Are American Consumers Ready to Let AI Agents Shop and Pay on Their Behalf?
By Steve Cocheo, Senior Executive Editor at The Financial Brand
Simple Subscribe
Subscribe Now!
Executive Summary
- Agentic payments, the financial side of agentic commerce, is set to boom — if both merchants and consumers take to it.
- Beyond changing ecommerce, agentic payments could change the economics of major parts of the payments business.
- But lurking beneath the hype are worries about letting down the industry’s guard against bot-driven fraud. Plus, how long before “pure” agentic product recommendations give way to sponsored preferences?
You could tell Jack Forestell, Visa global head of product, was jazzed.
During the company’s annual product drop in May, he oozed enthusiasm for its fledgling Visa Intelligent Commerce, its entry into the rapidly intensifying competition for agentic commerce payments.
“AI-driven commerce has the potential to significantly improve the digital shopping and buying experience,” said Forestell. “We think the shift could rival the level of impact that ecommerce and mobile commerce themselves had.”
While digital commerce freed people from having to physically go from store to store, he said, sorting through the equivalent of the world’s inventory of a particular good is “a time-consuming cognitive burden,” comparing prices, features and preferences. AI agents, empowered to carry out instructions to shop for this or that, can deliver a better shopping experience, according to Forestell.
Forestell launched into an example of how Visa sees agentic commerce working — disclosing that what he was showing the audience was a mock-up of how an AI agent would operate. He planned a hypothetical trip to Florida and brought up on a screen an illustration of proposed purchases based on his requests — including a flight, accommodations, dining suggestions, and more.
The agent even suggested purchasing sunscreen.
Then, to illustrate where Visa — and other payment companies — come in, Forestell had the simulation display a message of confusion when he told it to go ahead and buy and book everything.
Tilt. It couldn’t actually pay for any of the suggestions, it said. It hadn’t been empowered to do so.
At Visa’s annual product drop, Jack Forestell, Visa global head of product, walked through a simulated agentic commerce experience and showed how agentic payment tech is necessary to complete the process.
Without the ability to make a payment through the agent, Forestell said, “This isn’t commerce. It’s just better searching, browsing and window shopping.”
Forestell believes Visa is cracking this obstacle, working with some of the biggest names in artificial intelligence, ecommerce and payments. This includes Anthropic, IBM, Microsoft, Mistral AI, OpenAI, Perplexity, Samsung and Stripe.
Numerous challenges had to be worked out involving trust from the viewpoints of both the purchaser and the merchant. One element is a Visa agentic commerce token that is bound to the agent platform the consumer is using for shopping and purchasing. Personalization is also built in, based on past purchase behavior, and can be turned on and off depending on the consumer’s preference at the time of the purchase.
“Imagine if my whole purchase history could be used to power the AI-driven shopping experience,” melding the commerce side and the payment side, said Forestell. He held out the promise of a “magical experience” for shoppers.
There’s no denying the “wow” factor here. And other players have their own entries going, including Mastercard Agent Pay, PayPal Agentic Toolkit, Google Agentic Checkout, and Amazon Buy for Me and Rufus.
Sessions at PayPal’s Dev Days earlier this year made it clear how intensive accomplishing all of this is for payment companies. Walkthroughs of internal demos gave a taste of the minute and numerous details involved in the sample agent-driven purchases and payments of a water bottle for under $30 and of a white hoodie.
PayPal’s Fahad Khan, product manager, checkout, told developers about many of the details going into a successful agentic sale/payment experience. Much hinges on PayPal knowing its customers, via data.
“When it comes to personalization, we already have the whole gamut covered,” said Khan. “We have a lot of information on file for our users, most of it that the users have provided to us, but we also know what the users actually do, what choices they actually make.”
This all guides the shopping experience and slots payments into the best likely choice for that consumer, based on past patterns, participation and preference in loyalty programs, and much more. The agentic payment process must also incorporate the ability for consumers to depart from their usual choices, for that transaction or to tweak them for the future, whatever their reasons.
Part of what sets PayPal apart from other players is that it has its own wallet, something that Visa and Mastercard and their issuers, lack.
Read more: PayPal Sets Its Sights Beyond Payments to Be a Shopping Platform
Taking Ecommerce to the Next Level
Experts greet these efforts, and the whole area of agentic payments, with a range of reactions — an acknowledgement of the technical achievements to date and those expected to come, anticipation that this trend will change ecommerce, as well as some skepticism about the speed of adoption and how comfortable consumers are with a hands-off shopping experience.
Agentic payments mark a new level of digital finance. “This has big strategic implications,” says payments consultant Richard Crone.
