Exclusive | Mastercard Inks Deal as Payment Giants Brace for New Era of AI Shopping

The behemoths that power the payments world are laying the groundwork for a universe where artificial-intelligence bots do your shopping.

Mastercard MA -0.96%decrease; down pointing triangle plans to roll out an agentic payment option this week for everyday purchases, through a partnership with the startup Alchemy, the companies told The Wall Street Journal. Alchemy allows users to issue virtual cards to AI bots with set restrictions, such as a cap on how much it can spend and on what type of products.

The efforts are setting the stage for what executives see as a rapidly approaching new era in payments, where AI bots could increasingly drive purchases. The prospect of that scenario means rethinking matters like the fraud- and crime-detection systems that banks, merchants and payment processors have built over the years.

“We believe it’s not about if, it’s about when and how quickly,” said Jorn Lambert, Mastercard’s chief product officer.

Mastercard and Alchemy said the cardholder’s authorization can take place at different points in the process. For example, a customer can authorize a transaction based on set parameters in advance and then let the agent take over, or ask it to check back before pulling the trigger.

Visa V -1.25%decrease; down pointing triangle has already partnered with Alchemy, meaning most credit cards can now work with the tool. Visa, Mastercard and American Express have each announced their own tools and standards for AI platforms, merchants and others to support AI purchases.

Proponents envision a universe in which shoppers would use an AI bot, or agent, to make purchases online based on a cardholder’s preferences and budget, with the ability to look for signals like a drop in price before making a purchase.

Still, it is early innings and it isn’t yet clear what the appetite for agentic payments will be.

For now, payments executives see trust as the biggest barrier to people embracing AI shopping. Users might fear giving their credit-card information to their AI bot, for instance, or not want to risk a rogue agent going on shopping sprees without their permission.

Some bank executives also remain skeptical that agentic payments will take over soon, especially with mounting AI safety concerns about rogue agents prompting talks of a slowdown by hyperscalers.

There is also uncertainty around how regulators might treat agentic payments down the road.

The concept of agentic payments “is a really good one but it is certainly not without its risks,” Brendan Coughlin, president of Citizens Financial Group, told the Journal.

Mastercard said it has already signed up the banks it works with to use the tech needed for its protocols. Banks issuing cards have to support what is called “agentic tokens” that contain a user’s intent and the data for the purchase.

It is still in the process of getting certain AI providers signed on to the program.

Other payment companies, including Stripe, Adyen and PayPal, have unveiled their own tools and partnerships.

When full-on AI shopping might become a reality isn’t clear. A common refrain among executives is that there are more news releases about agentic commerce than actual transactions.

“Nothing happens overnight,” Lambert said.