Voice payment technologies: the opportunities, challenges and future trends

The voice has always been one of humanity’s most powerful tools, but what does technology have in store for the human voice? Soon, the ability to check balances, pay bills and make transfers with your voice will be widely available. For businesses, it will bring both opportunities and challenges. But will voice payments offer the benefits many believe it will?

We spoke to a handful of voice payment experts to get their specialist insight:

Voice payment experts
Melinda Ziemer, Director of Marketing at LumenVox
David Linthicum, Chief Cloud Strategy Officer at Deloitte
Dylan Zwick from Pulse Labs
Graeme McLean, Senior Lecturer at University of Strathclyde
Erik Turkington, Vice-President of the Rain Agency
Pavlo Sidelov, Chief Technology Officer at SDK Finance

What are voice payments?

Touted as the new revolution, voice payments are already speeding up banking tasks, from logging in to bank accounts to activating cards and paying bills. Voice assistants have become commonplace in many homes – could any of us live our lives without Google Assistant or Alexa these days? In the US, 128 million people are estimated to use a voice assistant at least once a month, an increase of 11% of previous years.

UK users won’t be far behind as it is a technology that is booming. Its sophistication is increasing to such an extent that very soon, we’ll be asking more than the day’s weather forecast or what the headlines are.

But as Melinda Ziemer, director of marketing at LumenVox tells us, “voice commerce is expected to jump to $40B by 2022”. Everyone with a voice enabled device is using it for a diverse range of activities and searches from playing music to make their weekly shopping list.

The popularity of voice enabled devices cannot be denied. The number of smart speakers in US households has significantly increased in a short space of time. From December 2017 to the same month in 2019, 90 million more smart speakers had made their way into American homes. Arguably, businesses enjoy the smart speaker too.

But is making voice payments something that consumers can see themselves doing? Can small businesses be a part of this payment revolutions?

How voice payments are predicted to change consumer behaviour in the short, medium, and long term

According to consumer behaviour experts, consumers are willing to give voice payments a try. But what does this mean in reality?

David Linthicum, Chief Cloud Strategy Officer at Deloitte, cautiously agrees that voice payments will become mainstream in the coming years, although there are caveats to its use. Four years ago, voice assistants were considered a novelty and yet, a few years on, most households have embraced Google Assistant and Amazon Echo, to name just two.

“In the medium term,” says David “it will become more viable and widely used technology. Arguably, you could make a purchase whilst driving at 60mph or pay a bill on the move without access to a keyboard or having to stare at your phone”.

In the long term, David agrees that the technology will become ingrained into everyday life, “much like chatbots are today. In effect, the ability to pay bills and purchase goods, also with our voice will become second nature”.

Dylan Zwick from Pulse Labs believes that the concerns of people in the post-COVID era will be a factor in driving people forward. But it won’t just be that. “I think the greatest opportunity is in optimizing the automotive experience for drive-through or pick up food orders. Being able to manage all of that via voice while driving home is a big opportunity. Longer term, I think voice pay will be a ubiquitous option, with voice being a biometric identifier, and a way to interact with payment technologies hands-free, which will be more on people’s minds in a post-COVID world”.

Will voice payments benefit small business too?

For small businesses, there are many challenges. We’ve seen how smaller, independent retailers, for example, have felt the hard pinch of lockdown. Trying to compete with giants such as Amazon is almost impossible.

One example is the super-speedy delivery that some orders from the online retailer come with. Whilst some smaller businesses can deliver on next day delivery, same delivery is simply not possible.

Effectively, what Amazon and other retailers offer is convenience. And pretty soon, we could be seeing voice commands that alert Amazon, via its Echo voice assistant, to re-order certain goods or products.

For smaller business, completing with giants isn’t always about trying to outdo them, but leverage the same technologies to their advantage so that consumers will find buying from them just as simple, quick, easy and secure.

Consumers are seeking out small businesses and ethical retailers to buy from, and there are numerous reasons why they choose to do this. But what can put consumers off competing in the purchase process is a clunky and unfamiliar payment system. 

Graeme McLean, a senior lecturer at the University of Strathclyde, believes that this technology will help small businesses compete with multi-national organisations, and the key is the convenience it offers consumers.

David Linthicum also agrees. “The idea is to provide a better consumer experience” he continues “and making purchases easier and more enjoyable. There is a market there for those small businesses that would like to exploit this technology right now”.

But Dylan Zwick from Pulse Labs isn’t so sure. “Honestly, right now I think it’s relatively limited” referring to voice payment technology. “Most of the experimental work will be done by larger companies. Should Starbucks be experimenting with voice payment technology in automobiles? Absolutely. Should a local coffee shop? Probably not. In the future, however, all the smaller businesses will want to and be able to use the same technology as the larger ones” he concludes.

