How Chatbots Are Starting to Mine Payments Potential for Banks, Issuers, And Chat Apps

It may be called artificial intelligence, but the potential this technology opens up for payments and banking is turning out to be very real. Earlier this week, yet another major messaging platform agreed to support chatbots that would let its users transfer funds, check their bank balances, and perform other account functions without leaving a digital conversation.

The platform, called Viber, is a unit of the Japanese online retailer Rakuten and links 754 million unique users around the world for chatting and voice calling. With the chatbot technology, which comes from Slovenia-based Comtrade Digital Services, users whose banks agree to participate will be able to instruct the bank to send money through the messaging app to another Viber user. The recipient can claim the funds using a QR code at an ATM.

Crucially, the transaction occurs within the context of the chat, and the transfer is real-time, Oliver Lynch, business development director at Comtrade, tells Digital Transactions News. “This solution is just ideal for micropayments or for when you want to send money to your kids quickly,” he says.

Comtrade plans to have its first bank, an Austrian institution that Lynch would not name, live on the chatbot technology within a few weeks. The company already supplies software and services for some 20 financial institutions in Europe. “Bots have been used in other industries for quite some time, in online gaming, for example,” Lynch says. “It seemed like a natural fit for banking.”

The news of the linkup between Comtrade and Viber follows by weeks the announcement that MasterCard Inc. is working on chatbot technology that will work with Facebook Messenger and allow its cardholders to make payments as well as check account balances and perform other tasks while chatting. Similarly, PayPal Holdings Inc. has opened its platform to Messenger transactions by its accountholders using chatbots created by Facebook advertisers. Meanwhile, financial institutions in the U.S. have begun deploying or exploring the technology for such functions as account opening and person-to-person payments. And messenger apps hold allure for payments companies even without the addition of chatbots. This week, The Western Union Co. made its own deal with Viber to enable money transfers within chats for U.K. users, following a similar arrangement in the U.S.

A form of artificial intelligence, chatbots are bits of code that typically operate within texting or mobile-messenger platforms. They receive and execute instructions that allow users to perform transactions related to conversations they’re having with other users. The number of users of mobile messaging apps worldwide is expected to climb 36% from 2016 to 2020, reaching 2.19 billion, according to projections from eMarketer.

Most of these users fall into the coveted Millennial generation, experts say. That’s one big reason Comtrade decided to develop chatbots for messaging. “After talking to our customers in financial services, it became clear this is something we should focus on,” Lynch says. That decision made, it remained to find a messaging platform. “Viber has a global reach and a proven platform, and it’s open to working with partners,” he says. “It fitted the bill.”

The link with Viber also appeals to financial institutions looking to accelerate innovation in payments and customer service, Lynch says. “Most banks have legacy systems that are 20 to 30 years old. For them to release products quickly is a real challenge,” says Lynch. “We help to get our clients into a situation where they can release products on a weekly basis.”

With that in mind, he adds, chatbots are “a natural progression for us. We see the partnership with Viber as an exciting opportunity for banks to compete.”