Tag Archives: visa

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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Pay by Bank Double Whammy

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I’ve never been a fan of “Pay by Bank.” It’s a solution in search of a problem, especially when compared to the efficiency of debit cards and the global reach of Visa Direct. Now, two major developments have dealt a significant blow to the already weak business case for this payment method.

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Stablecoins Will Drive Network Growth

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Drivers, Current Efforts and My View of the Big Picture Opportunity. Do Stablecoins represent the greatest network expansion opportunity of the next decade? I think so…

PODCAST of this Blog on Spotify

Everyone knows I’m a big fan of Visa and Mastercard. Why not? They are the most successful commercial networks in the history of man. The power of banking is unlocked within the networks that connect them (see Power of Bank Networks) and V/MA are the largest “connectors” in the world (banks, consumers, businesses). While many pundits see stablecoin as a threat to cards, I don’t see it that way at all. In fact, I think Stablecoin-based innovation will help drive a new phase of growth in the networks (as well as dollarization). 

Today’s blog provides background on the current network efforts in stablecoin settlement. I’m also attempting to outline the “why” and business case for card networks expanding their role, the number of nodes on the network, and the political dynamics at work behind the scenes. Why read this? In my view this subject is the core of a bull case for network expansion.  IMHO Investors should not look at stablecoins as a threat to V/MA, but rather as another network where V/MA can deliver value and grow the network at a massive scale.. A once-in-a-generation opportunity.

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Genius Law – What to Expect?

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Yesterday President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law, clearing the path for dollar-backed stablecoins. As I’ve argued before, the future of money is a new model of trust, and this legislation provides the regulatory certainty needed for that trust. 

The GENIUS Act is a landmark piece of legislation. It establishes a dual charter system, enabling both federal and state-regulated stablecoin issuers. The key provisions are precisely what the industry needed: a mandate for 1:1 reserves with high-quality liquid assets like cash and short-term treasuries, a prohibition on reusing those reserves, and the designation of issuers as financial institutions under the Bank Secrecy Act. This isn’t just about compliance; it’s about building a foundation of trust that can be exported globally.

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The Wero Wallet: A Solution in Search of a Problem?

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I’m a reluctant payment historian. Over my 30 yrs I’ve seen many payment projects come and go. The latest is the European Payment Initiative’s (EPI) new wallet, Wero. Billed as Europe’s homegrown answer to Visa and Mastercard, it carries the significant political weight of figures like ECB President Christine Lagarde, who frames it as a “march to independence”. While the political ambition is clear, I believe the business case is fundamentally flawed.

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Retail Banking and Stablecoins

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Friction, Float, and the Future

As a Banker, Founder and Payment Historian who has spent too long watching icebergs melt, I’ve seen many technologies promise to upend the banking industry. Most have been evolutionary, not revolutionary. But the advent of digital dollars, particularly consumer-facing stablecoins, are unique. Payments are the core of retail banking and profitability. Payments are a networked business, not just in card but in every consortium and association. As I outlined in The Power of Bank Networks, these networks are the engines that drive economies and how banks connect to the environment. For my colleagues in banking and payments, understanding how (or if) stablecoins impact payments is very important.

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Stablecoin Winners and Losers

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Summary

Winners:

  • Card Networks (Mostly Insulated): Their core business as ubiquitous real-time messaging networks for authorization and value-added services is largely unaffected. They are the top on=ramp (Visa Direct) and the top off-ramp (linked card). Networks will expand services to support issuer demand for stablecoin settlement and services. Within OECD 20 markets, there is no merchant demand for stablecoin in eCommerce.  
  • Emerging Markets: Stablecoins provide crucial financial access, inflation hedging, and efficient remittances where traditional banking is broken or local currencies are unstable, especially in Africa.  
  • Edge and Non-Card UCs. Low value payments, remittances, … 
  • Corporate Treasury and Treasury Platforms: Fortune 100 enterprises gain significant efficiencies in cash management through real-time liquidity, reduced costs, and enhanced transparency.  
  • Dollarization – US Treasury: The growth of USD-pegged stablecoins, driven by regulations like the Genius Act, creates substantial demand for US Treasuries, reinforcing dollar dominance. Tether is already a top buyer.  
  • Existing Banks: Despite some fee pressure, banks are adapting by integrating stablecoins into their services, leveraging their customer relationships and regulatory expertise to remain central players.  
  • Fintech Enablers (Stripe, Shopify): These platforms expand their global reach by making stablecoin acceptance and payouts easier for merchants, particularly in cross-border commerce.  
  • KYC/AML Service Providers: Increased regulatory clarity and stablecoin adoption drive demand for robust identity verification and anti-money laundering services.
  • Wallets/Consumer Champion? PayPal? Enabling wallets in non-carded markets and a new model in eCom and POS (this is Stripe Privy).
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B2B Payments: Cards, RTP, and Stablecoins 

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Exec Summary

  • B2B payments are a great source of growth for card and RTP networks, with 90% of volume remaining on check and ACH. But investors and innovators hoping to flip volume must assess the market with a great deal of skepticism. No one wants to pay a bill more quickly. There are 2 key factors to look at when assessing B2B payments: 1) Who holds the power in the relationship (ex Supply Chain Channel Master) and 2) How is it sold and bundled with other services (ex Quickbooks/SAP procurement).

  • I don’t see this as an impact to any current GDV flows in next 3 yrs, only growth impairment. It takes time to change contracts.

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Stablecoins – A New Model of Trust enabled by Technology?

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Part 1 – Programmable Settlement

Summary

The defining innovation of stablecoins is not the technology itself, but the trust architecture they enable. While today’s business architecture will NOT be turned upside down, the stablecoin frame does enable new models for managing legal contracts, systems interaction,  operational governance, all within a new regulatory superstructure.

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