Voice technology is transforming our lives in many ways, assisting us in spheres like cybersecurity, customer service, healthcare, and beyond. The finance sector has also adopted voice-based solutions, enabling consumers to make money transfers, conduct purchases, and pay their bills.
As the number of people turning to voice-enabled purchases keeps growing, experts debate whether it is just a mere trend that will last only for a short while or if such transactions will become an integral part of our everyday lives. Let’s take a closer look at voice-based payments and determine whether their pros outweigh the cons, making them viable for long-term adoption.
How Do Voice-Enabled Payments Work?
Voice transactions are conducted by speaking to a device, such as a digital assistant or a smartphone. As soon as the user gives a voice command, the device recognizes it and opens an app to confirm the action. The consumer can authorize the payment by typing in a password, using the face recognition function, or performing a fingerprint scan.
The AI-based technology implemented in such transactions is called Natural Language Processing (NLP). Voice assistants, like Alexa from Amazon and Siri from Apple, utilize NLP to convert human speech from analog to digital form, receive and interpret information, and react to spoken commands.
Some examples of voice-based transactions are:
- Conducting P2P transfers through platforms such as PayPal and Venmo
- Paying for products at land-based locations, like when buying fuel at Exxon and Mobil gas stations with the help of Alexa
- Making purchases at online stores
- Initiating payments for invoices and bills
- Covering card debt
As the technology evolves, users can expect an even wider application of voice payments.
The Growing Popularity of Voice-Based Transactions
In 2021, in the US alone, 45 million adults used voice assistants to shop for products at least once. In contrast, in 2018, only 20.5 million US adults claimed to have used voice commands for shopping purposes. This represents a 120% growth in the number of adults using voice on their devices at a 30% compound annual growth rate1
What’s more, the popularity of voice-enabled payments is expected to keep increasing. By 2030, their market value is forecasted to reach $14.66 billion, expanding at a CAGR of 10.9% from 20222. But which factors influence such high adoption rates?
Benefits and Challenges of Voice-Enabled Payments
Voice payments are said to be driving the revolution in FinTech. Yet, while this technology features a plethora of benefits, there are still aspects of it that make it less appealing to consumers.
Without further ado, let’s have a look at the main advantages and downsides of voice-enabled transactions:
Some of the main benefits of voice-based payments are:
- Convenience. Voice recognition technology enables users to make payments conveniently wherever they are. A recent survey in the US has shown that 51% of respondents conduct voice transactions from a vehicle, 39% do it from home, 6% make such payments in public, and only 1% - at work3.
- Faster checkout. Saying a command is a lot easier and faster than having to type card data and account numbers, making the voice-enabled payment experience completely hassle-free.
- Advanced consumer support. Consumers get frustrated with unintuitive software, which can be the case with some online payments. Voice-activated devices solve this issue by not only providing information and performing tasks quickly but also by being able to detect intonation. When a client sounds angry or dissatisfied, voice assistants can instantly transfer them to a live agent, thus preventing a negative customer experience.
- Fraud reduction. Voices are as unique to humans as their fingerprints, with aspects such as timbre and pitch making them impossible to be mimicked. This makes authentication that uses voice recognition extremely secure.
- More accessible mobile banking. The absence of the need to see or touch the screen to access mobile banking services makes voice-enabled solutions an excellent tool for sight-impaired consumers.
Despite the great number of benefits associated with voice payments, there are also some challenges that slow down the adoption of this technology:
- Security and privacy concerns. Only 37% of consumers think their financial data is as secure when they make a payment via a Smart Home device as when they place an order at an eCommerce platform4. Such concerns, alongside a common notion regarding applications recording conversations without consent, create a significant delay in the adoption of voice payments.
- Difficulties with understanding accents. Voice assistants aren’t perfect when it comes to understanding accents. So, while a person with a standard American accent would not experience any inconveniences, the queries of non-native speakers could be misunderstood by voice-enabled devices.
- Costly integration at land-based locations. Another stumbling block on the way to the mass adoption of this technology is the cost of replacing hardware and software for voice-enabled solutions at brick-and-mortar stores and financial institutions.
Are these drawbacks enough to prevent voice payments from becoming mainstream one day? Read ahead to find out!
What Is the Future of Voice Payments?
Changes in the payment industry are often powered by shifting consumer behavior. The modern lifestyle and the rise of demand for eCommerce are sure to be in favor of voice-enabled payments in the long term.
While currently voice transactions are used mainly for low-value transactions, such as ordering lunch and grocery shopping, the share of bigger payments is expected to grow as the technology evolves and more and more people familiarize themselves with such solutions.
All in all, the convenience, accessibility, and speed of voice payments are sure to earn them a high global adoption rate. So, whether you’re dealing with online or offline sales, make sure to hop on this trend, as it’s here to stay.
1 - Voicebot - Voice Shopping Rises to 45 Million U.S. Adults in 2021
2 - Grand View Research - Voice-based Payments Market Growth & Trends
3 - Business Insider - People aren’t comfortable using virtual assistants like Siri and Alexa in public
4 - Nocash - Half of consumers would use voice to pay for low value goods, research finds