Tag Archives: risk

UCP Enables a New Economy

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Yesterday, Google’s CEO unveiled Universal Commerce Protocol (UCP) at NRF.  UCP represents a defining moment in the architecture of digital commerce; the strategic imperative is no longer merely about organizing the world’s information but about organizing the world’s commercial intent and empowering merchants to leverage their own data to construct superior customer experiences.  This shift is not incremental; it is a fundamental re-platforming of the digital economy, where Google is uniquely positioned to serve as the orchestrator within a “virtuous cycle” of interaction among retailers, consumers, and intelligent agents. 

“For many people, discovery is the fun part of shopping. Making a decision is where things get harder. As an indecisive shopper myself, I’m looking forward to the day when agents can help me get from discovery to purchase.

At Google, we’re busy laying the groundwork for this agentic ecosystem to work well. That includes building a common language for these systems and services to talk to each other.

As a next step we are introducing the Universal Commerce Protocol (UCP), designed for the era of agentic commerce. It was built to meet the needs of retailers AND customers, keeping the full customer relationship front and center — from the moments of discovery to decision and beyond”. – Sundar Pichai NRF – Jan 11 2026

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AP2 as Merchant Signals – 4 Scenarios 

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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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Discount “On Chain”. Value Exchange and Commercial Frameworks Will Define Success

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Case studies in Agentic and JPM Kinexys

Key Themes

  1. Value exchange requires a commercial construct such as a contract, marketplace agreement or commercial network.

  2. Tech is enabling fragmentation both within an organization and across domains with finer-grained access to services (ex APIs), faster settlement (ex blockchain), immutable digital representations of physical world goods (ex NFT), digital trust and assertions (ex W3C Verifiable Credentials), …etc.

  3. While the tech is progressing at light speed, the real battle surrounds the structures, incentives and politics for how value is exchanged, and risk is assumed. 

  4. This atomization of products, services and organizations has created new opportunities for value orchestrators. For example, what if the battle for AI and Agentic Commerce is not about LLMs efficacy, but about enabling consumers to choose the best agent and permission it from their phone (ex Apple). 

  5. Free and Open are great tech models, but terrible business ones (ex Open Banking). Fragmented voluntary Agreements in Web3 and Agentic Commerce spaces struggle to scale due to high transaction costs associated with establishing bilateral trust.

  6. We are in a flux period where incumbent marketplaces and networks will dominate.  For example, there is little prospect for OpenAI to disrupt Google across 7B+ Devices, 3B+ consumer accounts, GC, Advertising, Analytics, Consumer/Enterprise Services. While the buzz of “on chain” finance is loud, application of DLT in closed private blockchains is driving the majority of growth by bringing new efficiencies to established businesses (JPM Kinexys). 

  7. While alternative “federated” and decentralized models are possible, their core challenges surround economics and governance. Who owns the end-end risk?  Who manages bad actors or system flaws? Where is the commercial agreement that assigns risk? 

  8. The next 10 yrs will NOT be a uniform movement toward one single future, but a fragmentation of how value exchange happens. For example, how identity is handled in Agentic commerce will depend on WHO owns the risk for the transaction (merchant, bank, PSP, Platform, Consumer)?  

  9. At the consumer end, I see mobile platforms acting as the controller/orchestrator for trusted interaction across healthcare, retail, government, agentic … etc. I wouldn’t count Apple “out” of the AI race as they may assume the consumer interface role for “everything”.

  10. Kinexsys Case Study – Closed network, strong governance, massive scale. 

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Stripe Agentic Commerce Protocol (ACP)

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The best, and perhaps only, operable protocol that can solve agent payment issues today.

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).

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Google Rolls out Agentic Payments Protocol (AP2) – Techie Blog

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Yesterday Google rolled out AP2. Key summary bullets

  • I applaud Google’s efforts to advance AP with first focus on enabling a “Trusted Agent Economy”. AP2 (V0.1) on establishing the core architecture and enabling the most common use cases (cards, data payloads to support VC, human in the loop scenarios with step up). 

  • Long list of supporting participants including MA and Amex. However, no other AI platforms, nor Visa, Paze, or US Banks. 

  • Good detailed documentation on initial flows (see Github)

  • Introduction of Verifiable Credentials (VC) as the core of AP2 with a recognition that merchants (who own risk) may also need transaction fraud data. 

