Visa's Agentic Commerce: How it Works and Why it Matters

Visa wants to set the standard for agentic commerce guardrails. Back in April, they announced their agentic commerce platform, Visa Intelligent Commerce, which enables AI to make purchases on behalf of Visa cardholders. Since then, the agentic commerce hype-train has gone full speed. How exactly does Visa Intelligent Commerce work? Let's walk through it. --- What is Agentic Commerce? Agentic commerce is a model of commerce where a consumer can tap an AI agent to search for products and make purchases on their behalf. Traditionally, the AI-driven shopping experience has been limited by the one thing that plagues a lot of payment innovation: Customer authentication. This means customers can have an AI-driven shopping experience, up until they reached the checkout page where they'll need to manually put their credentials to prove they're not a fraudster. Agentic commerce solves this issue through tokenization, auth/security checks, & integrated payment process. --- Visa Intelligent Commerce has 5 integrated services: 🔶 Tokenization: Pass-through, agent-specific payment token that only works 🔶 Authentication: Capabilities to perform step up verification of cardholder & set up Passkey that authenticates user's payment instructions 🔶 Payment Instructions: Controls that ensure payment credential requests match the user's authenticated instructions 🔶 Personalization: Once agent receives consent for use of user insights from the user, these insights will be used by the agent to provide a personalized experience 🔶 Signals: Collection of commerce signals that provides user's original instructions & details of each authorized purchase, allowing for quick dispute resolution --- What's the big deal here? Visa has removed a roadblock: customer authentication. Agentic payments, through Visa's framework, can now authenticate the customer, tying the Visa cardholder and their card to that AI agent. The exciting thing is that Visa is doing this through the use of agent-specific tokenization, where a token, rather than a card, will be given to the agent for all purchases. There are additional steps that Visa has included, such as having the user type in a Passkey to authenticate the payment instruction for use of that stored tokenized payment. There are also set controls that can be referred to by VisaNet once a merchant has sent over an auth request after the AI agent checks out, confirming details such as merchant, transaction amount, etc. --- Agentic commerce & Visa Intelligent Commerce are nascent at the moment. Because of that, #merchants are likely to wait till others adopt & use "a-commerce" before they make a move. What can merchants do right now if they have questions? They can reach out to their payment provider (like FreedomPay) to have a better understanding of what future capabilities look like. --- Credit: Visa Developer Center, Edgar, Dunn & Company #payments #digitalpayments #banks #agenticcommerce #AI