We already use a great many web services and apps to make our lives easier, yet, want things even easier still. With chatbots soon helping us to shop, this presents the payments industry with both an opportunity and a challenge.
It feels as though each day brings a new trend and each week a fresh revolution. Yet, if we put aside the artificial hype we realise that real revolutions are not that frequent. The last change to genuinely affect multitudes of people was the launch of the smartphone. But with its multitude of apps, today’s smartphones are becoming too complicated, with users having to switch between a variety of apps in an attempt to optimise their everyday lives.
Let’s consider how complicated it is to organise something using a smartphone. Say, for example, that you’re interested in going to a concert with a friend. First, you decide on an artist via email or a messaging program. Next, you use your browser to search for concert dates. If there’s nothing in your hometown, you go to Google Maps to find out how far it is to an event in a different city. Once you’ve collected this information, you go back to your friend to get their input. After you’ve chosen the date and location, you go to the booking website. Here, a variety of problems can arise, including sold-out dates or poor seating choices. By now, you’ve spent a great deal of time and used a wide variety of apps and services, and still don’t have concert tickets. Then, of course, you must continue your task via a specialist booking or payment app –all this to achieve a single aim.
It is here that chatbots have the potential to dramatically streamline how we use our devices.
Doing it all via messaging apps
Chatbots hang out exactly where users do: in messaging apps. The most popular of which, like WhatsApp and Facebook Messenger, are installed on almost every smartphone.
WhatsApp alone is used by more than a billion people, while Facebook Messenger has around 800 million users. If, therefore, people are already hanging out in messaging apps with their friends, instead of switching to a different app, it would be far more convenient for them to be able to send a message to a music themed chatbot to help them find a venue to watch their artist of choice and book the tickets.
For industry giants like Facebook, Google and Microsoft, chatbots are currently a hot topic, with many Internet retailers champing at the bit to gain access to the messaging apps’ huge target audiences.
Whilst currently in their technological infancy, chatbots can show current information on the weather, or order pizza via text. There are also chatbots which function as interactive gaming partners or language trainers. In order to speed up chatbot development, companies like Facebook are providing appropriate software modules and interfaces.
Chatbots need to be self-learning and capable of retaining current context. This means that someone looking for information about an artist, then enquiring about concert dates, shouldn't need to mention the artist's name twice. Just like a human interlocutor, the chatbot should remember that its chat partner is still talking about the same artist.
Payment via chatbots
The more intelligent chatbots become and the more services that can be covered by messaging apps, the more important the subject of payment becomes. Various models are conceivable: users can, for example, simply store payment data in the messaging platform and then pay with any current payment method, like a credit card or PayPal. This means that users need only share their payment information with a single provider. This method is already in use in the USA, where Uber, the popular ride-sharing service, is fully integrated into Facebook Messenger, complete with payment functions.
Chatbots themselves could also be designed to receive payments. To do this, the platform operators would have to build a kind of chatbot app store to enable users to find appropriate chatbots. Payments could then be processed centrally by the platform operator using payment data. It would also be possible for chatbots to replace retailer-specific apps, and for these chatbots themselves to contain payment functions. After all, who needs yet another shopping app when you can do everything via your messaging program? Almost no-one.
Using chatbots, retailers would simply use their chatbot to approach their customers and offer them a convenient way to pay. This concept of ’conversational commerce’ already exists; after all, chatbots are designed to facilitate direct communication between customers and brands, shops and retailers. The requirements of payment services are, therefore, very similar to those of payment apps. They must be as easy to use as possible, with one-click models being the most desirable, and ideally feature a mode of biometric authentication.
Simple P2P payment
For a long time now, the payment industry has been discussing making peer-to-peer payments via smartphone. There is, however, no standard app which facilitates direct payments via smartphone. Why would people even want a separate app when they already use a messaging app to keep in touch with their friends? A chatbot could take over this function and, with a simple 'Pay Tim £23', split a restaurant bill.
Conclusion: Exciting and dangerous
Although chatbots are still in their infancy, the major technology companies are amassing all kinds of tools for equipping them with artificial intelligence. Soon users may no longer be able to tell whether they are communicating with a real person or with a chatbot. Retailers will need to rethink their strategies if their customers begin avoiding store-specific apps or mobile websites and hanging out almost exclusively in messaging applications. There is, however, no such thing as an ideal world when it comes to chatbots. Although communication with virtual assistants may sound simple, it must be secure if it is to handle personal data.