• Spero Langaditis, Director of AI & Automation at NMI


• 11.08.2025 08:45 am
#AIPayments #PaymentInnovation

You walk into a store, grab what you need, and tap your phone to pay. No lines, no fuss, no second thoughts. Or maybe you're shopping online, where product suggestions seem to read your mind and checkout takes just a few clicks. That frictionless experience isn’t magic, it’s AI. From tap-to-pay and biometric authentication to personalized recommendations and real-time fraud detection, artificial intelligence is quietly powering the evolution of checkout. In conjunction with standard digital payment technologies, like NFC and tokenization, it’s working behind the scenes to make payments faster, smarter, and more secure—so seamlessly that we barely notice it. As consumer expectations around speed and convenience keep rising, AI-driven payment technology is helping businesses keep pace by reimagining every touchpoint of the transaction journey.

For businesses, embracing AI in payment processing is no longer just an innovation but a competitive necessity. Companies that fail to leverage AI for predictive analytics and real-time decision-making for fraud detection and personalization will struggle to meet consumer demands and risk losing out to more technologically advanced competitors. The businesses that embrace it are not only streamlining operations—they’re setting a new standard for what modern commerce looks like.

Making Payments Smarter and More Personalized

AI is about more than just speeding up transactions. It’s also about making payments and other elements of the checkout experience more intuitive. With AI-driven payment systems, businesses can offer personalized experiences catering to each consumer. For instance, when consumers shop, companies can collect data, and AI can suggest relevant rewards and discounts. Similarly, AI can help personalize the shopping experience in general based on shoppers’ past behavior – like offering customized items or tailoring product reviews to how a product fits shoppers of a similar height.  

Additionally, online retailers can use AI personalization to automatically customize discount offers at checkout and automatically recommend the best payment method. These predictive capabilities build on the foundation of personalization already introduced by rules-based logic in checkout experiences—such as converting prices to an international shopper’s local currency. This overall shift toward hyper-personalization at checkout improves customer satisfaction and increases conversion rates for businesses.

However, as much as consumers appreciate convenience, they also value transparency. People want to know when and how AI is being used in their purchasing journey. According to NMI’s recent research, 62% of Gen Z consumers would support AI-driven payment experiences. However, 38% of this age group remains hesitant about these experiences – either preferring to let retailers iron out challenges before adoption, or expressing no interest in these methods altogether. This disconnect reveals how consumers still have mixed opinions on AI. The study also found that 90% want instant rewards, but only if retailers are upfront about AI’s involvement and its purpose. This exemplifies the need for businesses to be open and transparent about how they are using customer data and how this data fuels AI models, ensuring that consumers feel comfortable and in control.

Fighting Fraud

71% of the survey respondents said they’d like to see an increase in security and fraud protection from payment technology in 2025. Fraud prevention is one of AI’s biggest strengths, and it’s changing the game for both businesses and consumers. Traditional fraud detection methods often struggle to catch sophisticated threats. They often rely on outdated rules-based models that result in either missed fraudulent activity or false credit card declines that frustrate legitimate customers. Also, criminals are also now using AI to help commit fraud.

Luckily, AI can analyze massive amounts of data in real-time, identifying patterns that indicate fraudulent behavior before it causes harm. Every single transaction a consumer makes creates dozens of data points. AI can instantly compare a new transaction against everything it has learned to make more accurate split-second approval or denial decisions than ever before.

Also, AI can recognize unusual spending patterns, such as a sudden expensive purchase in a foreign country, and immediately flag it for review. This proactive fraud detection is essential for businesses looking to reduce financial losses and build consumer trust.

The Demand for Speed and Efficiency

Beyond security, one of the biggest attractions of AI-driven payments is efficiency. Consumers don’t want to enter card details manually and wait for slow transactions. AI-powered payment solutions help offer features like real-time transaction validation, making purchases faster and more convenient than ever before.

The demand for seamless payments is straightforward. According to the same survey, 26% of consumers say they would support AI-driven payments if it meant a faster and more efficient checkout process.

Additionally, 33% of Gen Z consumers prefer AI-powered payments because of the time it saves them. This shift highlights a growing preference for automation and smart payment processing, particularly among younger generations who are accustomed to digital-first experiences. AI is making payments so invisible that consumers barely need to think about the transaction itself.

The Bottom Line

With enhanced security, real-time fraud detection, and frictionless checkout experiences, AI is one critical element among several technologies transforming how consumers shop. The public is increasingly drawn to smarter, faster, and safer payment solutions, and businesses that fail to adapt will struggle to keep up. AI is pushing the payments industry into a new era of intelligence and efficiency, and companies that invest in AI-driven payment technology will enhance the consumer experience and future-proof their business against evolving expectations.