In the movie Bicentennial Man, Robin Williams played Andrew, a robotic household assistant. Andrew’s initial interactions with his owners are awkward and tentative. However, over the next 200 years, he develops increasingly human characteristics and forms powerful emotional bonds. Eventually, he finds true love and marries Portia, his original owner’s great-granddaughter.
While we’re still a long way away from having humanoid robots in our households – let alone robots that fall in love and get married – talking to inanimate objects has become mainstream. Siri, Alexa, Google Assistant, and others have found their way into every device imaginable, from smartphones to speakers, watches, light bulbs, and even vacuum cleaners. The technology is also continually improving: Amazon’s Alexa now has 25,000 skills, while IBM’s speech recognition algorithm has managed to set a record low 5.9% error rate (the human error rate is 5.1%).
Globally, 600 million people use a voice assistant at least once a week, with ample opportunity for further growth. But will this enthusiasm for voice-controlled devices have an impact in the retail sector, and will this give voice-activated payments the upper hand over other digital payment methods? Or is voice technology still too young to be trusted with our money on a large scale?
From early adoption to mainstream appeal
Consumers’ dislike of friction is well-documented. And retailers have had to adapt to this new reality by offering increasingly seamless online and offline experiences and more payment choices. But, it looks like we’re moving towards an even bigger shift.
A recent report shows 60% of consumers now take issue with the act of shopping itself, finding it unproductive, inefficient, time-consuming and boring. By nature, voice technology taps into this zeitgeist by giving consumers the ability to instruct inanimate objects to do the jobs you don’t want to do. By eliminating our need to participate in the actual act of searching for a specific product, comparing prices, paying, and arranging delivery at a convenient time and place, voice technology could potentially re-shape not just the way we pay for our goods, but the entire shopping experience.
However, consumer confidence has some way to go. A survey of the UK payments landscape, Lost in Transaction, found while 74% of consumers have heard about voice technology, only 15% have actually used it to make a payment.
Familiarity, trust, and the road to consumer confidence
Part of the issue consumers have with voice-controlled payments seems to be down to a lack of familiarity – Lost in Transaction found 39% of respondents see the technology as being simply too risky and unknown.
As our daily exposure to the voice technologies continues to increase, familiarity issues should become less of an objection, and consumers will become more open to giving voice-activated shopping a try. There is still some way to go on this front as only 9% of UK households owned a smart speaker in 2017. However, penetration is expected to hit 40% in 2018. And the number of Brits who make voice payments is also expected to triple.
Early movers can expect to gain a significant competitive advantage simply by being the first in the space. Case in point, a recent survey found that Siri is the voice assistant most trusted to make payments securely, while Amazon’s Alexa is second. The less known Microsoft Cortana and Samsung’s Bixby, which only launched in mid-2017, trail considerably behind. As Amazon’s Alexa Super Bowl commercial shows, there is big money being invested in growing familiarity and trust amongst shoppers.
Security and privacy: A stumbling block
While the increasing penetration of, and familiarity with, voice technology into 2018 and beyond will grow trust amongst consumers, it’s not the only issue that has to be addressed.
According to Lost in Transaction, 25% of consumers are worried about security and privacy, even though they can appreciate the benefits offered by voice technology. Brits in particular seem especially concerned, while in another study, 43% of respondents worried voice assistants could be used to listen in on their private conversations.
These concerns aren’t entirely unfounded. Researchers at Zheijiang University have recently developed a proof-of-concept attack which, while entirely theoretical, shows it might be possible to use inaudible voice commands to control voice activated devices. A BBC journalist’s twin has also managed to fool voice recognition software simply by mimicking his brother’s voice, even though the technology uses more than 100 identifiers to confirm the speaker’s identity.
Such incidents do shed doubt on voice’s suitability as the sole biometric identifier in a retail transaction. So, in future, we could well see the technology being strengthened by additional authentication, such as fingerprint or face ID.
With the technology evolving at a rapid rate, it’s too early to tell where voice-activated payments could go next in retail. What’s for sure is that they hold great potential. They’re convenient. They save consumers time. And they promise to take the frictionless shopping experience to the next level, ushering in an era where we don’t have to lift a finger to make our purchases.
The challenge is to address consumers’ security and privacy concerns, ensuring voice-activated payments offerings aren’t just the easiest and fastest ways to shop, but also the safest.
Author: Danny Chazonoff, the chief operating officer of Paysafe.