Voice Activated Payments In Banking
Amazon’s new proprietary virtual assistant Alexa — a feature of their Amazon Echo and Fire TV media hardware — has acquired a new skill, one that signals a possible revolution in banking: voice-powered financial management. In addition to simply checking account balances and payment schedule, Capital One customers can now authorize payments to their accounts as well.
“More and more voice experiences are coming,” says Rob Pulciani, director of Amazon Alexa, “and it’s only going to get better for our customers.”
“Google has been piloting a new in-store, voice-activated payments platform.”
The tip of the iceberg
This is only the tip of the iceberg in terms of the emerging world of voice-controlled payment options. While Alexa can already authorize payments for items purchased online via Amazon, Google has been piloting a new in-store, voice-activated payments platform for Android phones called Hands Free. With Hands Free, an Android phone user can simply walk up to to a cash register and verbally say “I’ll pay with Google,” activating a combination of Bluetooth, Wi-Fi, phone sensors and in-store cameras to transmit payment information to the merchant.
The merchant is then given the prompt to match the customer paying with a pre-loaded image of the account holder. Assuming everything looks right, they are then given the option to authorize payment. This is an evolution of the existing Android Pay platform, which has long come in distant second to Apple’s growing Apple Pay platform.
Skepticism
Some, like Forrester Research analyst Sucharita Mulpuru, are skeptical about the need for voice-controlled payments.
“It’s trying to solve something that’s not really a problem,” says Mulpuru. “It’s pretty easy and reliable to swipe a credit card. I don’t know that voice is any better than the current solutions.”
Others, like BankNXT’s Uday Seth, point to the variety of unanswered questions that could “hamstring [voice-payments’] ability to scale and become the primary payment method in stores.”
In particular, Seth points to several potentially major hurdles that the voice-payment platforms have to overcome:
- POS integration. To even have the chance at widespread adoption, the actual POS hardware and software used by merchants needs to be compatible with the technology at play. This means a potentially costly integration of Wi-Fi and Bluetooth enabled technology, with the majority of the expense falling on the merchants enrolling.
- Bank participation. As evidenced by the Alexa announcement, often integration with banking is an issue of licensing. While theoretically a simple Visa or MasterCard deal could open up possibly innumerable banks to the integration, a more limited roll-out could effectively stymie participation in the program.
- Value proposition. For both consumers and merchants, the relative ease of existing payment methods combined with the incremental benefits offered by Hands Free may just not be enough of a strong sell for the program to take off.
Time will tell if indeed voice activated payments become anywhere close to the norm, but the rapid adoption of other mobile payment platforms has led many banks to give pause before openly dismissing the prospect.
