LAS VEGAS — Rapid advances in artificial intelligence are creating opportunities and headaches for payments companies in equal measure.
By the same token, merchants are not immune from frustration as emerging technology threatens to change the way they do business.
Online sellers need to rethink the way they market their products and authenticate customers, Johan Gerber, Mastercard's executive vice president of security solutions, said in an interview with sister publication Payments Dive.
Gerber is just one of many payments executives who discussed the rise of agentic AI — artificial intelligence programs that scour the internet for specific products — at the annual Money 20/20 conference in Las Vegas last week.
Consumers already use AI programs like ChatGPT and Perplexity to search for products that meet their needs, but agentic platforms will eventually make purchases on shoppers’ behalf.
The emerging technology will change the way merchants prevent fraud and present their products to an online audience, Gerber said.
Editor’s note: The following interview has been edited for clarity and brevity.
PAYMENTS DIVE: What are some of your big takeaways from Money 20/20?
JOHAN GERBER: There's a big theme around agentic commerce. I think there’s some interesting takeaways around how we should think about it. We’re working very closely with the agentic platforms in order to make sure that all of this stuff works. Fraud vendors on the side of the merchant do a lot of work in understanding who’s coming into the merchant’s website. How are they logging on? Have we seen the device before? All those beautiful things that they do now, all of a sudden, that’s proxied by an agent. You’re blind to the original consumer. So, we need to find ways of working with the agents to solve for that. We need to figure out, how do we deal with an agent looking for Nike shoes, number 10s in white? I've got five businesses with the exact same product and exact same price. Who chooses what, and how do I incentivize an agent to take mine versus my competitors?
What are some of the challenges for merchants?
There’s some really interesting things the industry needs to think through to ensure that the businesses who are selling [online] do not lose their relationship with the end consumer. Those are some of the themes that we’re looking at.
If I ask an agent to book me a ticket on a booking site, not only do I have to give it my payment credentials, I have to give it my password to my loyalty scheme. All of those things have to be trusted to the agent so we have to work with these agentic platforms to make sure that they are good, responsible players.
What is Mastercard doing to address these challenges?
We’re working with Cloudflare (a cybersecurity company) to bring some order to this area. We want agents to register with us. We want them to make sure they store credentials of the consumers.
How does agentic AI change the equation for merchants? Do they have to rethink things like SEO?
Yes, that’s correct. And they have to really think about, ‘how do I do strong customer authentication?’ This will now be delegated to the agent. The agent is the one that will have to do the authentication to make sure this customer is real and then provide that level of confidence to the merchant.
Agentic commerce presents a beautiful experience for many merchants. But if we can’t secure it, it’ll be short-lived. So the benefit to the businesses that are creating these experiences are huge, but we have to make sure we do so with security embedded, otherwise it will not be sustainable.
When you talk about cybersecurity and the merchant experience, is this something Mastercard has figured out, or is it something the company is still working on?
We’re hard at work on it, but it’s a never-ending story. It’s an arms race between us and the criminals, but we need to make sure that the foundations are strong, and that’s where the role that companies like ourselves play is so important. We set the standards for interoperability. We set the standard to say, if you want to be an agent, we need you to adhere to a specific standard of security, data privacy and data governance. Those things are important for us. And then, as we go into business, we will learn how the criminals are adapting. And then the arms race is on, and we’ll keep changing and adapting as things go forward.
