify also whether the action is being taken by a good bot or a bad bot,” Abrahams said.

Building AI-powered shopping chatbots using external systems and APIs introduces risks, particularly in the context of fraud prevention, and Abrahams acknowledged that both fraudsters and risk management professionals are developing tools to leverage AI technology. The challenge lies in staying ahead of potential risks and ensuring secure transactions in an increasingly connected commerce landscape.

Protecting the Future of AI-Enabled Commerce

As AI evolves, the potential for AI systems to perform actions rather than just providing assistance becomes more likely, raising further questions about the impact of AI tools on prevailing strategies for risk management.

“As technical development grows, it’s always in parallel,” he said. “It’s one thing when a person manipulates a chatbot, but what happens when it is one chatbot manipulating another chatbot?”

He added, “As risk and payment engines get used to identifying the good behavior versus bad … network effects can be incredibly valuable.”

By leveraging network knowledge and identifying shared behavior, businesses can make more informed decisions about transactions. This enables a more efficient and secure payment experience for both consumers and retailers.

“You can always leverage data in order to make better and more accurate decisions than you would’ve in a vacuum,” Abrahams said.

Looking ahead, he emphasized that the predictive element of shopping is only going to increase — and will increasingly transform the commerce occasion.

Additionally, risk managers can leverage AI to streamline data analysis and make more accurate decisions, ultimately enhancing the overall payment experience.

But what most excites Abrahams about the future is that the conversation around AI is turning from negative to positive.

“AI has always been inspected under the filter of how it will create new fraud tactics and accelerate risk, what’s bad about it. I’m excited to see now how the tides have turned, and we’re already talking about the benefits and great things it can do. I am a huge supporter of new technology,” he said. “I think it can do great things … even if it is just a better shopping experience.”