Retailers are investing heavily in AI capabilities, yet many overlook a critical part of what can make or break these initiatives: Payments.
Modern AI-based payment tools offer powerful opportunities to transform fraud prevention, streamline operations, and enhance customer experience. This makes the payments layer one of the most valuable and underutilized assets in a retailer's AI strategy.
But to harness the full potential of AI-optimized payments, these tools must be powered by rich, real-time data from shopper activity across multiple retailers, platforms and channels. Leveraging this wide-ranging, high-quality payment data unlocks three transformative AI capabilities that can help merchants effectively combat fraud, drive efficiencies, and prepare for some major changes on the horizon of the retail landscape.
Reducing Fraud with Intelligent Payments
Retailers operating in e-commerce channels face the thorny challenge of protecting against increasingly sophisticated fraud attempts without adding too much friction into the payment process and deterring legitimate customers.
Legacy anti-fraud systems simply aren’t up to the task. These static, rules-based frameworks require security teams to constantly manage hundreds or thousands of individual manual fraud rules, which not only create unneeded complexity for legitimate customers, but also fail to keep up with fraudsters, who inevitably find a way around them.
"Traditional rules-based systems are essentially like playing whack-a-mole," said Karan Katyal, VP of commercial strategy at Adyen. "Last year, at Adyen, we processed $1.3 trillion in transaction data, and we can now use machine learning on this scale of data to find the optimized middle ground. It feels seamless because the system knows when to add friction and when to rely on biometrics or passkeys to verify identity.”
The key to striking the perfect balance of security and seamlessness lies in distinguishing trusted customers from potential fraudsters, particularly when it comes to first-time shoppers. Adyen's cross-platform recognition capabilities offer a powerful solution to this dilemma. With more than 9,000 enterprise merchant clients across a variety of verticals, Adyen can recognize a customer appearing on a particular merchant's site from previous patterns and behavior across its entire network.
This cross-platform visibility enables more trusted shoppers to experience seamless checkout, while fewer unrecognized shoppers require additional authentication, thereby reducing fraud losses while improving conversion rates for legitimate customers.
Driving Operational Efficiency through AI-Native Infrastructure
Beyond customer-facing applications, AI is also transforming how retailers manage payments behind the scenes, making key backend operations faster and easier, and enabling more efficient resource deployment.
For instance, Adyen has opened its APIs through an MCP (Model Context Protocol) server, allowing merchant operations teams to use enterprise AI chatbots like Google Gemini and Microsoft Copilot to work with Adyen’s systems and run complex tasks using natural language.
That means instead of using technical coding, team members can issue straightforward commands such as, “Generate a payment link for $95,” “Assign terminals 1-5 to Store 23,” or “Update software on all Dallas terminals.” The system interprets these natural language requests and then automatically executes the desired task.
This approach dramatically reduces training requirements and frees staff from repetitive manual work. Any user can perform everyday operations that previously required specialized knowledge, while technical specialists can focus their time and efforts on higher-value strategic initiatives, Katyal said.
“We've made our entire platform — developed in-house over 15 years — work with natural language,” Katyal said. “Even non-technical users can now build integrations. And technical users can focus on higher-order tasks and be much more efficient in building, maintenance, and upgrades.”
Enabling the Next Wave of Commerce: Agentic Payments
Perhaps the most transformative application of AI in payments is just around the corner. Agentic commerce, in which AI “agents” shop and transact autonomously on behalf of consumers, represents a fundamental shift in how commerce operates.
This new era requires entirely new payment infrastructure. That’s because existing payment frameworks weren’t designed for agent-initiated transactions, creating key challenges around verification, consent, and security when the shopper is an AI-powered bot instead of a human.
The move toward autonomous agents is happening in stages. The current phase focuses on conversational commerce — embedding merchant checkouts directly into AI surfaces like ChatGPT or Perplexity, Katyal said. This "human in the loop" model preserves an important lever of consumer control, with human users required to actually confirm purchases.
In the future, truly agentic commerce, without any human intervention at all, requires solving complex technical and trust challenges, according to Katyal. These include how to verify consumer intent when purchases happen automatically, and how to distinguish legitimate agents from “fraudbots.”
To help the retail industry address these challenges, Adyen is partnering across the ecosystem on building the foundational infrastructure through which retailers can manage AI-powered agent shoppers. Beyond helping lay the technical groundwork, Katyal said the company sees its role as an advocate for merchants, ensuring new protocols address fraud prevention, risk management, and maintaining direct merchant-customer relationships.
"Our role is to act as a universal translator, enabling these payment and data flows in ways that are safe for both shoppers and merchants,” said Katyal. "We've interviewed more than 100 of our largest enterprise merchants to understand what they're most excited about and concerned about. Now we’re working with agent developers to solve those challenges, so merchants can participate on their terms."
Want to learn more?
From reducing fraud without sacrificing customer experience, to streamlining operations through natural language, to powering retail’s agent-centric future, AI is paving the way for unprecedented payments innovation.
To learn more about how Adyen can help your business leverage the power of AI as the payments landscape rapidly evolves, visit adyen.com or contact us directly.
