The Evolution of Agentic Commerce: Key Developments in AI and Payments
Agentic commerce, a term that defines a trade environment facilitated by autonomous AI agents, is rapidly transforming the dynamics of how people access information, work, and manage their finances. This revolution is predominantly spearheaded by major payment companies, fintechs, and card networks. With the swift pace of technological advancement, the banking sector’s cautious approach may soon need to adapt to keep up with the changes.
Recently, notable developments have emerged in this sector. Visa has launched a partnership with OpenAI to enable tokenized, agent-based transactions within its large language models (LLMs). Concurrently, Mastercard, along with other companies like Stripe and Global Payments, has rolled out a new framework for machine payments. Crypto exchange Coinbase is also stepping into the game, opening up to agents for handling investments and payments, following in the footsteps of Robinhood.
Visa and Mastercard: Pioneering Agentic Commerce
Visa’s collaboration with OpenAI involves integrating Visa’s agentic commerce protocol, termed Visa Intelligent Commerce, into OpenAI’s LLMs. This integration will authorize agents to execute tokenized payments on the network. “Commerce is going to happen in many more places and in many more ways than it does today, and agents will play an increasingly important role in helping people complete tasks that involve money,” Marco Mahrus, OpenAI’s Head of Partnerships and Commerce, stated.
Mastercard’s initiative, ‘Agent Pay for Machines,’ is a service that allows software to interact and transact with other software, creating a new layer of commerce. Jorn Lambert, Mastercard’s Chief Product Officer, believes that this will breed a variety of AI business models and revolutionize scale, speed, and latency in payments.
The implications of these developments for banks are considerable. As card networks make it easier for consumers to remain within LLMs, banks risk losing touch with their customers. Daniela Hawkins, a partner at Capco, warns of the customer relationship disintermediation risk for banks as AI agents become the primary banking interface.
Fintechs Embrace Agent Agnosticism
Meanwhile, fintechs, including Robinhood and Coinbase, are adopting an agent-agnostic approach, hoping their customers will use their preferred agents on their platforms for trading and making payments. “The way people interact with the internet is changing,” Coinbase said. “People are increasingly moving through the world via agents rather than apps.”
Richard Crone, CEO of Crone Consulting, believes that for survival, banks must bring LLMs within their ecosystem. He emphasized, “To survive, banks must get the large language models under their tent. Otherwise, ChatGPT Finances will eat their lunch because the one who enrolls is the one who controls.”
While financial institutions grapple with the pace of these changes, they must act quickly to avoid becoming mere background ledgers. As Hawkins aptly put it, “If they don’t make these updates to interact with these agents and these protocols through their systems, then they’ll just become a ledger in the background. People won’t even use the banks for anything anymore.”
As AI continues to reshape the financial landscape, it’s evident that the future of banking and commerce lies in the successful integration and implementation of agentic AI. Those who adapt quickly and intelligently will be the ones to thrive in this new era of commerce.
For the full article, click here.
