Business payments may be approaching an inflection point in AI adoption. In the Indian Merchant Payments Survey 2026, conducted by Zoho Payments among more than 700 businesses across India, 78% of respondents said they would switch their primary payment gateway if another provider offered the AI capabilities they expect. But what businesses want AI to do is even more revealing.

AI-driven fraud detection ranked as the most sought-after capability, followed by automated reconciliation and smart payment routing. They address problems businesses already face: fraud, manual reconciliation, and failed payments. The broader survey suggests something else too. Businesses are increasingly evaluating payment providers on what happens around the transaction, not just the transaction itself.

What businesses actually want from AI in payments

The AI capabilities businesses value closely mirror some of their biggest payment challenges. 56% of respondents identified payment failures as their biggest operational challenge. Reconciliation remains particularly demanding. 61% of businesses spend 1-3 three hours every day on reconciliation, while 20% spend 3-6 hours. Only 14% complete the process in less than an hour. This helps explain the interest in automated reconciliation and smart routing. Businesses appear to be looking to AI not simply for new capabilities, but for better outcomes from processes that already consume time or affect revenue.

Fraud tells a similar story. 54% of surveyed businesses said they had experienced UPI social engineering fraud, the most commonly reported form among affected businesses. This highlights why AI-driven detection was ranked first by businesses because fraud has become a genuine and pressing concern.

The payment-provider decision is getting broader

AI, however, is only one factor influencing businesses. When asked what could make them switch providers, 62% cited same-day settlement, followed by lower fees or MDR at 56% and better reconciliation at 50%. At the same time, 65% cited pre-built integrations with accounting, billing, or ERP systems with native AI capabilities as the top reason to stay with their current provider.

Integration was particularly important among medium and large businesses,of businesses earning ₹10–50 crore annually and those earning more than ₹250 crore identifying it as their top reason to stay.

Taken together, these findings show that businesses are evaluating payment infrastructure across several dimensions: intelligence, reliability, settlement, cost, reconciliation, and connectivity with their financial systems.

Payments rarely end with the transaction

The need for connectivity becomes clearer when we consider what happens after a payment is made. A business still needs to determine who paid, what the payment was for, match it to an invoice, account for it correctly, reconcile it, and track its settlement. Businesses already perform this work across accounting software, billing platforms, ERP systems, and, in some cases, spreadsheets.

So the question is no longer only how well does a provider process the payment? It is increasingly how well does the payment work with everything that follows?

There are different ways to achieve this. A standalone payment provider can integrate with third-party accounting or ERP applications. Another approach is to embed payment capabilities directly into the applications where those business transactions originate. At Zoho, we have taken the latter approach.

Zoho Payments is embedded across Zoho's finance and operations ecosystem, bringing payment capabilities closer to workflows across invoicing, billing, commerce, accounting, and reconciliation. Businesses using other systems can also connect Zoho Payments through APIs and integrations. AI adds another layer to these workflows, with applications ranging from fraud detection and reconciliation assistance to anomaly detection and AI-agent-driven payment actions.

Looking beyond the transaction

The headline finding is significant - 78% would switch payment gateways for the AI capabilities they expect. But the wider picture is equally important. Businesses want payments to succeed more reliably. They want to spend less time reconciling them. They want faster access to funds, stronger protection from fraud, and better connectivity with the financial systems they already use.

AI is changing what businesses expect from payments. But increasingly, the value of a payment provider may also be determined by how well it supports everything that happens before and after the transaction.