Fraud detection services have long leaned on computer programs to sift through millions of transactions to spot anything out of the ordinary. Generative AI could turbocharge that process, analysts wrote. 

Additionally, AI can automatically match payments processing with outstanding invoices, reducing the amount of time it takes to transfer money between businesses, the firm said. 

While generative AI has made headlines in recent years for its conversational and writing skills, payments companies will largely use the technology to do what they already do, but better, the report said. 

For example, banks have programs that monitor activity on credit and debit cards as well as checking accounts for unusual purchases and transfers. 

Companies like Visa and Global Payments, a fintech firm based in Atlanta, for example, already have those kinds of fraud detection services, but are now able to spot fraud with greater efficiency, New York City-based Jefferies said in the report. 

“(Visa) has used GenAI to expand its fraud expertise from cards into account-to-account payments, while (Global Payments) has shared that its GenAI-enabled fraud detection solution for its Issuer business has driven a 50% reduction in fraud losses for customers using the solution,” the research report said. 

Generative AI may also improve the services available to small and medium-sized businesses. 

Artificial intelligence tools can help sellers set prices, better position menus on their websites and allocate spending in a more efficient way, Jefferies analysts wrote. 

Vendors that provide services to other businesses may also find themselves getting paid faster. Artificial intelligence can match bills with payment methods in an instant, ensuring that invoices are taken care of the moment they are submitted, according to Jefferies. 

The Milwaukee, Wisconsin-based fintech company Fiserv, which is one of the companies singled out in Jefferies’ report, said in a statement that it uses AI to automate tasks like “dispute resolution and device installation.” 

“With machine learning, we elevated our application of AI to serve clients by enabling faster handling and more accurate resolution of customer service calls, and we have plans to create more client-focused capabilities,” the statement said. 

The Jefferies report, however, notes that companies using artificial intelligence must be aware of the risks. 

Artificial intelligence programs like Google’s AI search tool have told users to put glue on pizza and eat rocks, and AI chat bots like ChatGPT are prone to fabrications. 

AI used for payments can also make mistakes, and companies that use it must be prepared for eventualities like coding errors.  

Additionally, the legal responsibility for mistakes made by AI systems is also unclear, the report said.