When money talks: All you need to know about voice-based payment method

Money talks and consumers can now put money where their mouth is. The increasing acceptance of voice-based payments is adding an exciting new dimension to digital finance. 

In the technology’s simplest form, consumers give voice commands on apps and devices for making payments. It’s the next step after single-tap payments enabled billions of transactions. 

The Reserve Bank of India (RBI) is encouraging voice as a mode for payments, announcing a new step for using the technology. "With the objective of harnessing new technologies for enhancing the digital payments experience for users, it is proposed to (i) enable “Conversational Payments” on UPI [unified payments interface], which will enable users to engage in conversation with AI (artificial intelligence)-powered systems to make payments; (ii) introduce offline payments on UPI using Near Field Communication (NFC) technology through ‘UPI-Lite’ on-device wallet; and (iii) enhance the transaction limit for small value digital payments in offline mode from Rs 200 to Rs 500 within the overall limit of Rs 2000 per payment instrument,” said RBI Governor Shaktikanta Das in a statement. “These initiatives will further deepen the reach and use of digital payments in the country.”

The global market for voice-based payments is expected to reach $34.02 billion in value by 2030, according to a new study by Polaris Market Research. Voice-based payments are becoming more popular worldwide as they allow users to perform transactions more quickly and easily, which in turn is propelling the industry forward, the study said. 

A separate study by Grand View Research said that several banks, including Barclays and Royal Bank of Canada, have started offering voice-enabled peer-to-peer payments to their customers. Barclays allows its customers to make voice-based payments using Siri, the virtual assistant offered as part of Apple Inc’s operating systems. Google Assistant allows Google Pay users to make peer-to-peer payments using voice command. Amazon’s Alexa is enabled for voice transactions. Users can give commands for payments after connecting their Amazon Pay accounts to Alexa. 

A similar process will work for UPI-based transactions in India. It will allow people in rural areas who may have language limitations to use voice for transactions. PhonePe, the digital payments firm, has launched a service by creating voice-based alerts for payments. Merchants will be alerted of transactions by voice in different languages. 

The integration of voice-based payment systems in cars is emerging as one of the major factors driving the growth of the market, said the Grand View Research study. New services will allow drivers to use voice assistants to pay for fuel and make reservations in restaurants while driving. Amazon has launched Alexa Custom Assistant, a service that allows device manufacturers and automakers to build their digital assistants. Many automakers are developing intelligent digital assistants for their cars.

Voice-based transactions herald a new era in the financial world and many new uses for them will be developed soon. However, this is also the era of deep fakes where AI can copy everything. Fake voice technology is becoming as much of a challenge as deep-fake videos. Regulators are aware of frauds where people receive calls from fraudsters in the voice of their friends or family members. AI-based voice cloning technology is easily available and improving steadily. As the use of generative AI grows, voice is the next big frontier of security in the digital world. As voice-based financial transactions gain ground, a parallel effort is needed to protect consumers. Regulators, industry and technology companies will need an urgent action plan to ringfence voice-based transactions.

Talking to transact should not turn out to be terrible for unsuspecting consumers.