Acquiring banks that use artificial intelligence (AI) to monitor merchants on their platforms say the technology has yielded many significant benefits that help boost their businesses’ bottom lines.
A new report, AI In Focus: Gaining Ground On Merchant Monitoring, a PYMNTS and Brighterion collaboration that surveyed 104 executives from acquiring banks, found that the main benefit is improved operational efficiencies that help drive down costs. Ninety percent of these acquirers cite improved operational efficiencies as one of the benefits of using AI, and 18% say it is the chief benefit.
Get the report: AI In Focus: Gaining Ground On Merchant Monitoring
Many acquirers also say that AI has helped them tackle several key barriers holding back their profitability, including fraud, low transaction volumes, short stays by merchants and the need for manual review.
The use of AI also helps acquirers differentiate themselves from their competitors. PYMNTS research shows that 94% of acquirers using AI for merchant monitoring see the range of products and services they offer merchants as one of their market differentiators, and 69% see the effectiveness of their transaction monitoring as a differentiator.
In contrast, just 58% and 29% of acquirers not using AI believe the variety and range of their services, respectively, are reasons merchants choose them over competitors.
The only area in which acquirers that use AI are notably less confident than those that do not is their pricing.
High prices are the most common reason why acquirers using AI believe merchants leave their platforms, with 78% believing this to be the case. The next most-cited reason — over-monitoring of the merchant — is far behind, with only 9% believing it to be the case.
Among acquirers that do not use AI, the main reason they believe merchants leave is their lack of key product or service offering, with 38% pointing to that as a factor. The second most-cited reason among these acquirers — at 33% — is that their cost or pricing is too high.