Is coronavirus pushing more people to voice payments?
The coronavirus pandemic was an unexpected catalyst for contactless cards, and another no-contact payment method is poised for growth as well: voice payments.
Google’s taking early steps to extend its voice payment platform, which seems tailor made for shoppers looking for less contact with stores, cards or anything physical.
The technology would allow voice authentication for Google Assistant payments, mostly for home speakers and smart displays, and is in early testing. Google has also tweaked other biometric technologies, such as supporting payments through Windows Hello. That will allow fingerprint or facial recognition to authenticate purchases through Chrome.
It’s likely these tests would be happening normally, given voice-assisted payments have been in the lab for several years and removing friction is an evergreen goal. The coronavirus provides new incentives to push the technology, now that more consumers are worried about catching germs by handling cash or typing on PIN pads.
In an email, Google's PR office said it's an early experiment so it may evolve based on feedback. Currently, capability is limited to in-app digital purchases on Google Play with limits on transactions.
Also, merchants are looking for new ways to sell, now that the virus has severely stressed traditional shopping and payment models.
“We’re on the cusp of a major transformation in payment enablement and security. With the rapid acceleration of digital commerce due to the pandemic, the need for low-friction, secure payment processes has become more obvious,” said Thad Peterson, a senior analyst at Aite.
Virtual assistants have been moved into internet of things devices such as home appliances and car dashboards. Amazon, Apple and Google have also been improving voice recognition to make it easier to find information about products and ultimately make purchases.
Amazon has added several voice payment features over the past year, and leads Google and Apple in smart speaker share — giving it a head start in shop-at-home voice payments. Amazon has promoted voice shopping for Prime Day, and earlier in 2020 added voice payments for gas purchases.
While Amazon has the lead in devices, Google’s ability to “understand” shopping commands has performed better than its rivals, giving it an advantage when adding authentication or payment commands.
“Incorporating Windows Hello also helps to simplify and speed digital payments without requiring a CVC (card verification) code. We’re moving to a payment ecosystem where fast, secure, low- friction payments are table stakes,” Peterson said.
Easing authentication for voice payments will be key, and removing CVC prompts is one way to do that.
“More convenient forms of strong authentication are necessary to eliminate that friction without losing the security benefits that it provides. Biometrics provide a great opportunity to do this,” said Rick Oglesby, president of AZ Payments Group. “Those that are in position to enable biometric authentication via the shopping devices that they control, such as Amazon, Apple, Google and Microsoft, may be able to convert that to a sustainable competitive advantage in online payments.”
Voice assistants have been widely adopted, so there’s a large addressable market. About 90 million U.S. adults use smart speakers, up 32% over the beginning of 2019 and up 85% over the beginning of 2018, according to Voicebot. But using the technology to pay has not caught on.
It’s likely the pandemic will change that, since other noncash payment methods are growing. Contactless payments, either via mobile wallets or cards, have risen quickly in usage during the coronavirus after more gradual growth before the outbreak.
And the overall move to e-commerce and online transactions is spurring other innovation as a way to reach consumers who may be reluctant to visit stores. Livestreaming has picked up steam in China, which is emerging from lockdowns earlier. Stores in China are using streams to interact with shoppers while broadcasting, with an option for direct purchase.
Developers of Checkout-free technology, spurred by Amazon Go and developers building systems for brick-and-mortar merchants, are also trying to push their concepts out of testing and into the market faster because of the crisis.
Both checkout-free technology and streaming are relatively niche innovations that would have likely taken years to develop. Voice assistants are widely available for many uses.
“While a lot of people talk about the rise of contactless cards and online payments throughout and after the coronavirus, I do think the pandemic will spur innovation adoption in ‘contact free’ payments more broadly, such as biometric contactless cards, digital wallets, QR codes, checkout-free shopping setups and potentially voice commerce,” said Zil Bareisis, a senior analyst at Celent.
There’s a signal that consumers may be warming to voice shopping. In the U.K., consumers report using voice assistants more during the lockdown, and the percentage of people using voice assistants for shopping daily grew to 33% from 23%, according to Voxly Digital. Tying security to the transaction provides another argument to adopt voice enabled payments.
“Voice commerce certainly does have a role to play, especially with assistants, so being able to use voice to be able not just secure but also authenticate is critical to its success,” said Gareth Lodge, a senior analyst at Celent.