What Your Payments Are Missing: AI Customer Experience and Personalisation

Drive More Revenue with AI for Customer Experience and Personalisation 

As AI continues to reshape industries globally, payments are no exception. From seamless checkouts to bespoke payment options, AI is leading a revolution in customer experience, raising the bar for convenience and personalisation. 

Prioritising customer experience should be a key strategic goal for all businesses. Salesforce reports that 65% of shoppers remain loyal to brands that provide personalised experiences. Additionally, McKinsey has found that personalisation can increase revenue by up to 15%.

In Rapyd’s “Future Ready: The Guide to AI and Payments”, article series, Rapyd explores how AI is changing the many aspects of payments. Here, we focus on how AI is improving customer experience and personalisation – allowing you to increase revenue and drive continued customer loyalty. 

Personalisation in Payments

Personalisation is no longer optional; it’s becoming a standard expectation. Consumers crave the VIP treatment and look for brands that cater to their preferences. According to Deloitte, 

69% of customers share they are more likely to buy from a brand that offers personalised experiences. 

AI now allows payment providers to offer these hyper-personalised experiences, from tailored payment options to loyalty rewards and seamless checkouts. Some companies are even testing dynamic pricing models based on factors like demand, buyer preferences and even income.

This level of personalisation isn’t without challenges. Kroger, a leading U.S. grocery chain, recently faced criticism over its dynamic pricing plans, inviting scrutiny from lawmakers. Senators Elizabeth Warren and Bob Casey raised concerns over the potential exploitation of consumer data, emphasising the need for ethical standards in AI-driven personalisation. 

How AI Enhances Customer Payment Experiences

“Customer service can now be more automated, tailored, and targeted to our customers. AI allows for both efficiency and personalisation” noted Dr. Stiene Riemer, Global Lead for AI Developments at BC X in a recent Rapyd interview. One area that is benefitting from personalisation is payment methods. Consumers are presented with countless payment options, from credit cards to modern digital wallets and even cryptocurrencies. This variety, while beneficial, can lead to customers abandoning their shopping carts if they can’t find their preferred payment method at checkout. 

AI is stepping in to simplify this decision-making process. By analysing customer behaviour, preferences, and previous payment history records, AI can sort through the payment options and present the most suitable ones for each transaction. This tailored approach simplifies checkout and caters to individual needs, significantly reducing cart abandonment and ensuring a smoother transaction experience.

AI-driven chatbots and virtual assistants further enhance the experience by offering instant support for common issues, such as payment failures or transaction inquiries. This real time assistance reduces wait times and creates a more positive customer experience. Additionally, AI can personalise incentives, providing tailored discounts or loyalty rewards that increase engagement and satisfaction.

Eliminating Friction from the Checkout Process

AI’s role in reducing checkout friction is already evident, with technology simplifying every stage of the payment journey.  One area of improvement is the optimisation of checkout flows. According to Capterra, nearly two-thirds of customers expect to complete their online checkout in four minutes or less. By dynamically adjusting the process based on real time data, AI can detect issues like slower internet connections and streamline pages accordingly, reducing the likelihood of cart abandonment. AI can even anticipate potential problems—like a declined card—and suggest alternative payment methods, proactively guiding the user towards a successful transaction.

Looking forward, AI promises to enable “invisible payments” where transactions occur seamlessly in the background, eliminating manual steps entirely for an intuitive, frictionless experience. Amazon Go stores utilise AI-powered computer vision to monitor customers and items as they shop. Shoppers simply pick up what they need and exit the store, with payments processed automatically as they leave. In China, Alipay has introduced a “Smile to Pay” system, which employs facial recognition to finalise transactions.

Ethical Implications of Personalisation in Payments

Using AI to personalise payment experiences requires careful ethical balance and risk management. A primary concern is bias in AI models. AI trained on skewed data may unintentionally favour certain demographics, leading to unequal treatment based on income, location, or purchase history.

Privacy is another vital consideration. AI personalisation requires significant data collection, making transparency essential. Customers should be able to opt in or out of data sharing for personalised services. Misusing customer data or failing to secure consent can breach trust, harm AI’s reputation, and lead to legal issues. For instance, Business Insider reported on a lawsuit alleging ChatGPT was trained on personal data, including medical records, without consent.

Regulations like GDPR protect consumer privacy by granting control over online tracking. However, techniques like digital fingerprinting—which identifies users through unique device characteristics—can sometimes circumvent these protections. With AI, the stakes are even higher. Businesses must ensure their data practices comply fully with both the spirit and letter of such regulations.

In cross-selling and upselling, it’s important to distinguish between helpful recommendations and overly commercialised suggestions. AI-driven offers should prioritise the customer’s best interests, enhancing their experience rather than focusing solely on revenue. Over-commercialisation risks eroding customer loyalty and damaging brand reputation over time.

The Better the Checkout, the Greater the Returns

AI is providing praise-worthy customer experience in payments, allowing for greater personalisation, smoother checkouts, and efficient, real-time customer support. As payment leaders work with AI they must remain mindful of both the opportunities and challenges.

Here are several considerations to support revenue growth and customer loyalty:

• Optimise Checkout Processes: Leverage AI to minimise checkout friction and adapt the payment process in real time. 
• Embrace Personalisation: Implement AI-driven personalisation to meet consumer expectations for tailored experiences.
• Enhance Customer Support: Utilize AI-powered chatbots and virtual assistants to provide instant, efficient customer service. 
• Consider Ethical Implications: Pay close attention to the ethical use of AI, particularly regarding data privacy and potential biases. Ensure transparency in data collection and give customers control over their information to maintain trust and compliance with regulations.
• Focus on Fast and Easy Transactions: Aim for effortless transactions where AI facilitates transactions discreetly in the background.

By prioritising transparency, inclusivity, and customer interests, companies can harness AI to enhance user satisfaction, build trust, and foster long-term engagement. For those ready to embrace these changes responsibly, the future promises a new era of customer experience, driven by intelligent, adaptive, and customer-centric technologies.