The impact of automated AI on refund management

The ‘fourth industrial revolution’ is led by the advancement of AI systems, where the line between the physical and digital worlds is blurred. This includes the development of AI-driven pricing and refund management, where Payment Server Providers are handling all refunds and customer enquiries with automated systems. Compared to manual, human-led management, this is a more efficient, legitimate and cost-effective method for the provider and a more seamless process for the payer. 

There is an opportunity for PSPs to reduce payer churn and steer away from commoditised relationships while maximising their service to the provider.

The Downfalls of Manual Refund Management

Manual refund management has many downfalls, which can negatively impact providers and create a bottleneck in the payer’s consumer journey.

Billing and refunds are the most emotionally charged steps in a payer’s journey, so when refunds are delayed or declined, usually due to workload build-up or human error, it can lead to churned customers who lose trust. According to Salesforce’s research, 57% of customers abandon a business after a single bad experience.

As a provider, manual management can result in costly resources and a poor customer service reputation, simply due to the volume of work, handoffs, and individual cases that need attention.

The Potential of Automated AI in Refund Management

Artificial intelligence is changing the equation when it comes to financial management, for both providers and payers. 

Firstly, AI-driven pricing is more accurate and reliable, which reduces the provider’s operational costs and allows systems to be unified and organised.

The decision-making process is considerably optimised with automated AI systems making dynamic, context-based decisions in a fraction of the time it would take manual management, which is frequently based on static rules and requires layers of approval. Speed is essential for a positive customer experience, with 90% of consumers valuing immediate responses to their inquiries. 

Communication with customers is proactive and instant, rather than reactive and slow, resulting in a more streamlined process for the payer and, consequently, stronger relationships built on fast and trustworthy customer service.

Protect Group’s Value-Added Service

Protect Group’s primary value-added service is Refund Protect. It uses automated AI systems at every process, from smart pricing and confirmation emails to approving refund applications and processing repayments. 

When the payer is about to enter their card details, the product is white-labelled as an upgrade for their booking or ticket to be fully refundable in the event that, as Protect Group refers to it, ‘life happens’. Refund Protect uses smart and event-based pricing to calculate the cost of the upgrade, utilising relevant data from the user’s journey, such as the buyer's identity, the type of event, and the time of purchase, to determine the optimal price. This added technology ensures the product performs in real-time and eliminates any intermediate pricing.

The upgrade provides the payer with a prepopulated “magic link” to apply for a refund and upload evidence. The ‘ultra-fast approval and payout’ is a focal point of Refund Protect, claiming approvals take minutes and payouts are completed in just hours. This speed is achieved because over 90% of refund applications are approved through an automated AI claims platform. Providers retain the original transaction revenue, gain the ability to resell the ticket, and keep their share of the upgrade fee charged to customers.

Refund Protect benefits the provider, as the seamlessly integrated PSP and VAS ensure that the quick customer service characteristic is reflected in their brand. This will help build long-lasting relationships, reduce churn and move away from commoditised transactions.

It also benefits the payer as they have the opportunity to upgrade the terms and conditions of their ticket or booking and have a reliable system in place in case one of life’s ‘out-of-our-control’ moments gets in the way. As a potential returning customer, they will recognise it as an honourable upgrade option that brings peace of mind for future bookings.

‍Book a demo to understand how Protect Group’s refund management can entirely benefit your business and customers.