The future of payments: How AI is redefining agility for SMBs

This technology evolution is significantly enhancing business agility, particularly by integrating Generative AI into payment systems. By automating payment processing and deriving consumer insights from payment data, Generative AI is reshaping SMB operations, enabling them to become more agile and better equipped to meet the demands of modern commerce. Here are three ways Generative AI is changing the game for SMB payments:

Transforming payment efficiency

One of the areas in which Generative AI can create the most impact is optimising payment processes; transforming how SMBs handle transactions. By automating routine tasks such as invoicing and reconciliation, Generative AI frees up human resources for more strategic activities, driving growth and innovation. This automation not only reduces workloads but also minimises human errors, ensuring transactions are processed accurately and consistently.

Moreover, AI algorithms streamline payment routes by selecting the most efficient pathways for transactions, significantly reducing delays and costs. Financial ecosystem players, such as banks and fintechs, are exploring Generative AI methods to accelerate banking transactions, which has the potential to enhance SMB operations. With 34 per cent of consumers seeing faster banking transactions as an appealing benefit of Generative AI, SMBs should leverage current and future Generative AI-powered payment solutions to meet their needs.² Overall, the integration of Generative AI into payment processing empowers SMBs to achieve greater agility and operational efficiency in today’s dynamic business environment. 

Elevating consumer payment interactions

Generative AI also has the potential to transform how SMBs in the Asia Pacific region approach consumer engagement by providing valuable insights and personalised experiences. Through AI-driven analytics, businesses can gain detailed insights into consumer behaviour and preferences, enabling them to make smarter business decisions. By rapidly analysing card spend data, for example, AI empowers SMBs to offer timely recommendations tailored to consumers' shopping preferences. This level of insight allows businesses to adapt their offerings to better meet consumer needs, ultimately driving sales and enhancing competitiveness.

In addition to providing insights, Generative AI enables businesses to offer targeted consumer experiences through customised payment solutions. These can include tailored payment plans or rewards programmes, which enhance consumer satisfaction and foster loyalty. In Southeast Asia, nearly two in three consumers view Generative AI as beneficial to their retail experience, and over a third have already experimented with such applications in personal shopping.³ This growing interest presents a significant opportunity for SMBs to focus on. Personalised approaches will improve the consumer experience and enable SMBs to thrive in a competitive market landscape.

Empowering smarter financial management

Financial management for SMBs is another significant area for Generative AI transformation. For SMBs in the region, the technology can dramatically enhance their ability to monitor cash flow, manage expenses, and make informed decisions. With real-time cash flow monitoring, businesses can swiftly respond to financial fluctuations, ensuring liquidity and operational stability. This capability is crucial for maintaining a healthy financial position and supporting growth initiatives. Additionally, AI tools are adept at identifying cost-saving opportunities and optimising spending patterns, allowing businesses to allocate resources more efficiently and strategically, ultimately driving profitability.

Moreover, Generative AI empowers SMBs to harness predictive analytics for data-driven insights, enabling them to forecast future financial scenarios and plan effectively for various contingencies. This proactive approach to financial management not only enhances decision-making but also positions businesses to capture emerging opportunities. To unlock Generative AI’s potential in financial management, Visa has invested USD100 million to support companies that develop AI solutions for commerce and payments.⁴ This significant investment will drive Generative AI innovation aimed at equipping SMBs with innovative tools to navigate uncertainties and thrive in Asia Pacific.

As the development of Generative AI technology accelerates, it is increasingly important for SMBs to embrace these innovations, particularly in the realm of payments. SMBs should proactively identify areas for improvement within their current payment processing, consumer engagement, and financial management processes. By thoroughly assessing these areas and pinpointing existing gaps, SMBs can gain a clearer understanding of how Generative AI applications can be effectively deployed. With these insights, they can seek out the right partners in the ecosystem, such as financial institutions and payment networks, to leverage Generative AI payment solutions to close these gaps. 

This strategic approach will enable SMBs to build more agile and efficient payment systems, ultimately fostering greater growth and positioning them for long-term success in the dynamic business landscape.

¹ Visa, Empowering Agile SMBs through Innovation and Entrepreneurship, 2024.

² PYMNTS.com, Visa, Taulia Team on Embedded Finance as Credit Grows Scarce, 2024.

³ Visa, Visa Consumer Payment Attitudes Study 2024, 2024.

⁴ Visa, Visa Consumer Payment Attitudes Study 2024, 2024.

⁵ Visa, Visa Singapore Innovation Center ushers in a new era of payments, 2024.