Mastercard has introduced Agent Pay, a new payments technology designed to enhance commerce in the AI era. In a similar move, PayPal has launched new tools for developers to enable agentic commerce experiences.
The payments giant is collaborating with Microsoft to incorporate AI technologies like Microsoft Azure OpenAI Service and Microsoft Copilot Studio into its platform, aiming for what it terms “agentic commerce.” According to Mastercard, this integration will create smarter, more personalized payment experiences for consumers, merchants, and issuers. Payments will be woven into tailored recommendations generated through AI conversations.
For instance, someone preparing for a birthday party could interact with an AI agent that curates a selection of outfits and accessories from local boutiques and online retailers based on their style preferences, venue ambience, and weather conditions. The agent can handle the purchase while also suggesting optimal payment methods.
Additionally, a small textile enterprise might leverage its AI agent for sourcing, optimizing payment terms, and managing logistics with international suppliers. The agent could finalize the cross-border purchase using a Mastercard virtual corporate card token and arrange for efficient, cost-effective delivery.
AI agents will require registration and verification prior to making payments on behalf of users, and advanced tokenization technology will facilitate transactions initiated through conversational interfaces.
In collaboration with Microsoft, Mastercard is also partnering with IBM for B2B applications and working with companies like Braintree and Checkout.com on tokenization initiatives. Jorn Lambert, Mastercard’s chief product officer, states, “The launch of Mastercard Agent Pay represents our initial steps in redefining commerce in the AI era, including new merchant interfaces to differentiate trusted agents from malicious actors.”
On the other hand, PayPal has enabled developers to create agentic AI experiences, allowing customers to manage payments, track shipments, and handle invoices—all powered by PayPal within an AI agent.
Alex Chriss, PayPal’s president and CEO, emphasizes the company’s commitment to rapid innovation, stating, “We are building with velocity and partnering with leading players in AI to empower our customers in the AI economy.” OpenAI is also enhancing its capabilities, rolling out features to streamline product discovery and purchasing in its ChatGPT chatbot.