Voice-Activated Payments

Payment technology has evolved significantly, from cards to biometrics, and now, voice-activated payments are emerging as the next big breakthrough.

We’re already familiar with the advancements brought by voice-based digital assistants like Siri and Google Assistant, and now, this technology is gaining traction in the world of finance. Leading financial brands have begun implementing voice-activated services for tasks such as card activation, fund transfers, bill payments, and more.

This promising development signals a future where payments are increasingly powered by voice technology. In this blog, we’ll explore the direction the payments industry is heading, the progress made so far, and the challenges along the way.

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What are voice-activated payments?

Voice-activated payments aka voice payments are done via voice-based instructions through a digital assistant-embedded electronic device such as a smartphone, smart speaker, a car, etc. It uses AI and natural language processing (NLP) to recognize the voice of the account holder and follow payment instructions.

Though in the early stage, this technology has the potential to be one of the major contactless payment methods in the future.

The increasing utilization of voice assistants is shaping the adoption of voice payments. The surge in demand for contactless payments, popularity of voice assistants, and mobile commerce are steering the growth of voice-activated payments.

As per research, the global voice payments industry is expected to reach USD 7.51 billion by 2032, growing at a CAGR of 12.08%, from what was worth USD 6.92 billion in 2023.

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How does voice technology in payments work?

Voice payment is the most convenient mode of digital payment where customers do not even have to visit an app to make a payment. Customers can speak to their voice assistant, commanding it to make a payment on their behalf. The process relies on AI, ML, and NLP where voice commands are converted into digital commands to process the payment.

The process varies depending on the voice assistant your customers will use. But, here’s the general process of setting up and making voice-based payments.

1. Linking an account - the first step is to link up their voice assistant to their preferred payment method.
2. Using a prompt - your users will now have to say a prompt and direct their voice assistant to make a financial translation of choice.
3. Processing - the digital assistant will interpret the prompt and use the linked payment method to securely process the transaction.
4. Confirmation - this step ensures security in voice payments where customers have to confirm the payment via a follow-up voice command, password, or fingerprint.
5. Proof - your users will now receive a confirmation message that mentions all the transaction details.

Currently, voice recognition payments are available in select participating stores, online payments, donations, and bill payments.

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What are the benefits of voice-activated payments?

Here are all the reasons why people are considering making the shift to voice payments and why this technology is set to reach heights:

Accessibility

Voice payment facilitates hands-free operation, offering a high degree of accessibility. Customers can make payments while engaged in other activities like playing a sport.

Secondly, people having a hard time with digital devices or traditional banking methods can seamlessly use this method to make payments. It makes digital banking and financial services more accessible to the masses.

Effortless

Transactors do not have to enter card numbers, account numbers, and more for every new transaction or platform. The process of remembering passwords or navigating through a platform is eliminated here. They can seamlessly command their voice assistant to use the linked payment methods to process the payment, making the process a breeze.

Security

Voice payments do not process a prompt by anyone. It uses voice biometrics to recognize a voice, which is unique to every individual and processes the transaction. The technology picks unique traces of timbre, pitch, and more to recognize a voice that cannot be mimicked. It acts like another layer of security that is otherwise lost in the process of entering passwords, which can be done by anyone.

Speedy

Speed is another great benefit of using voice-activated payments. The hassle of manual entries of payment details in the payment process is replaced by swift voice commands. A one-time setup with a voice assistant gives customers a head start for a lifetime.

In-trend

We are all chasing the latest tech and customers want to have an early piece of the pie. This is another great advancement in technology that a lot of people are excited to try. And, the early adopters in the financial industry will have the edge.

Inclusive

Voice payments are inclusive because they help specially-abled people make payments independently. For example, visually challenged or people suffering from neurological disorders can make payments without supervision.

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What are the challenges in voice payments?

Here are the reasons why this technology has been slow in picking up the pace of adoption:

Security

There is a fair share of critics who are unsure of the safety and security of this payment method. Because the process of this technology is not as tangible as the other payment methods, and because any mishaps can lead to loss of money, a lot of people are hesitant.

One wrong command, misinterpretation of command, or an unintended command may lead to the transfer of funds to unknown sources that can be difficult to retrieve.

Privacy

There’s another privacy concern facing this technology. Not all customers are happy with voice assistants listening to all of their conversations. They believe information from their private conversations can be stored for future use by digital devices which is a potential threat to privacy.

Accents

Voice assistants are not accurate in understanding and responding to all non-native accents, thereby acting as a big barrier in voice payments. It makes accessibility a challenge for certain communities and not everyone will be able to use this method seamlessly.

Reliability

There have been promising advancements in this technology with questionable reliability. Voice recognition technology is young, making it vulnerable to misinterpretations. Frequent misunderstandings are reported in this technology that lead to incorrect transactions or failures. This technology has a long way to go in terms of accuracy followed by reliability.

User educations

There’s a lack of awareness about this technology where people are not informed about the technicalities of this payment method. The benefits and risks involved are equally uncommon knowledge. There has to be more awareness about safety usage, its critical features, and more, to increase adoption.

Integrations

Voice payments are not yet a standard method of payments and only select platforms offer this method. The inconsistency in the availability of this technology across different platforms might lead to its rejection.

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The future of voice technology in payments

We have witnessed the popularity of contactless payments and voice assistants. Voice recognition payments sit at the intersection of these two powerful inventions, making it a revolutionary payment alternative of the future.

With enhanced AI and IoT integration voice payments will witness better traction in the future. Widestream availability across platforms globally, better security, as well as voice recognition backed by user education and preference for convenience, will position voice technology as a mainstream payment method in the future.

Retailers looking to increase their customer bases will grab this technology as an opportunity and provide voiced-activated payment options in their ecosystem. For customers, a hands-free and frictionless payment system will offer better satisfaction and ultimately drive adoption.

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Conclusion

The common objective of voice-activated payments is to introduce convenience, a contactless experience, and less friction in the payments process. But, there’s a lot of advancements, upgrades, and work to do for this technology to reach heights.

Demand for convenience is paramount and merchants have to take steps and initiatives to introduce it to customers. You can do so by offering secure alternative cashless payment solutions that are created to reduce friction.

Payment solutions like Payby are designed to reliably handle end-to-end payments, making it simpler for businesses and consumers to complete and record transactions. We offer multiple payment modes and in-app payment solutions, among many other features to help you set up the most robust digital payments infrastructure for your business.

Get started with Payby to experience the difference.