Artificial intelligence burst into the business world on January 23, 2023, when Microsoft announced a $10 billion investment in OpenAI, the parent company of ChatGPT. This announcement sparked a fierce competitive race among tech companies. Terms like “LLM” (large language model) quickly became commonplace, but practical applications were slow to emerge—early AI models were often seen as curiosities rather than essential productivity tools.
In just two years, however, the landscape has transformed dramatically. Recent releases from leading tech providers demonstrate significant improvements in the quality of LLM responses across a wide range of queries.
For context, major tech companies like Meta, Amazon, Alphabet, and Microsoft are projected to spend up to $320 billion combined on AI technologies and data center expansions in 2025. The rapid pace of LLM advancements will only accelerate, with new upgrades already in training that build on prior experiences to deliver more understandable and useful outputs. How will AI impact the payments industry? Let’s explore.
We’re using Visa as a proxy for the payments industry, as a company-specific example can help readers relate better than a broad overview. Visa has been leveraging artificial intelligence (AI) and machine learning (ML) for over 30 years, with investments exceeding $10 billion in these technologies to improve fraud prevention, network security, and payment experiences. This includes processing over 500 data points per transaction in real-time to flag potential fraud. According to company documents, these efforts helped prevent approximately $40 billion in fraudulent activity during fiscal year 2024.
Fraud Detection and Prevention
Visa uses AI extensively to combat fraud, including advanced risk-scoring models that analyze billions of transactions to identify and block threats. Key initiatives include:
- Visa Advanced Authorization (VAAI) Score: A generative AI tool that learns individual cardholder transaction patterns to distinguish normal from abnormal spending. It assigns real-time risk scores and reduces false positives in fraud alerts by up to 85%.
- Visa Protect Suite: Recently expanded with three new AI-powered solutions to block fraud in immediate payments, non-Visa card transactions, and account-to-account transfers.
- Advanced Risk and Intelligence Center (ARIC) Risk Hub: An adaptive AI system that has helped banks significantly reduce phishing losses.
AI in Commerce and Payments
Visa is integrating AI to revolutionize shopping and payments through intelligent agents:
- Visa Intelligent Commerce: Launched in 2025, this initiative enables AI agents to search, recommend, and complete purchases on behalf of consumers based on pre-set preferences. It securely integrates with Visa’s payment network and opens the network to developers, allowing AI to handle seamless, secure transactions.
- This builds on broader efforts to transform digital payments, making them smarter and more personalized.
Other AI Applications in the Payments Industry
Beyond Visa, AI is transforming most aspects of the payments ecosystem, often for the better. Here are some key examples:
Personalization and Customer Experience
AI tailors payment options and recommendations based on user behavior:
- Klarna integrates ChatGPT Enterprise to curate personalized product suggestions and payment plans from shopping history, boosting sales and customer engagement.
- Razorpay‘s AI systems analyze spending habits to offer customized discounts, promotions, and payment plans, increasing loyalty.
- Checkout.com uses predictive analytics on historical data to forecast customer behavior, enabling tailored pricing and deals during checkout.
Automation of Processes
AI streamlines back-end operations, such as invoicing and reconciliation (accounts payable/receivable).
Customer Support and Chatbots
AI-powered assistants handle inquiries efficiently:
- Checkout.com deploys AI chatbots with natural language processing to resolve payment-related questions during checkout or invoicing.
- In interactive voice response (IVR) payments, Razorpay’s AI enhances voice systems for 24/7 support, escalating complex issues to human agents.
- Stripe integrates GPT-4 to scale support functions and detect service violations.
In summary, AI is reshaping the payments landscape—from fraud prevention and operational efficiency to customer experience and innovation.
