Visa and Mastercard are racing to develop payment tools that enable consumers to use ‘agentic’ artificial intelligence to commission digital agents for purchasing goods and services. This emerging technology allows consumers to program digital agents to shop based on specified criteria, with both Visa and Mastercard eager to play a significant role in the transaction process.
The development of automated shopping tools is expected to result in increased sales for merchants, thereby generating more fees for credit card issuers and networks processing transactions. Visa Chief Financial Officer Chris Suh noted at a William Blair investor conference that ‘Generative AI has the ability to transform commerce much in the same way that e-commerce transformed the purchasing experience for face-to-face transactions.’
Other major players have already begun exploring this technology. Amazon disclosed in April that it was testing a ‘Buy for Me’ feature in its app, allowing for automated purchasing. PayPal announced in May that it would process payments for automated shopping developed by AI engine company Perplexity. Retail giant Walmart has also been studying the phenomenon to understand consumer perceptions.
Mastercard’s Approach
Mastercard, the second-largest U.S. network, announced on April 29 that it would leverage its tokenization expertise to collaborate with Microsoft in building this new commerce form. The company plans to partner with merchant service providers Checkout.com and PayPal Holdings’ Braintree to enhance merchant services. Additionally, Mastercard will partner with IBM to explore business-to-business use cases.
Visa’s Strategy
A day after Mastercard’s announcement, Visa revealed it was working with similar partners, including digital payments company Stripe, to spearhead agentic shopping. Visa emphasized that this technology will make it ‘possible to transact in an AI-driven world in a way that is secure and trusted.’ Visa’s CFO Suh referred to this development as ‘intelligent commerce,’ designed to remove digital friction that consumers often encounter online.
Benefits and Challenges
The agentic approach aims to simplify the shopping experience, allowing consumers to send digital agents to make purchases while they focus on other activities. Mastercard Chief Services Officer Craig Vosburg described it as ‘the next step in the evolution of commerce.’ However, establishing the necessary technological safeguards to ensure trust and security remains a work in progress. Both networks are still developing parameters to authenticate users, provide consumers with spending controls, and address any issues with problematic payments.
Future Developments
While the networks have been vague about the timeline for incorporating agentic AI-driven spending tools, they acknowledge that the technology is advancing rapidly. Visa’s Suh described the current state as ‘early days,’ while Mastercard’s Vosburg noted that ‘it’s fair to say it’s going to progress quickly.’ The role of tokenization will be crucial in authentication, fraud prevention, and data collection for dispute resolution. Protecting against fraudsters manipulating the new technology is also a key consideration for both networks.
