Today I’m outlining three near-term scenarios (24 months) for how AP2 signals will work in agentic commerce. Per my blog last week, AP2 is the agentic payment scheme with the most momentum (160+ partners), but in the immediate term (2026–2027), it will operate primarily in a “signals” metaphor for 3 main reasons:
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As most of you know, AP2 is an open spec with over 160 partners. Today I’ll discuss 2 scenarios for how AP2 will integrate with card payments (with consumer Authorization). While most understand the technology behind these scenarios, the politics and strategies may provide the best insights. Identity needs a network, but network effects create stasis or equilibrium as existing participants make investments based upon current operation. Cards are the incumbent, and networks have a great plan, the biggest hurdle isn’t tech, it’s getting everyone in the boat with the right controls, governance and economics.
A nice chart covering these scenarios is in this link, courtesy of Notebook LM and Julie Fergeson.
Stripe’s Agentic Commerce Protocol (ACP), co-developed with OpenAI, is a functional leap forward in enabling agentic commerce. While its open-source nature invites broad adoption, Stripe is uniquely able to “make it work” by leveraging its existing fraud-fighting assets. Another less reported benefit of ACP is payment rail agnostic operation. ACP will work for paybybank, PIX, EFTPOS, Swish, Bizum or anything else. Anywhere that Stipe’s device graph and Radar (Risk/Fraud) are effective. Stripe’s secure payment token plus risk signals allow merchants to operate the way they do today (no operational change).
ACP may only have a limited 2-3 yr runway as more advanced authentication methods become mainstream, and network rule sets/services advance to serve all agent providers (leveling the playing field).
Continue readingIn a significant ruling on yesterday (Aug 7)) U.S. District Court Judge Daniel Traynor struck down “swipe fees” cap that non-exempt banks can charge merchants for debit card transactions. The decision found that the Federal Reserve had exceeded its authority by allowing these fees to be higher than intended by law (ie include provisions for “fraud”).
Merchant Learnings
This week I was invited to speak at the Merchant Risk Council’s (MRC) – Santa Clara event. As a former banker, I never gave much throught to retailers. Fraud was something I worked to manage with Account Opening/KYC as a core focus because of the potential for regulatory hot water and NCLs as #2 because it drove reserves, profitability and investor scrutiny. Card transaction fraud was something we worked to keep under a threshold.
I’m glad I made the decision to attend my very first Merchant Risk Council event this week. For those that don’t know, MRC Vegas is the second largest payment event in the US (after M2020) but with a VERY different focus. MRC is attended by the “hands on” payment leaders from all the top merchants and the vendors that serve them: Stripe, Adyen, PayPal, V, MA, risk, fraud, …. Etc. Whereas M2020 is attended by FinTech, Crypto, Venture, Institutional investor, and strategy audiences, MRC is much more focused on making payments work.
Equifax. It’s hard to sit on sit my hands and not write on this one. My perspective is shaped through running 2 of the largest online banks in the world, developing state of the art fraud prevention systems with the top 20 banks, working with Google and today creating Commerce Signals.
Enron has new competition for the company name that denotes loss and fraud. Equifax may be the single largest breach of consumer information in history…. It is everything from social to DOBs, DL #s, …. How did Equifax get our data?
Most of you have read that Walmart, Home Depot and Kroger have launched new litigation against Visa for “PIN” and Debit. This issue is so complex it makes my head spin… For those unfamiliar with some of the basics see this article, my prior blog on PIN debit consolidation, AT Kearney, Digital Transactions: PIN Debit Claw Back and Pinless PIN Debit.
