How do Agentic Payments work?

🧠Knowledge Series #71: Your ultimate guide to AI agent payments. The technology behind this new, emerging AI-powered payment method explained.

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If you buy into the hype, the way users make payments could be about to fundamentally change forever.

This week, Mastercard revealed its new AI agent payment feature called Agent Pay, Visa announced a full AI agent payment framework and PayPal unveiled an entire new product stack dedicated to agentic payments.

Speaking as part of the launch, Visa’s Chief Product Officer said that the new suite of tools means that “AI agents can find, shop and buy for consumers based on their pre-selected preferences.” while PayPal’s product and engineering teams said that their new agentic payment capabilities represent a “big shift for the company” that removes that need for users to complete full payment journeys.

With Meta’s CTO also recently predicting that AI agents could disrupt the relationship between products and users by abstracting traditional UI away from users, agentic payments is a step closer to this.

In this Knowledge Series, we’ll take a closer look at the most important technologies behind AI payment agents and how they work along with some real world use cases and opportunities for product teams. Covering the fundamental concepts like tokenization, MCP and more, if you’re keen to get up to speed with what agentic payments are, how they work and how they might impact product teams, this Knowledge Series should help.

Coming up:

• What are AI payment agents?

• How do they work?

• A closer look at Visa, Mastercard and PayPal’s new AI agent payment capabilities

• Key technologies involved including tokenization, MCP and more

• End to end examples

• Real world use cases and opportunities for product teams - how product teams can use agentic payments and the implications for engineers, designers and product managers

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The Knowledge Series

What are AI payment agents?

AI payment agents are specifically designed to handle financial transactions on behalf of users or businesses. In other words, they’re built to buy stuff on our behalf. Many of the major payment gateways like Stripe, PayPal and now Visa offer agentic payment solutions that product teams can use.

While there are some differences between each of the solutions offered by each of these payment companies, the technologies used are similar across the board.

Here’s a snapshot of what a typical Agentic Payment stack might look like today:

You’ll notice that there’s a bunch of different technologies used in AI Agent payment workflows but the end result is that users are able to buy things without ever actually interacting with the end product or service’s UI in a traditional sense.

This isn’t just limited to shopping either; AI agents can make payments on behalf of users to buy things like SaaS products, too. And it goes without saying that this could have a transformative effect on companies reliant on selling software.

The technologies involved in Agentic Payments - a simple breakdown of the important bits worth knowing

Before we look at some real world examples together, let’s break down each of the core technologies used: