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use your voice

What Gives in Voice Authenticated Payments

Voice technology has, in the span of just a few years, spread far and wide, hand in hand with the spread of smartphones, smartwatches and other "smart" devices. The dreams of the generations of our parents and grandparents - devices that respond to our voice commands - have become an everyday occurrence most of us no longer pay any special attention to anymore.

Talk to Your Phone Much?

Alexa, Siri, and Google Assistant will respond to our voice and can perform a variety of functions: play music or movies, turn the lights on and off or dim them, close or open the window blinds but also search the Internet for us, book us a flight or a hotel room, call for an Uber, and order food from the restaurant of our choice. 

At the same time, Samsung's Family Hub refrigerators already allow you to shop for groceries directly from the fridge. Some companies are taking further steps and moving voice payments outside your house.

In 2018, Chevrolet and Shell piloted a project integrating payment technology with certain Chevrolet car models, allowing for gas pump payments without leaving your car or taking out your wallet.

According to Voice Report 2019 by Microsoft and Bing, Google Assistant and Apple's Siri are each used by 36% of the people surveyed, with Amazon's Alexa trailing behind at 25% and Microsoft's Cortana at 19%.

A high 80% of the surveyed report being satisfied with their digital assistant, with 57% engaging with it using only voice commands. Some of the most frequent uses of digital assistants include: searching for quick facts (68%), asking for directions (65%), searching for a product or service (52%) or a business (47%). Adding items to an online shopping cart is at 26% and making a purchase at 25% with a marked tendency to grow.

Among the surveyed, 54% own smart speakers and use them to manage their home, with Amazon's Echo being the most popular in 2019, taking first place from Google Home speaker. The most reported uses include playing music (63%), managing lighting (57%) and managing security systems and controlling thermostats (38% and 37%, respectively).

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Speak, Friend and Pay 

And yes, voice technology can also be used to perform money transactions - in fact, some experts predict voice technology is set to pose a serious threat to traditional payments. Venmo and PayPal have already integrated voice payments into their platforms and more are expected to follow.

According to a study by OC&C Strategy Consultants, the largest percentage of voice payments 20% is for grocery shopping, followed closely by entertainment and electronics. Another study by PYMTS.com and Visa in 2019 discovered that 31% of consumers own a voice-connected device such as Amazon Echo or Google Home and that 31% of those device owners make purchases through said devices. Overall, the amount of total voice purchases increased from 2018's 7.7% to 9.6% in 2019 and the trend is expected to continue in the years to come.

It is easy to see how voice payments taking a top spot might come to pass in the very near future: with over 3.2 billion voice assistants in use today, numerous financial institutions and FinTechs are moving into voice payments to provide customers with faster and easier options for checking their balance, pay bills, obtaining credit or transferring money. 

Also, the development of AI and machine learning is expected to improve the voice services.

It is expected to increase a bank's voice recognition software's ability to understand accents, dialects and intonation, making for a smoother interaction with customers. While this software is not aimed at removing the need for a human operator, improvements can make the automated system a more efficient aid when it comes to routing calls and detecting problems.

Do You Believe Everything You Hear? 

Voice technology in payments, of course, means voice authentication as a biometric security measure. While it does remove the burden of remembering PINs and passwords and eliminates the need for security questions usually used to validate customer identity, there is still the issue of adoption, despite the convenience.

First and foremost, voice technology in general is most appealing to younger people, with 18 to 34 demographics still its biggest user and older people being much more reserved towards Siri or Alexa.

Fingerprints are also more widespread as a biometric security measure, because they seem much more "concrete" than a voice, and facial recognition is likewise currently more in favor than voice authentication. 

However, these concerns are present with any new technology and, with voice assistants making people increasingly comfortable with their dependability and ease of use, it is inevitable that trust in voice payments will increase as well.

In fact, OC&C Strategy Consultants' study projects a staggering increase in the value of voice-based payments, with the annual payment volume jumping from $2 billion in 2018 to $40 billion in 2022. Business Insider sets the growth of voice payments in the US from 8% to 31% of adults by 2022 - and points to voice-enabled devices and development of AI as main factors behind this growth.

There are also security concerns. PaySafe's study discovered that only 37% of those surveyed felt comfortable with voice payments' ability to keep their financial data secure.

And security definitely is a big point with voice payments now that deepfake attacks can occur. Deepfake is a technology that uses artificial intelligence to create very convincing forged images, video and audio content. 

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While it gained notoriety with use in fake news and hoaxes, deepfake has also become a tool for financial fraudsters who can use it to, for example, fake a company executive's voice and order wire transfers.

According to the Biometric Updatedeepfake claimed its first victims in August 2019 “with a British energy company defrauded of nearly a quarter-million dollars through a wire transfer ordered by what seemed from the voice to be a company executive”.

The CEO of the company thought he was speaking on the phone with the chief executive of the firm’s German parent company, who asked him to urgently send the funds to a Hungarian supplier, according to their insurance firm. The same insurance firm said the fraud was done by using software that can mimic voice, tonality and punctuation.

In the end, no suspects were unfortunately identified, according to the Wall Street Journal, which could pose a big law-enforcement problem in the future as AI crimes have not yet been deeply regulated.

If this happens with voice mimicking, will it affect voice payment market? Luckily, governments and fintechs are already working on developing programs to prevent this kind of fraud. Amazon, Twitter and Facebook have taken steps in deepfake detection. Amazon Web Services has announced it is joining Facebook, Microsoft, academics and other experts to encourage innovation in deepfake detection.

In addition, security experts have been on the case for quite some time, with the likes of Pindrop developing systems that can detect fake audio content with over 90% accuracy, the AI Foundation and the Technical University of Munich teaming up to combat deepfakes, and Microsoft Research reaching out to Peking University for a joint deepfake research program.