“I think it’s bigger than Apple Pay was for banks and mobile payments. What the App Store was for Steve Jobs, agentic commerce is for Visa, Mastercard, and the banks and credit unions they serve,” says Crone.
The agentic commerce trend ties in with something every bank and credit union needs to begin working on, according to Tony DeSanctis, senior director at Cornerstone Advisors: Addressing how ChatGPT and other large language models are changing search and the web.
“You can’t call this function ‘search engine optimization’ anymore,” says DeSanctis. “You have to call it ‘generative engine optimization’ —GEO — or ‘large language optimization’ —LLO.” Financial institutions are not only a key element of commerce and payments, but also a set of services that consumers shop for online, he explains.
In some ways, elements of what agentic commerce will mean have been part of the Amazon experience for years, says Crone, with its recommendation engine responsible for influencing about a third of its purchase volume, according to Crone’s estimates.
Crone has dubbed the developing set of capabilities “agent as a wallet,” AAAW for short. Ultimately, for the big payment companies pursuing the strategy, he says, “it’s a vertical integration play,” pushing them deeper into commerce while staking a claim into future transactions. He believes this could drive revenue beyond interchange income.
A key point to monitor is the Visa agentic token, he points out.
“It can carry a preserved, persistent identifier of what you have searched for and what you have purchased, and they have enriched that with their transaction database from the beginning of time,” says Crone. “That is rocket fuel for an agentic platform.”
He predicts that beyond the immediate search and purchase, the agentic processes the payments companies are developing will also produce trails that will enable the selling of digital ads, identifying attractive offers on a customer level, and provide competitive intelligence to brands and service providers. He sees this as creating new revenue streams for Visa and Mastercard.
But Crone admits that this is still very early days, and not all the likely competitors have spoken.
“You have to presume that agentic search capability will become part of every digital wallet,” says Crone. “When something comes out from Apple, it will probably blow everybody else away.”
Read more:
Will Consumers Really Want to Use Agentic Commerce?
At this point, while it is part of the picture, there’s less talk about agents not only finding but buying and paying completely independent of the human consumer. There’s more emphasis thus far on agentic commerce as a concierge or personal shopper on steroids, which, after obtaining human approval, then charges the purchase to the human’s account.
Still, there is skepticism about how readily consumers will take to agentic commerce and payments.
Take Drew Edmond, associate partner at the Glenbrook Partners LLC payments consulting firm. When he travels, he likes to be very hands on in his selections, and there are nuances to many of his trips that don’t necessarily synch with past behavior. Even when it comes to something like looking at reviews and ratings, he likes to exercise his own judgment regarding what appears to be a real review and what looks fake.
“I’m a bit skeptical,” says Edmond. “Putting all of that in the hands of an AI bot, and just automatically letting it make a payment without me feeling confident about what it’s chosen — between hotels and airfare, it could amount to thousands of dollars at stake.”
But Edmond adds that he’s been “bitten before by projecting my own behavior on the populace at large.” And he points out that he is an older millennial. As more and more people who will grow up with GenAI readily available shop and buy things, they will tend to favor this channel for buying and paying.
Cornerstone’s Tony DeSanctis shares some of that skepticism, but he also thinks the pulse of many consumers today indicates that adoption might be faster than some think.
To explain this, he points to a unit in his payments school where he discusses contactless cards. He shows a video of a British consumer who complains that when his contactless debit can’t be tapped, he has to input his PIN, taking him all of four seconds.
“What is this, a Victorian workhouse?” the consumer said, according to DeSanctis. And he thinks many consumers feel that way about ecommerce. “They don’t want to have to do anything, right? They see things as a Victorian workhouse. So they’re looking for the path of least resistance.”
Edmond says that while not all users of ChatGPT and other GenAI tools are young, typically the younger the consumer, the more likely they are already using GenAI in other areas of their life. So why not for shopping?
During the PayPal demos, tech staffers showed how the company anticipates handling subscription purchases and related controls. Subscriptions for all kinds of items, from meat and vegetables to goodie boxes, are especially popular among younger consumers.
There is a potential dark side to agentic too. Anyone who has used Google knows how much the first page of a search is stuffed with sponsored listings and other instances of companies who have paid to be seen first.
Could agentic commerce go the same way? DeSantis notes that currently the talk is all about algorithms picking the best possible choices, and “None of it is pay to play, right?”
“I would hope that that doesn’t happen,” says DeSanctis. “But I never assume, when money’s involved, that it won’t corrupt.”
Read more: ‘Do It for Me’ Will Power the Next Phase of Innovation in Banking
