Clever or creepy? The problem with chatbot payments

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Despite the best efforts to adhere to good practices, there are always a few bad apples attracted to any new technology. The telephone brought telemarketing. Email brought spam. Doors brought door-to-door salesmen.

Currently we are on the cusp of another tipping point with social media platforms such as Facebook Messenger. What had long been seen as private and personal channels are — whether users like it or not — now open for business.

As some early efforts already show, a ham-fisted approach to in-chat commerce can be as unsettling as finding that a door-to-door salesman has his own keys to your house.

The dawn of chatbot commerce

The initial 40 launch partners for the Messenger platform back in 2015 can be characterized as informational or entertaining, with companies such as ESPN, Imgur, The Weather Channel and Giphy in the lineup. By design, this introduced Facebook users to another dimension to their messaging experience that was safe and fun.
More recently, Messenger has begun introducing commercial partners such as PayPal in 2016 and American Express and Mastercard in 2017. It has also opened up the platform to bots, and reports that there are currently 100,000 that have launched on the platform for interactions such as marketing and delivering receipts.

Today, more than 2 billion messages are sent between people and businesses each month via Messenger, and the rule book for how messaging evolves is effectively a blank slate.

“I remember a couple of years ago I was working on some strategies on mobile apps and we had the same question. What is creepy? What is delightful?” says Matt Miller, vice president of product management at Mastercard.

Miller explains that the industry is still feeling its way and that there will be differences between comfortable and intrusive that are demographic, regional and cultural.

“I think for some generations they are explicitly divided and for others, that’s just the way they interact with the world generally,” Miller said. “For millennials, they are interacting almost exclusively on the phone and email is antiquated. The fact that your commerce life and your personal life overlap there makes sense.”

But not everyone will welcome receipts and other financial details delivered by bot. Tiffani Montez, a senior analyst at Aite Group, gives a more personal take: “I recently bought a pair of sunglasses from an ad that I saw in Facebook and the receipt was sent to Messenger, and after tracking updates were sent through the same channel. I found it to be convenient. Now, if they start sending me a bunch of advertising in Messenger after this interaction, I think that crosses a line.”

Digital friend or foe?

A study by DigitasLBi on chatbot acceptance among U.S. consumers showed distinct nuances in sensitivity to payments in messaging channels. It found that affluent households with income of over $100,000 are more likely than Americans whose total household income is under $50,000 to find it invasive that chatbots can remember past interactions and store a customer’s previous purchase history and personal preferences (28% vs. 20%). People living in the Northeast are more likely than those in other regions of the U.S. to find them invasive (31% in the Northeast vs. 23% in the South, 19% in the Midwest and 22% in the West).

While there are abundant studies available on best practice UX design for chatbots and conversational commerce in Messenger and other chat platforms, these cater to designing only for someone who is already there. What is far more nuanced is how to get them there in the first place.

“We are trying to figure, where does the shift happen? It's a spectrum. There's no specific answer there,” says Miller.

It is also important not to put all conversational commerce in the same bucket. A voice conversation with an Amazon Alexa skill may seem the same as a text conversation with a bot in Messenger, but voice interactions with bots are unencumbered by expectations. Consumers have a long history with text messaging via SMS or messaging apps; the nuances are different.

Facebook has some intentional guardrails in place to prevent Messenger from becoming “spammy.” For instance, “Sponsored Messages” (read, advertising) can’t be sent to a user who hasn’t engaged with a bot before. These are strictly to re-engage users who have initiated a conversation with a bot at some point, whether organically or through a News Feed ad.

Likewise, payments players are also demonstrating a “tread carefully” approach by putting the end user in control of interactions.

“We provide functionality for cardmembers to select which features to access,” says Matt Sueoka, vice president of digital partnership at American Express. “For example, transaction notifications delivered via our Amex bot can be turned on or off by the user.”

Facebook also allows users to block bots from sending them messages if they don’t want to receive the content. But presumably, by the time this threshold has been met, the user is already annoyed.

“It's undeniably going to cross a line with some consumers,” says Dan Van Dyke, a senior research analyst at BI Intelligence. “Not only are chatbots permeating personal channels, but AI is listening in for opportunities to generate payments. From one perspective, it's important to push chatbots to customers at relevant times in order to build adoption, but this will alienate the security and privacy conscious.”

A model for bot behavior

Irrespective of societal sensitivities to messaging becoming a commercial channel, it is coming.

The precedents set by South East Asian messaging giants such as Tencent’s WeChat and Alibaba’s Alipay demonstrate the sheer scale of the opportunity to monetize messaging. Collectively, the pair accounted for 63% of all payment transactions in China and a breathtaking US$3 trillion in payments in 2016.

Facebook now reports 1.2 billion Messenger users per month. It would seem therefore that a cut-and-paste approach to replicating the SE Asian model for converting messaging to commercial viability would be fairly straightforward, but despite similarities, how each region got to today’s messaging penetration took very different routes.

Cellular penetration in the U.S. and China are both extremely high, but China lags way behind on household internet access, just 57% compared with 94% in the U.S.. As a result of this, the mobile phone has been the de facto form of digital commerce. About half of all sales over the internet in China take place via mobile phones and Alipay, launched in 2004, was a logical extension of this. By contrast, Facebook launched the Messenger platform only two years ago. Clearly it has been no laggard in catching up with its Asian counterparts, but culturally, it has had a very different purpose as first and foremost being a means of communicating with friends and family. But Facebook’s ambitions to monetize Messenger have been transparent from the outset — tellingly, the head of Messenger, David Marcus, was formerly the CEO of PayPal.

According to a Facebook-commissioned study by Nielsen, 56% of people surveyed would rather message a business than call customer service, and 67% expect to message businesses even more over the next two years. It is even argued that messaging platforms will replace apps entirely as we shift from phones and wearables being something that we actively engage in to something that is passively always there in the background.

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