Artificial intelligence (AI) has become institutionalised at Visa, and the firm is judged to be leading the way in the payments sector.
AI benchmarking firm Evident ranked Visa number one in its AI Index for Payments, as a result of the payment card services provider’s shift from individual AI use cases to “institutional capability”.
Mastercard came in at number two, while PayPal took third spot in the index of 12 payments companies, which documented nearly 100 use cases for AI in the payments sector.
But, according to Evident, payments firms have not detailed their return on investment from AI spend, unlike banks.
Indexing AI success
The index took into account four factors: talent, innovation, leadership and transparency. According to Evident, Visa demonstrates the clearest evidence that AI is institutionalised across its core transaction network.
“What sets Visa apart is the degree to which the company is demonstrating impact at scale over multiple years from applications of AI across its operations and network,” said Evident co-founder Alexandra Mousavizadeh. “It signals a shift from individual use cases to AI as an institutional capability.”
Payments firms adopted AI out of necessity long before many other industries. Those that invested early, like Visa and Mastercard, have gained a clear advantage over their peers Alexandra Mousavizadeh, Evident
She added: “Payments firms adopted AI out of necessity long before many other industries – their business models demanded it. Companies that invested early, like Visa and Mastercard, have gained a clear advantage over their peers, both in AI capabilities and the value their deployments are realising.”
The payments sector’s maturity in AI has seen it build large teams of experts. According to Evident, payments companies, on average, have 30% more staff focused on AI than other finance firms.
For example, Visa, Mastercard and American Express, which was ranked fourth, account for nearly half of the payments industry’s AI talent.
It is this level of maturity that, in 2023, enabled Visa to begin offering its customers AI advisory services through an operation dedicated to the technology. As part of Visa Consulting and Analytics, its AI Advisory Practice uses the skills and experience of its experts across the world to help customers use AI to grow their businesses.
Ranked third in the index, PayPal is the single biggest employer of AI talent in the payments market, accounting for 18% of the total.
Evident said PayPal’s deep AI talent pool has allowed it to exceed Visa and Mastercard in the number of use cases it has documented over the past two years, accounting for 24% of the 98 AI use cases documented by payments firms over the past two years.
Where is AI?
Use cases highlighted as successful by payments firms include using AI to block money laundering and aid fraud detection, with Visa claiming an 85% increase in money laundering attempts being blocked with AI and MasterCard saying fraud detection rates were up 300%.
But unlike banks, Evident said that no payments company has disclosed realised or projected return on investment across all AI investments.
Evident co-founder Annabel Ayles said this is “increasingly conspicuous”.
“While one in five banks now report on group-level AI returns, payments firms have yet to quantify the aggregate impact of their AI investments. To keep justifying this expenditure, the market will sooner or later demand clearer evidence of value,” added Ayles.
