PayPal’s CFO believes AI can save the company $25 million a year by automating 1 area of customer service

Reuters/Lucas Jackson

PayPal customers sometimes reach out to the payments platform to get more information on a transaction that shows up on their bank statement.
Those calls cost the company roughly $25 million annually, John Rainey, PayPal’s CFO, told Business Insider.
Rainey is pushing to use AI technology to automatically respond to those requests.

You decide to check your bank account when you come across a transaction simply labeled "PayPal." You pause, as you can’t quite remember what you purchased.

If it’s a meaningful amount of money, you might be inclined to reach out to PayPal to find out exactly what you bought using the payments system.

You wouldn’t be alone in your curiosity. John Rainey, chief financial officer of PayPal, told Business Insider roughly 11% of the 60 million customer inquiries the company gets every year are simply about getting the details of a transaction.

With every customer phone call costing PayPal about $4, those questions added up to around $25 million a year, according to Rainey. That’s a significant cost to the business for something he said should be automated.

"There is no reason they need to speak to us about that," Rainey said. "We have all that information."

Issues like that, Rainey said, could be handled by a chat bots powered by artificial intelligence that would interact with clients via PayPal’s app or website, pulling the necessary data.

To be clear, Rainey isn’t looking to completely stop customers from calling PayPal. He understands there will always be circumstances where a customer will want to get on the phone to talk through a problem.

"We don’t want to force people into an experience that they don’t want," Rainey added. "When you are dealing with money, people need some clarity."

However, Rainey is keen to improve PayPal’s customer service through the usage of artificial intelligence. As it stands now, Rainey said the percentage of customer inquiries PayPal’s chatbots handle, which are relatively new, is "in the high single-digits, but growing significantly."

Ideally, he’d love to get to the point where a majority of customer requests are automated. As opposed to aiming for small improvements every year, Rainey said PayPal is pushing for faster change.

Checking on transactions isn’t the only area Rainey sees opportunity. Using AI and machine-learning techniques can help predict what PayPal has dubbed "BNA" — best action next — for the customer.

If a customer is calling because they are having trouble adding a credit card to their PayPal wallet, the employee assisting could find out if he or she was trying to purchase something, and how they could help them do so.

"Let us take the next step to actually predict what you want to do and help you with that," Rainey said. "Rather than you call back a second time when you have another issue."

See more: PayPal hits $164 billion in total payment volume

Follow-up calls are a particular sore subject for Rainey. Currently, 25% of PayPal’s customer inquiries result in a repeat call, a figure Rainey said he is "ashamed" of. Improving what Rainey calls "first contact resolution" is a top priority. Employees are no longer incentivized for how quickly they can get off the phone with customers, as was the case previously.

AI can help in that regard too, pulling up relevant data based on similar inquires to help employees handling the request completely resolve the issue and address potential follow-up problems.

All of these efforts aren’t just about reducing the amount PayPal spends on customer service either, Rainey added.

"What we see is that your level of engagement — post a service experience — can be appreciably different depending upon how we resolve that," he said.

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