By Adam Atlas
Attorney at Law
ChatGPT, chat.openai.com, is the tip of the iceberg in terms of computer-generated content that is strikingly similar to human-generated content. I know it will make my profession obsolete, but what about readers of The Green Sheet?
The purpose of this article is to use my vantage point as a lawyer in payments and crypto to consider how AI might shape the future of payments and the laws surrounding the industry.
Selling payment services today involves comparing various pricing matrices, sometimes by way of manual crunching of numbers in spreadsheets. This method of comparison selling and shopping is not likely to last much longer as merchants will be equipped with AI-driven analytics that scoops up all of the merchant's data and that of various payment providers to provide points of comparison that might not have been possible before. In this sense, payment providers may have a harder time convincing the merchant's algorithm than convincing the merchant themselves. For decades, ISOs have leveraged the complexity of merchant processing pricing grids to present one or another offering in the best possible light. We must expect merchants to be "advised" by increasingly sophisticated tools that will see through sales pitches that used to work very well.
Merchant use of payment service pricing analytics raises interesting questions of title in the underlying data and, of course, whether the analytics service is itself spinning the numbers one way or another for its own benefit. Some ISOs have used the payment service advice model for years; those same ISOs may now use an analytics bot that makes the same sale but with seemingly objective data—that isn't.
Two can play the AI game. At the end of a sale, a human is often involved in a purchase decision in payments. As we know from social media, AI has the ability to—spookily—present us with information that somehow matches our precise set of interests. ISOs selling payment services can deploy those AI tools, not just to place advertising at just the right place and just the right time, but also to go further and pitch a specific merchant as a function of their subjective interests.
For example, imagine a merchant that already has a practice of giving some of its profit to a local charity. An ISO selling to that merchant, with the benefit of AI-based research and pricing, could present that merchant with a pre-packaged payment portal that provides the merchant and their customers with real-time information about the donations the merchant is facilitating and how they are changing the community where the merchant operates.
Selling by way of AI-gathered subjective data points might also shift the focus away from pricing and toward less concrete factors such as community affiliations and personal preferences.
From a legal perspective, questions will arise as to how far a sales organization should or can go in drilling into the psyche of a merchant to make a sale. It's one thing to spray perfume into the air at a car dealership; it's something else to present every merchant with a unique service that AI has suggested just for them based on their personal preferences and data points.
AI is only as good as the data on which it is built. A lot of legacy data contains our legacy biases. Therefore, from a legal perspective, if one were to use AI to tailor sales pitches, there would have to be real oversight by the sales organization to see that the pitches are not simply perpetuating pre-existing bias in the legacy data, such as erroneous and harmful differential risk profiles for people of different racial profiles.
Like telling Grandpa he's too old to drive, we lawyers will soon be told we're too slow and imprecise to write contracts. I'll be the first to admit this weakness versus AI. That said, the people behind contract-drafting-AI can have their own flaws and misconceptions that can bleed into the work product.
While I would advocate for AI-drafted legal agreements, I would also advocate for oversight of the contracts produced to see that they are what parties think they are. In fact, I see an excellent opportunity for AI-driven legal work to be vetted by one or another law firm.
Doctors are probably having a hard time dealing with the fact that apps on their phone might do a better job of diagnosis than their memories of med school. I expect lawyers will go through a similar moment of humility. I am ready to admit AI will do a lot of my work better than I can, which will hopefully free up time to work on pieces of legal thinking where humans still add value.
How many times has a large processor told you that they overbilled or underbilled an item and it will take weeks or months to figure out what and why and how to fix it? With all the data in-hand, AI should be able to diagnose these scenarios within seconds—leaving the processor and the ISO to pivot to solutions without protracted disputes and investigations that harm the mutually trusting relationship that is important in payment processing sales.
The bigger question is, will some payment participants feel like they are swimming naked at low tide when AI comes to take a look around? As payments ISOs know, there is a fine line between shrewd sales and deliberately confusing numbers.
Legally, parties seeking audit rights will be asking for access to broad sets of data—such as all data concerning all ISOs—to see if the ISO in question has been singled out for special treatment. This level of transparency is something that processors are probably not ready to face.
There isn't a better cohort of people to prepare for the unknown than salespeople, so I believe payments ISOs will be able to transition to a marketplace with more AI, but some will get scrambled or lost along the way. 
In publishing The Green Sheet, neither the author nor the publisher are engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. For further information on this article, please contact Adam Atlas, Attorney at Law by email at atlas@adamatlas.com or by phone at 514-842-0886.
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