  • A twist on the identity provider of VC to become the [Payment] Credential provider, with initial focus on cards, Google has stated goal of designing AP2 to support stablecoin, push payment and other payment types. This “sets up” Visa and Mastercard to retain their roles as the authentication infrastructure for the internet, while also allowing for other networks (India UPI) and seperate identity providers (eID) to operate with the role.

  • My read is that Google has given up hope of making AP2 work in US, as Visa’s intelligent commerce framework is further along.  How tokens, Issuers and networks work within AP2 is not a big technical effort, but there are several things missing from AP2, for example the rule sets (3DS, DAF, TAF, …etc) which the credential (and transaction) operates under. 

  • The framework is solid, authentication will be a huge part of the challenge here.  Payment networks must control how authentication is performed by with their credentials. Visa and mastercard are the authentication infrastructure for the internet for a reason. Its not the technology, it is the governance, standards, enforcement and the operating rules which govern WHO OWNS THE RISK when authentication has broken. See Identity Models and Governance https://blog.starpointllp.com/?p=6470 

  • Of course stablecoins could work here, but guess who owns the risk when something happened that wasn’t authorized? There is no bank to complain to.. Your automated agent made a mistake and you (the consumer) have the loss.

  • AP2 will be successful as the communication protocol for between agents and stakeholders, but it requires credential providers with strong governance and operating rule constructs. Visa, MA, Amex, UPI/UIDAS and PayPal all fit that bill.  The challenge with this dependency is that the control points for progress are complex, as any change in a network requires buy in from existing stakeholders.

  • Expect Google to demonstrate the technical efficacy of AP2 with Stablecoin or Crypto first, and then look to adapt AP2 needs to credential providers

  • While the EU is the best market for Google to begin with, regulators are not keen on doing anything to help US big tech. My recommendation to Google is work on a US focus plan B that will involve US credential providers (ie Visa and Visa banks). AP2 can be the protocol, but most of it will need to operate within the authentication and rules of the credential provider.

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Understanding Merchants – Cards on FIle

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Why merchants prefer cards they control. Implications for Agentic, Pay By Bank and beyond… 

Short Blog. My last blogs on the topic were Acceptance Hurdles (2022) and the more technical list of 14 core processing activities in Acceptance Part 1 (2016). 

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Identity, Authentication and Risk

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Bridging Domains – Short Blog – Random Thoughts

This is a “Random Thoughts” blog, which means there are many points that I’ve left hanging (not finished cleanly). The blog’s objective is to stimulate discussion, so please don’t hesitate to comment.  Identity is a hot topic for me with 15+ years of previous bosts. Here are a few updates … as well as my evolving perspective. 

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Part 2 – The Power of Bank Networks

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The Bull Case for V/MA (24 pages). 

© Starpoint LLP, 2022. No part of this site, blog.starpointllp.com, may be reproduced in whole or in part in any manner without the permission of the copyright owner.

Part 1 – US Payments Environment covered the complexity of the US payment environment and the challenges faced by top banks in modernizing their systems (where all systems live forever). There are many types of payments: bill payments, A2A, P2P, wires.. Today the focus is on how banks intermediate commerce. Banks MUST have networks as every bank can’t connect to every consumer/merchant. Effective Bank networks (aka rails) are NOT a commodity service, but one that allows the banks to leverage their unique ability to assume risk.

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FedNow

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Very short Blog – Recapping a few tweet streams.

I think FedNow is a great effort to provide an open alternative to TCH’s RTP. I’ve spoken with, and consulted for, the KC fed on a number of occasions and provided my input to the FedNow service back in 2013. Per my blog last week the survey result from the Fed’s efforts found “emergency bill payment” as the top consumer use. Paying someone faster brings on risk. The Fed depends on banks to manage risk and price that risk. As a former banker running payments at 2 of the largest banks I have a view here.

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Payments and the Observer Effect

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Most of you techie’s out there had a physics class at some point and can recall the Observer Effect in Quantum Physics: the act of observation can change the measured results. Observation in payments has become the second largest driver of margin and has enabled many new specialists…. so I thought I’d outline some broad thoughts and tell a few stories. 

Why is observation important? Payment behavior is truth marked data of what a consumer actually did (offline). While I may search for Ferrari’s, or visit dealership (mobile location) what I actually bought is much more important in predicting behavior and evaluating risk.  Purchase data is the most valuable data for that reason (and issuing banks had a lock on it.. Until about 5 yrs ago). The lock has been broken and payment data has become the “missing link” to unite heterogeneous data sets. 

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