As per Statista, there will be 8.4 billion digital voice assistants catering to the needs of users worldwide by 2024 (up from 4.2 billion in 2020). To put that into perspective, the number of voice assistants across devices worldwide would be more than the world population.
And this doesn’t come as a surprise considering the immense market penetration that voice/speech recognition technology has exhibited in recent times. From automotive to marketing and healthcare to education, voice recognition technology is proving its efficiency in practically all spheres of life.
Amazon Alexa, Apple Siri, Microsoft Cortana, Google Assistant, and the likes, stand as testaments to the fact that technology is no longer a linear force striving to advance the promise of a “connected world.” It’s an interactive and intuitive force that has demonstrated its value, in various forms, across diverse domains.
And that begs the question – can voice technology be as pronounced in the payment industry as it has been in other domains? Can voice payments be the next frontier for payment technology? And is it even worthwhile for financial institutions, payment processors, and tech companies to invest in this technology?
Before we answer these questions, it’s critical to understand how we got to this point. For years now, the financial services industry has been considering the idea of using voice as a medium for payment. Essentially, voice payments or voice-based/enabled payments correspond to the use of verbal commands to drive a payment process, while using a digital assistant-enabled device as the medium by which the command is executed.
How does this process work?
Now, of course, there could be various ways in which this process can be initiated. For example, the voice assistant might only activate once the user has opened the app. Or there could be a mix of voice and touch to drive the process. For example, Google lets users activate “Voice Match” to verify/confirm payments verbally after they tap “You > Payments” upon interacting with the Google Assistant – while making in-app purchases on Google Play.
But all in all, the thing that remains constant throughout is the fact that a verbal command could very well drive the payment process.
Now that we’ve established what voice payments are, let’s consider whether they could work in the financial services industry. Here, “feasibility” refers to the extent to which a new idea can be effectively implemented in terms of practicality, profitability, and sustainability. In other words, can voice payments lead to concrete, direct benefits for users and organizations alike?
As far as the users are concerned, “familiarity” and “convenience” play a key role. And there are positive signs in that regard. Back in 2018, a PwC Consumer Intelligence survey confirmed that 90% of the respondents were familiar with voice-enabled products. In fact, about 72% were already using voice assistants across smartphones, tablets, laptops, desktops, speakers, and wearables.
From a convenience standpoint, too, there’s a lot to look forward to. Let’s segment the users to understand this better:
Then there’s the language angle that can be brought in to favor localization and make users ‘ payments more user-friendly. And this is where the opportunity stems for financial institutions, payment processors, fintech, etc., to bring in differentiation — especially in a market like India where hundreds of dialects otherwise make it difficult to launch a pan-India push for any new product or service. Let’s explore the business benefits in more detail in the next section.
Thanks to the convergence of AI and machine learning technologies, and more profoundly, deep learning and neural networks, smart devices have become nothing short of a “smart window.” That is, after all, where voice assistants primarily sit. And that’s pretty much the vantage point from where they’re expected to serve up solutions to users’ problems in the context of payments.
For businesses, the influence of voice payments on their revenue and earnings can be best understood by taking a look at the following aspects:
In more ways than one, the adoption of voice payments has the potential to make transactions as hassle-free as possible. For instance, voice payments can ward off the friction that usually transpires while going through these steps – downloading the app, traversing through the verification process, entering the credentials, etc.
Fraud that emerges from the payment process can be obviated, thanks to the unique voice and biometrics-based authentication mechanism. This not only bodes well for businesses in reducing the cost of resolving fraud and maintaining a more reputable payment ecosystem but also for their customers to enjoy a premium experience and feel safer about using the payments methods.
Market penetration, especially when it comes to the rural and unbanked population, can be a major game changer for businesses. That’s because they would be able to bring in a wider base of users who would otherwise be unwilling to use conventional payment methods.
There’s only one answer to the question of whether voice payments can deliver the best experiences to users in today’s digital ecosystem. That would be a resounding “Yes.” And that’s because they have practically emerged as one of the most tangible and viable payment modes for this era.
But like any emerging trend, they will be subject to some degree of market turbulence and uncertainty – not to mention the technical challenges they’d accrue as institutions work to implement them. However, these are all things that all businesses should be able to mitigate over time, considering they partner with the right players like Verinite, who have the technology and expertise to back them. Get in touch to learn more.