Love it or fear it, the abilities of artificial intelligence (AI) and its game-changing technology continue to grow. In fact, when I sat down to write this column, I clicked on ChatGPT and asked it to write something about AI and the adult industry. The paragraph it generated was actually pretty impressive! But I decided that would be cheating, so this month’s column will just be my own thoughts, per usual.
I want to talk specifically about the use of AI as it relates to payment processing as more and more people are using AI to develop merchant sites. Let’s dive into what the requirements are for AI websites, what banks will approve — and how AI is making payment processing safer.
As we went through the underwriting process, we treated the AI programs as if they were user-generated content sites. And just like those user-generated sites, the same card brand rules apply.
AI and Emerging Sites
Recently, we’ve had several requests to process payments for sites focused on AI. These range from new subscription sites to existing cam and fan sites offering their content creators an AI solution as an additional way to monetize their brands. AI is also being used to make adult sites’ content more accessible and customizable. It allows business owners to predict what their viewers will want to watch, offer recommendations and customize their offerings to deliver personalized content.
When we started to get more requests from AI site merchants, we reached out to our acquiring bank partners looking for advice on how to handle them. The banks were also a little bit stumped and asked for examples of what we were working on. To date, we have had a few AI-based sites approved and they are already live and processing. As we went through the underwriting process, we treated the AI programs as if they were user-generated content sites. And just like those user-generated sites, the same card brand rules apply.
I want to repeat that because it’s important: All card brand rules must be followed, even if the content is AI-generated. That means having controls in place to moderate and review all AI-generated content prior to posting, and to prevent the generation of content that would make the end product appear to be illegal, such as nonconsensual images/videos, content depicting minors or using a celebrity’s image, etc.
Bank Approval Checklist
Before you can get the bank’s approval, some key questions need to be answered:
- How is the content that is used for generating AI images acquired?
- How was consent obtained for all images and content appearing on the website?
- Does a person have the right to request that their content be removed? This applies both to content creators and to any individual accessing the site.
- What controls does the merchant have in place to prevent content from being generated that could make the resulting product appear to be illegal, as described above?
AI as Fraud Detector
The technological advancements of AI are already revolutionizing the way we process payments. There are many plus points to this, as it offers enhanced security, efficiency and decision-making. With AI, transactions can be completed instantly, enabling businesses to manage their cash flow better and reconcile transactions faster.
As a payment processor, we have for years used AI — or as we called it, machine learning — to help us with our risk and fraud management. One way to enhance fraud detection is through AI’s capacity for advanced analytics, identifying patterns in transaction data that could not be detected using traditional methods. AI tools help our risk team act on suspicious information to stop fraud, almost in real time. Real-time risk assessment can also be used to analyze user behavior and identify anomalies that could indicate potential fraud. AI can detect fraudulent user behavior by analyzing its geolocation and transaction history too.
AI has also been employed by many merchants to support customer service. It contributes to improving the customer experience and customer satisfaction in many ways. Chatbots are a common application of AI used in customer service, helping customers with basic inquiries and providing information. Virtual assistants can answer customer questions promptly, which can lead to a better customer experience. This frees up the regular customer service staff, giving them more time to handle complex issues that need human intervention. AI can also contribute to the customer experience through personalization based on customer preferences and purchase history, which can help with customer retention.
Let’s face it, AI is here to stay. Properly used, it can be a helpful tool in many ways. It improves risk management and customer service, and can help forecast what products your customers will prefer. As with any rapidly evolving technology, there are bound to be speed bumps along the way, but the adult industry is famous for being ahead of the curve on adoption of new tech as well as figuring out how best to make use of it. I am confident that AI will prove no exception.
Cathy Beardsley is president and CEO of Segpay, a merchant services provider offering a wide range of custom financial solutions including payment facilitator, direct merchant accounts and secure gateway services. Under her direction, Segpay has become one of four companies approved by Visa to operate as a high-risk internet payment services provider. Segpay offers secure turnkey solutions to accept online payments, with a guarantee that funds are kept safe and protected with its proprietary Fraud Mitigation System and customer service and support. For any questions or help, contact sales@segpay.com or compliance@segpay.com.