Owning Your Bot’s Actions: Target Part 2

In my previous post, covering Target’s “Your Bot is Your Responsibility”  was the only move they could make. When you let an AI bot loose with your credit card, you are effectively handing your car keys to a teenager; you can’t act surprised when there’s a dent in the bumper. But Target’s stance isn’t just a legal shield; it is a flare gun fired over a massive Governance Gap. Today’s agentic commerce is high on technology and standards, but dangerously low on the commercial terms that actually make markets function. To be clear, it’s not for lack of effort from V/MA, nor is it technology; it is resistance to change.

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MPP Phase 2 Live – Ask Tom Goes Agentic

Long blog – First 2 Pages are economic implications, last 6 pages are tech deep dive

MPP is a big deal because value exchange enables specialization and market forces to operate (as discussed in last week’s MPP – Addressing the Internet’s “Original Sin”.MPP and X402 are BIG.. really big. A whole new market. This isn’t about cash replacement or taking share from xx this is about enabling a new Economy. Today’s blog is 4 paragraphs of the economic implications (for investors and CEOs), followed by 4 pages on tech detail covering what I built. Please note “Ask-Tom” is just a model of an x402 service…. of course it won’t generate much demand (service ID is at bottom).

First, let me try to explain why this is such a big deal from an economic perspective. The foundational driver for MPP’s success is the radical reduction of transaction costs through standardized commercial terms. As outlined in my 2016 blog Small Wins, the forces that once drove asset-heavy, integrated organizations are atrophying in favor of “refragmentation” and specialized networks. Historically, the economic cost of inking a bilateral contract for every micro-interaction was prohibitive (ex “Account Creation” bottleneck that stifled agentic autonomy). Following the principles of Ronald Coase’s Transaction Cost Economics, MPP and x402 provide the multilateral governance and common commercial rules necessary to bypass these friction points. By establishing trust and speed through a common interface, these protocols allow for the “Small Win” of a single transaction to scale into a global network effect, where the cost of connection approaches zero.

This standardization enables the “Value Assembly” of “super-specialists” who can target previously unreachable “shale deposits” of niche market demand (see Network Effects and Value Assembly). A successful network enables specialists like “Ask-Tom” to provide high-value, grounded intelligence without the overhead of building independent settlement or reconciliation infrastructure. This is far beyond mere “agentic commerce”; it is an evolution in how software and hardware interact with EVERYTHING ECONOMICALLY. For example, MPP’s session-based economics provides a virtual “bar tab” for agents to execute tasks within human-granted budgets, paying only for precise resource consumption. This creates a sustainable commercial model where the incentives for specialization and market forces to operate on software service at a hyper granular level. Market forces in turn encourage specialists to solve increasingly granular problems across diverse domains, and unlocks the “shale deposits” of data that doesn’t play. I’ll discuss what this could look like next week as a follow up to Value Assembly.

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2025: The Great Decoupling

Year-End Payments Recap

Summary: B2B Stablecoin and The End of the Interface Era

As we close the books on 2025, the payments industry finds itself at  a moment that future historians will likely designate as the end of the “Interface Era” and the dawn of the “Agentic Era.” For the past three decades, the digitization of payments has been defined by the migration of human intent from POS to digital screens. From the first e-commerce transaction to the ubiquity of mobile wallets, the fundamental atomic unit of the economy remained the same: a human being, interacting with a graphical user interface (GUI), making a conscious decision to exchange value for goods or services.

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

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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Card VAS Tailwind – Agentic

© Starpoint LLP, 2025. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted, in whole or in part, in any manner without the permission of the copyright owner. Also, see our Legal/Disclaimer (this is a highly opinionated and partially informed blog). Enterprise readers, please consider Enterprise Subscription (not required for Starpoint Clients). 

I’ll be honest, I’ve been watching the “agentic commerce” hype train with a healthy dose of skepticism. The idea that AI agents will soon handle all our shopping feels like a solution in search of a problem. Yet, looking at the data, I have to admit something massive is happening under the surface. We are in the midst of a fundamental change in how the internet works, and while the “Agentic Era” is still 3+ years away, the tremors are already breaking the internet’s business model.

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Machine to Machine Transactions: How to Resolve Trust and Governance Gaps. 

FIDO, VC, AP2, Tokenization, Credential Issuance, Biometrics, …etc

Executive Summary

The transition to agentic, machine-to-machine (M2M) commerce creates a profound governance gap that existing technology-first standards cannot fill. Today, human-in-the-loop (HIL) transactions, whether at a point-of-sale or in eCommerce, are secured not by technology alone, but by the robust, contract-based governance and risk-allocation models of networks like Visa and Mastercard. As stated previously, V/MA are the identity infrastructure for the internet and identity is the core “shaping force” for all new payment schemes.

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Walmart and Open AI

Quick Take

© Starpoint LLP, 2024. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted, in whole or in part, in any manner without the permission of the copyright owner. Also, see our Legal/Disclaimer (this is a highly opinionated and partially informed blog). Enterprise readers, please consider Enterprise Subscription (not required for Starpoint Clients). 

This week: Walmart announced a partnership with OpenAI to integrate shopping directly into ChatGPT, complete with an Instant Checkout feature. The market reacted instantly, driving WMT stock up over 5%. If you weren’t already paying attention to agentic commerce, you should be now.

For experts in payments and eCommerce, this deal is the ultimate realization of Walmart’s Everyday Low Prices (ELP) strategy. ELP is their cornerstone, and when you lead on price, you can afford to be channel agnostic. Walmart is signaling that they will be everywhere the customer is buying.

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Stripe Agentic Commerce Protocol (ACP)

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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Governance in Payments

© Starpoint LLP, 2024. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted, in whole or in part, in any manner without the permission of the copyright owner. Also, see our Legal/Disclaimer (this is a highly opinionated and partially informed blog). Enterprise readers, please consider Enterprise Subscription (not required for Starpoint Clients). 

Long blog – Paid Content

Executive Summary

I’ve been writing about governance, trust, transaction costs and payments for a long time. In my view THE KEY to understanding how stablecoins, agentic, DeFi, Open Banking, tokenization and other payment innovations is governance. I seem to be the only one writing about it, so I don’t see a reason to stop now. Governance is the BIGGEST competitive moat for Visa and Mastercard, and its also the heart of their biggest break out growth opportunity. If you thought AI was transformational, radically reducing transaction costs (TCE per Nobel work of Ronald Coase) will dwarf it. In fact the monetization of AI is a Gordian knot of governance issues (see Agentic Commerce and Governance). 

Today I’m expanding on “value exchange” governance with 5 core themes.

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