Artificial intelligence in digital payments

Artificial intelligence in digital payments

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A recent Harvard Business Review article suggests that the best use of AI is to support human intelligence, not replace it, using smart processes that play to the strengths of both human and machine.

That vision is already playing out in the world of digital payments and payment providers. By carefully structuring the accounts payable (AP) process, humans are partnering with AI-enabled payment systems to improve speed, accuracy, compliance, and fraud protection in financial operations. 

What is AI in the payments industry?

AI in the payments industry combines artificial intelligence (AI) with AP best practices to standardize and automate payment systems. The AI makes sure the right procedures are followed while streamlining operations for its human partners. As a result, bookkeeping and accounting processes become more efficient and more accurate.

What is the role of artificial intelligence in digital payments?

By doing things like automatically applying approval rules or detecting common patterns found in payments fraud, AI partners with human beings to improve digital payments processes from start to finish.

AI for invoice processing

One form of AI uses computing power to recognize text in images. Known as optical character recognition, or OCR, it's used in invoice processing to read invoices and other financial documents, entering the relevant information into financial systems for human review. By adding machine learning, the computer can get better at recognizing this same information in future invoices:

  • Transaction data, such as price
  • Customer data, like shipping and billing addresses
  • Potential cost savings in payment terms
  • And more

This human-AI process partnership improves accuracy and minimizes the need for manual data entry, saving teams hours of valuable time.

Because AI can scan human text, it can also detect duplicate invoice numbers and recognize the presence of multiple bills within multi-page invoices. This reduces the chance of human error and helps protect against fraudulent transactions.

AI for approval rules

By recognizing data in invoices, computers can automatically apply the right approval rules to each invoice, sending them to approvers without the need for human intervention. This streamlines the approval process and captures approvals electronically, even on mobile devices.

AI for automatic audit trails

Not every application of financial automation uses true AI. An automatic audit log, for example, keeps a time-stamped audit trail of everything that happens throughout the payments process. This is a relatively straightforward algorithm that can save a tremendous amount of time during an audit.

AI for payment processing

Another automation that doesn't rely on artificial intelligence is the ability to remember personalized payment options and preferences. Today's payment solutions improve the customer experience (or vendor experience) by letting them choose their preferred payment methods from multiple payment options—such as ACH, credit card, check, or international wire—as part of the payment process.

AI for fraud detection and prevention

Natural language processing (NLP) is a form of AI that goes beyond recognizing characters, letting computers read and process human text.

With invoice, approval, and payment logs compiled in one place, AI can scan through every touchpoint in the AP process, summarize hundreds of pages of data for human auditors, and flag potentially fraudulent transactions as well as areas for special attention.

The technology behind AI in payments

AI technology used by payment providers is not unlike the tech behind thousands of other AI applications. What's unique is how the human-AI process partnership is structured.

When it comes to AP automation, human intelligence is placed at the forefront:

  • AI reads invoices and enters data. Humans review that data before accepting it into the system. 
  • Computer algorithms apply approval rules to route each invoice to the right people. Human beings are the actual approvers.
  • AI flags duplicate invoice numbers or invoice amounts that don't match purchase orders for human scrutiny. Human beings then review to decide whether there's a problem and what to do about it.

In each case, AI never overrides or replaces human judgment. It simply streamlines manual tasks and applies best practices automatically.

How does AI affect the digital payments industry today? 

The processes outlined above aren't science fiction. They're very real systems being used today by over 5 million BILL network members to automate the way they pay and get paid.

AI use cases in AP and payment processes

Here are just a few examples of how companies are using AI-powered software in their financial operations:

  • For Boys and Girls Clubs of Silicon Valley, AP automation frees up hours of team time to focus on program expansion.
  • Bombas uses it for both domestic and international vendor payments, using the improved cash flow visibility for proactive spend projections.
  • Bear Robotics knows AI well. Through AI and autonomous robot technology, the company deploys robots to take care of drink serving, food running, and table bussing, freeing the wait staff to focus on delivering outstanding service. They also use it to free their finance team from hours of manual paperwork, implementing a seamless, scalable AP process to support international growth.

Benefits of implementing AI in payments

AI technologies automate financial operations while providing advanced analysis for their human partners.

Time savings

AI-powered software is a game-changer for financial professionals, saving them countless hours on routine accounting tasks. This gives them more time to focus on other important aspects of their business that contribute to growth.

Improved accuracy

By using AI-powered software to delegate routine tasks, finance teams save time and achieve more accurate results compared to manual data entry. With the help of NLP software, errors associated with data entry can be minimized, giving teams greater confidence in their expense reports and other data.

Better business decisions

One of the most significant recent financial trends is how often financial professionals are being asked to weigh in on key business decisions. AI gives finance teams access to real-time AP and cash flow data as well as predictive analytics to explore future trends through cash flow forecasting.

Challenges of AI in payments

As impressive as AI is, it still faces a few key challenges:

  • AI can't adjust to unforeseen developments
  • AI often misses contextual meaning
  • AI may have trouble with technical jargon
  • AI may struggle to tell the difference between innocent error and fraudulent intent

Fortunately, people do these things extremely well, and AI excels at things that tend to slow us down. That’s why humans and machines work so much more efficiently together than we ever could on our own.

The future of AI in payments

There's no question that AI is changing the face of financial operations, but the day when machines could replace human finance teams won't be any time soon—if ever. Instead, AI is partnering with human beings to help improve accuracy in their transaction data, prevent fraud, and ensure the application of best practices throughout the AP process.

AI may be developing at a dizzying speed, but the need for strong finance teams is greater than ever—teams that depend on AI to augment their core strengths and help them make confident decisions in real time.

Leverage AI in business payments with BILL

BILL's integrated financial operations automation platform makes it easy to streamline your AP, AR, spend, and expense processes. By adapting early and leveraging AI in your financial operations, you'll be able to customize your workflows and reduce risk while enjoying firmer control over your cash flow and better visibility into your financials.

BILL also integrates with popular accounting software providers, including QuickBooks, Oracle NetSuite, Xero, and more.

To learn more, explore BILL’s AI-enabled business payments.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided "as-is"; no representations are made that the content is error free.