The AI Advantage: 3 Ways AI is Reshaping Checkout Experiences for SMBs

Checkout is no longer just the final step in a transaction — it’s where customers decide if they’ll return. And increasingly, it’s where artificial intelligence (AI) is raising the bar.

Whether you run a neighborhood boutique or a growing e-commerce brand, AI is transforming the checkout experience from a routine transaction into a powerful competitive advantage. It’s driving faster, more flexible and more secure payment experiences while delivering the personalization today’s consumers expect. In fact, an NMI survey of 1,000 U.S. adults ages 18-plus reveals that 26 percent of consumers support AI-enhanced payment systems — if they make their checkout experience faster and easier. Additionally, 43 percent of shoppers say it's very important for retailers and businesses to offer flexible payments.

For small and medium-sized businesses (SMBs) navigating a crowded market, AI isn’t just a buzzword; it’s a game-changer, offering competitive advantages in ways that weren’t possible before. From cashier-less kiosks to smarter fraud protection, here are three ways AI is reshaping how SMBs win and retain customers at checkout.

Enhancing Convenience

One of the most powerful areas where AI is making an impact is in transaction approvals. With faster, more intelligent, and contextually aware decision-making, AI helps issuers approve transactions more confidently. This not only boosts customer experience but also protects all the stakeholders within the payment ecosystem. By improving the approval process, SMBs can focus more on serving their customers and less on transaction risk.

Another form of convenience is offering flexible payment options. Flexible payments are essential, and companies like NMI are at the forefront of this shift. Our data shows that:

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• 26 percent of consumers say they would support AI-driven payment options if they make checkout faster and easier;
• 43 percent would like payment technology to drive faster transaction times this year; and
• 52 percent of Americans expect to use digital wallets (e.g., Apple and Google Pay) for half or more of their transactions, rising to 72 percent for millennials and 79 percent for Gen Z.

AI can help businesses meet consumer expectations for frictionless payments. One standout example is the rise of cashier-less kiosks. By using advanced 3D cameras and AI vision systems, these kiosks allow consumers to make purchases without traditional checkouts, making them excellent options for small businesses looking to expand without the overhead of additional staff. Whether adding a second location or transitioning an online store to a brick-and-mortar setting, AI-powered kiosks offer frictionless ways to serve customers.

Personalizing the Shopping Experience

Customers don't just want a fast checkout; they want a checkout experience tailored to them and their purchase needs. AI allows SMBs to personalize payments meaningfully, helping build customer loyalty and satisfaction. Imagine a world where your payment system automatically converts currencies for international shoppers, suggests the best payment method based on past behaviors and transactions, or even sends automatic personalized discounts, reminders and rewards. The latter perk is especially critical for consumers: 87 percent of all respondents and 90 percent of Gen Z said they’re more likely to shop with a retailer that offers instant rewards. AI can also analyze an individual’s shopping behavior and offer personalized product recommendations throughout their journey, helping the customer find exactly what they’re looking for, discover similar products, or stumble upon something new that’s on sale.

For SMBs, this personalization can lead to increased sales, repeat traffic, and higher rates of customer retention. With AI, there’s no longer a need for “one-size-fits-all” solutions. Now, businesses can offer experiences that are as unique as their customers, creating opportunities to truly innovate, grow and meet consumer expectations in ways that weren’t possible before.

Keeping Fraudsters at Bay

AI isn't just about speed and personalization; it's also a powerful tool for security, and it’s making a notable difference in payment security. NMI indicates that fraud prevention remains a top concern for shoppers, with 71 percent of consumers expressing a strong desire for better fraud protection in 2025.

With fraud prevention tools powered by AI, merchants can protect themselves and their customers while providing a smooth and secure transaction experience. Companies like Kount are already leveraging AI to help prevent fraud, and that trend is expected to grow. By analyzing transaction patterns and flagging suspicious activity in real time, AI-powered fraud detection helps retailers prevent unauthorized transactions without creating friction for their customers. For SMBs, AI-driven fraud protection can mean fewer chargebacks, less fraud, and customer relationships built on trust — all while enabling a seamless checkout process.

The Time to Act is Now

As consumer expectations continue to rise, retailers can no longer afford to ignore AI's potential impact on their payment systems. Those that embrace AI to enhance speed, security, personalization and flexibility will meet customer demands and gain a competitive edge.

Leveraging a software platform that integrates with modular AI-driven payment solutions can empower small businesses to evolve lightning-fast. The future of checkout is here. Is your business ready to embrace it?

Kate Hampton is the chief strategy officer at NMI, a leading global embedded payments enablement platform.