AI-based advanced analytics is making credit, debit cards smarter

For instance, Philadelphia-based fintech firm cred.ai, which launched its ‘Unicorn Card’ two years ago, uses a credit optimizer tool. The card was licenced by payments network Visa and issued by Wilmington Savings Fund Society, FSB. The credit optimizer tool uses an AI algorithm to improve the user’s debt-to-credit ratio, which accounts for up to 30% of a FICO score that evaluates a person’s creditworthiness in the US. Apple, too, uses AI to determine a user’s credit limit on the Apple Card.

Closer home, Gurugram-based fintech firm OneBanc has developed a card to connect various banking systems. The company, which counts 60 corporates among its partners for providing cards on employees’ salary accounts, claims the card brings all of the employee’s payments into one. OneBanc’s card uses the company’s smart platform to include employee benefits like meal balances on a single card. When the card is swiped, it takes a decision in real-time about what balance to use for making the payment.

OneBanc has already partnered with RuPay and Visa, and said its “AI Card” will hit the market in the next four to six weeks.

Vibhore Goyal, founder and chief executive of OneBanc, explained that the problem with banking right now is that different systems like credit cards, pre-paid cards, etc., are not connected. According to him, when banks issue credit cards on fixed deposits (FDs), for instance, the system is manually programmed to disallow customers breaking the limit. “Those two systems are not talking to each other. It’s a manual process to settle bill from the FD to the credit card, even in case of any defaults,” he said. “Our AI-powered systems enable this fragmented banking system to communicate in real-time,” he added.

The card can also connect with a company’s human resource (HR) and finance platforms and make recommendations based on them. For instance, it can recognize a recurring payment a user makes every month and start suggesting that payment at the prescribed time on a monthly basis.

Goyal also said that AI helps enhance security on the card. The AI Card doesn’t have magnetic stripes, instead embedding the card data on a Europay, Mastercard, Visa (EMV) chip. When transactions are made, the AI records location data, and takes into account information like a user’s travel information, employment profile etc. to detect possible frauds.

Likewise, Bengaluru-based Scienaptic AI said this January that payments provider Uni Cards would use its AI algorithms to provide a “refined application process” to its users. “Our credit decisioning platform allows Uni Cards to experiment, test-and-learn faster, and over time, build the best decisioning strategies for their customer segments, balancing growth and profitability,” said Pankaj Kulshreshtha, chief executive of Scienaptic.

According to Mihir Gandhi, partner, Payments Transformation at PwC, a couple of major private sector banks in India too have already been working on using AI to predict the payment methods that would be most suited to making a payment.

“Even if you look at non-financial companies, like say Amazon, which has my payment details saved. When I’m doing a transaction on Amazon, it suggests a preferred payment option,” said Gandhi.