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How Visa Is Using AI-Powered Services to Solve Complex Payment Problems

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In recent times, financial systems have witnessed immense transformation and improvement as cutting-edge technologies, like AI, are being intertwined with financial services to improve the quality of services that are provided by financial institutions. 

Payment technology giant, Visa, recently launched a suite of AI-powered services—VisaNet+AI— to address payment challenges that banks, merchants and consumers face. VisaNet+AI features new innovative and value-enriched services, including Visa Smarter Posting, Visa Smarter Settlement Forecast, and Visa Smarter Stand-In ProcessingThe (STIP). 

Before the introduction of VisaNet+AI, Visa has been a key player in terms of integrating AI features into financial services, with previously existing AI-powered services like its sophisticated AI-powered credit application fraud prevention tool. However, VisaNet+AI stretches beyond the previous capabilities of Visa’s AI-driven services.

Visa Smarter Posting

The Visa Smarter Posting service helps to reduce the lag that occurs during customer transactions when payments take long to finalize. The

Smarter Posting service dynamically updates the account balance of customers, thereby, providing real-time visibility of funds. This service is very useful in cases where the account balance of customers change between the checkout and a customer’s statement balance, for example, when a cross border payment involving multiple currencies is made. The Visa Smarter Posting service will help to prevent overdrafts or negative balances that occur when funds are yet to be settled in the bank account, enabling a dynamic synchronization of bank balances. In cases like this where transactions are yet to be settled or finalized, the service will effect a provisional update of the customer’s account balance so that customers can know how much exactly they have left and enjoy a seamless payment experience.

The Smarter Posting service uses AI to provide a customized score for each transaction during the authorization process. The Smarter Posting model predicts the likelihood that a transaction amount will be consistent through the clearing process, based on an analysis of historical data.  The model achieved an accuracy of 98% when tested to predict whether a transaction amount will remain consistent.

The Smarter Posting service will be available in Europe by April 2021 before expanding to other regions.

Visa Smarter Settlement Forecast

The Smarter Settlement Forecast service provides a solution to the challenge that financial institutions face in predicting the volume of cash that will be needed to meet the settlement volume of each day. The service provides a customized 7-day forecast of the amount that clients will need each day for payment settlements. 

Using data on historical settlement volumes, major trends, seasonal indicators like festive seasons, outlier events like in the case of Covid-19, and real-time transaction data, the Smarter Settlement Forecast is able to provide quality predictions of cash flow needed by clients each day. 

Visa Smarter Stand-In Processing(STIP)

Visa Smarter STIP, the first of the VisaNet+AI services, was announced in August 2020. The Smarter STIP harnesses the power of deep learning to assist financial institutions in the authorization of transactions during outages. 

Smarter STIP is capable of generating well informed decisions to facilitate the approval or decline of transactions on behalf of issuers. This provides customers with a seamless payment experience with Visa. 

With VisaNet+AI, the Visa team is just beginning the journey of developing innovative AI-powered solutions to payment challenges. In the words of Jack Forestell, executive vice president and chief product officer, Visa, on behalf of the Visa team, “With our investment in AI infrastructure, we’re unlocking novel, real-time solutions to complex problems. This is just the beginning of what we can do with the predictive power of AI.”

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Kehinde is a driven human who is passionate about leveraging technology to transform the future of humanity and the way we all live. His interest lies in constantly getting valuable information and being part of a mission that seeks to create a transformative radical shift.

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Crypto Assets

Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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Bitcoin in Africa

The rise of CBDC in African economies

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Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

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Bitcoin trades above $51k ahead of El Salvador’s adoption

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Bitcoin growth

Bitcoin price has rallied above $51,000 ahead of El Salvador’s adoption. The immediate surge in price may be due to the social media campaign that everyone should buy sats of Bitcoin to support El Salvador’s plan to make the coin a legal tender or it may be due to the news of El Salvador’s adoption of the coin as a legal tender on September 7. Users of social media platforms like Twitter and Reddit are discussing how they will buy Bitcoin of $30 each to mark the new El Salvador Bitcoin law.

The surge in Bitcoin’s price began in the last 24hrs with the price rallying around $51,955 with a 3.37% increase. This is an all-time high after the April crash that brought the price of Bitcoin from $64k down to $28k. The move by El Salvador to be the first country that accepts Bitcoin as a legal tender and the social media campaign that leads to a surge in price ahead September 7 are a repetition of events that occurred late last year and early this year with regards to institutional investors and how the price of Bitcoin skyrocketed.

El Salvador, a country in Central America, has been preparing heavily to adopt Bitcoin by installing ATMs to allow citizens to convert the token into US dollars. Last week, the country’s Legislative Assembly passed a law to allow for the creation of a $150m Trust to support the conversion of Bitcoins to US dollars.

To promote the use of Bitcoin, the government states that it will give the adult population of El Salvador $30 in Bitcoin once they download “Chivo” the wallet issued by the government. This was confirmed by the Finance Minister, Alejandro Zelaya.

What this means for Bitcoin investors

Apart from the adoption by Salvadorians, on-chain analytics show that Bitcoin is in high demand. The fourth halving that occurred will make Bitcoin become a scarce token in the nearest future. Thereby increasing the price sporadically.

With El Salvador’s interest in Bitcoin, other countries are likely to follow suit- Panama is considering following El Salvador’s lead. History will repeat itself as this development will serve as another crypto rout that occurred early this year when Tesla and MicroStrategy announced their support for Bitcoin.

El Salvador’s new law allows the use of Bitcoin as a legal tender it can be used to buy goods, pay for taxes and bank loans. This means more demand for Bitcoin, with the fourth halving that occurred, it means less supply. A common rule of economics for demand and supply will apply. Prices are projected to keep rising. At the time of writing this report, Bitcoin is trading at $51,839 with a projection of $52k before the end of today and higher tomorrow when Salvadorians begin to use the token.

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