ZAWYA: AI is changing retail faster than the payments industry thinks

What happened

Artificial intelligence is already reshaping retail and payments, but the article says the change may not come where businesses expect. Machine learning has helped payment providers detect fraud for about two decades, while AI shopping agents are beginning to reshape how customers discover and buy products.

Confirmed

Global impact / market context

Retailers and payment firms must decide where AI truly adds value and where it brings new risks. That affects spending on technology, fraud-checking costs and how consumers pay, so companies that misjudge it may waste money or lose customers.

Analyst inference

The core card payment process is mature, well defined and regulated, so AI is more likely to improve fraud checks and customer authentication than rebuild networks. That favors steady spending on risk tools over dramatic overhauls of payment systems.

Analyst inference

What to watch

1. Watch how payment providers use adaptive authentication such as 3D Secure 2, which adjusts checks to a customer's behaviour and transaction history, letting familiar purchases pass while unusual ones trigger verification. Confirmed
2. Retailers should test AI shopping agents on a small share of customer journeys and measure added sales against new costs before widening use. Proposed
3. If AI fraud systems wrongly flag legitimate payments, retailers may see lost sales and extra manual checks, raising costs and pushing them to demand better accuracy from providers. Analyst inference

Evidence

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