The hurdles of voice payment technology

No new technology is not without its hurdles. Currently, the use of voice payment tech is becoming widespread through the banking and finance industries. For retailers of all shapes and sizes, learning from these early mistakes could pay dividends.

Lack of interoperability has been flagged by many as a key issue. Interoperability is where computer systems or software has the ability to exchange and make use of information, something that is currently lacking within this field. What this means is that the possibility for a small clutch of large companies to expand their footprint in the consumer market, effectively forcing out competitors.

The European Union has itself placed voice payments and assistants at the centre of antitrust investigations. For example, companies can program smart speakers to push all requests to buy a product from a single shopping site, such as Amazon, in effect bypassing competing offers from competitors, including the smaller businesses.

Acting in good time, argues the EU, stops competition from being pushed into a monopoly. But the EU also has concerns around data collection, and whether this gives companies unfair advantages over its competitors.

Think of this as walking into a high street store and seeing two or three brands of the same product. A consumer makes the choice that fits well with them, such as cost. But with voice-assisted technology, a consumer may only ‘see’ what their voice assistant, such as Siri or Google Assistant, are programmed to show them.

Will trust and security be an issue?

Online shoppers and users have learnt to be savvier when it comes to buying online. There are certain trust signals that eCommerce retailers need to ensure are locked into their websites so that consumers are pushed to make the decision to purchase.

But will security be an issue when it comes to voice payment technology? The voice is an underutilised biometric indication. Just like fingerprints, the human voice is unique to each and every one of us. We just haven’t created the technology to unlock it yet.

But voice payment technology is the first step in doing so. Will people trust voice payment? An American survey found that some people were already using the voice payment function but that as yet, trusting the system to make payments that were seen as ‘important’ hasn’t quote risen that high.

A third of the focus group has used it to order and pay for takeout meals with a similar number also using it for groceries and order a book, transportation and homecare items. But that was the level of voice payments purchases as some payments were seen as too big a task. It seems that the issue of control is key to this, hence people had used the system to make small, quick and hard-to-get-wrong purchases.

Trust is one thing, what about the security of voice payment systems? Erik Turkington, Vice-President of the Rain Agency believes that security is manageable. “Voice pins and voice-matching technologies should reduce the likelihood of an unintentional purchase being made – or fraudulently – on a voice-enabled device,” he says, “as long as two-factor authentication is present, using your voice to buy things shouldn’t be significantly more or less risky than through touch/taps or pointing and clicking”.

David Linthicum agrees, “security is the biggest hurdle. Just as people are still suspicious of making payments online, this is still a new technology with the enabling technology such as voice pattern analysis still being improved. I suspect we’ll see a few hacks, and lessons learned, but we do no matter when or what payment technology we leverage”.

But not everyone agrees. “Concerns about security or privacy are overhyped” suggests Dylan Zwick “the hurdle is not privacy concerns but getting the experience right, so it’s delightful and significantly better than what’s currently available. So far, in terms of payments and purchasing via voice, that’s been difficult”.

Melinda Ziemer agrees that it is the consumer experience that will drive voice payments and its success. “People are becoming more and more comfortable with biometrics” she suggests “because they are sick of passwords and PINs, forms of authentication that are just plain hard to remember”. She also points out that accounts with two-step authentication still get hacked.  “With voice pay, we decouple any personal information from the voiceprint, so it’s not connected to anything sensitive or revealing for the consumer. It’s just a bunch of 1s and 0s. It’s much more secure because it’s essentially anonymous in the backend”.

Which industries will be the biggest winners and losers with voice payment technology?

Clearly, the potential for unfair advantage of the big companies over the smaller businesses is concerning.

There’ll be winners and losers with the technology too. Dylan Zwick from Pulse Lab believes that restaurants, especially those with drive-through and pick up options, will be the potential big winners, “also, consumer packaged good brands have an opportunity here if they do it right. For example, I wouldn’t be surprised if Amazon starts adding “Reorder with Alexa by saying X” on the cardboard roll inside paper towels they sell” he concludes.

And SDK Finance chief technology officer, Pavlo Sidelov, believes that it will be “the disruptors who leverage this technology as a force-multiplier for their market. The smaller players will move much faster and be more innovative”. He concludes that the “losers will be the traditional digital payment providers that don’t move to adopt this technology”.

In summary

What we can sometimes forget in the debate around voice payment technology is the consumer, something that Graeme McLean is keen to point out. “Businesses should monitor their customer’s preferences in how they communicate with them. If voice technology is of importance to their customer set, it would be important to consider investment in voice payment technology”.

Consumers are driving the demand for voice payments and technology in many ways. The convenience and ease that comes with using a voice assistant are clear. Adapting how we use this tech is something many customers seem willing to do.

What businesses and innovators need to do now is create systems that are both useful and accessible but that are also secure and trustworthy. Likewise, the user wants transparency and fairness. Voice payments is a technology that is here to stay, we just need to make sure that its power is used correctly by all involved.