The Impact Quantum-Powered AI Could Have on Payments

The 21st century has seen an incredible progression of business capabilities from an innovation standpoint.

Taking into account the recent commercialization of artificial intelligence (AI) to a more general and ongoing digital transformation, it’s fair to say that the present landscape is nearly unrecognizable compared to just a decade ago.

After all, the hallmark of a technical inflection point is that they’re easy to appreciate in retrospect, but more challenging to recognize when one is in the midst of them.

This, as the research journal Nature reported that scientists, including researchers at Google, are increasingly exploring the capacity of quantum computing — which is set to become a commercial reality in the near future — to influence and transform AI.

“Our idea is to use quantum computers to speed up or improve classical machine-learning models,” said Sofia Vallecorsa, a physicist who leads a quantum-computing and machine-learning research group at CERN, per the report.

“Our world inherently is quantum-mechanical. If you want to have a quantum machine that can learn, it could be much more powerful,” Hsin-Yuan Huang, a researcher at Google, added.

Put together two of the buzziest innovations in the tech field: AI and quantum computing; and you get quantum AI. And quantum AI, which has applications that sit at the intersection of payments and the digital transformation, could revolutionize the payments space.

See also: 12 Payments Experts Share How AI Changed Everything in 2023

Practical Applications of Quantum AI

Quantum computing and AI will separately revolutionize nearly every industry in the next few decades, with a recent benchmark experiment suggesting quantum-powered applications could be a commercial reality even within the next two years.

Already, a quantum experiment by Google performed a calculation in just 200 seconds that would have been infeasible on the world’s fastest supercomputers.

The promise of quantum computing is to speed up calculations — performing operations that might otherwise have taken billions of billions of years to run in mere seconds.

They do this by harnessing the unique properties of the subatomic world, driven by qubits (quantum bits) that break down information across fundamentally different planes and allow quantum processors to tackle complex problems in fundamentally different — and more advanced — ways by placing the quantum information into a state of superposition.

As PYMNTS wrote, similar to how today’s generative AI capabilities moved beyond the sequential limitations of prior algorithms to collate and produce relevant information sets in real-time from vast data, quantum computing provides a comparable paradigm shift in how information is encoded and acted upon in a computing environment.

A quantum AI system could learn to recognize patterns in the data that its classical counterparts would miss, and financial institutions including JPMorgan, Wells Fargo and Goldman Sachs, as well as their international peers like Japan’s Mizuho, are already experimenting with quantum technologies and edge computing capabilities.

Read also: Quantum Computing Could Change Everything

The Intersection of Payments and Quantum AI

One immediate area for quantum AI to play within payments is through quantum encryption algorithms that enhance the security of financial transactions. Quantum key distribution (QKD) can provide unbreakable encryption, ensuring the confidentiality and integrity of payment data. This could significantly reduce the risk of cyberattacks and data breaches.

Michael Jabbara, global head of fraud services at Visa, told PYMNTS in March that bad actors are already starting to steal and hold onto encrypted data in preparation for quantum computing tools to enter the market and allow them to decrypt the information, making QKD a priority area as the quantum age approaches.

Fraud detection and prevention is one of the highest-interest areas within payments where quantum AI can make new strides. Quantum algorithms will be able to process vast amounts of data exponentially faster than classical counterparts, improving the speed and accuracy of fraud detection in real-time.

Beyond fraud, quantum computing can analyze complex risk factors and scenarios, enabling financial institutions to better assess and mitigate risks in their operations.

Elsewhere, another attractive application of quantum AI could be within the optimization of supply chain finance processes by reducing costs and enhancing liquidity management.

Quantum AI will also provide AI-powered customer service with a “quantum” leap of capability by improving natural language processing (NLP), sentiment analysis and recommendation systems, providing more personalized and efficient customer interactions.

But for the payments industry to fully reap the benefits of quantum AI, it will need to get its data in order. Attempting to run quantum AI processes using classically structured — and especially unstructured — data might not be possible.