Tag Archives: visa

Explaining the Death of OpenAI’s Instant Checkout

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Short Blog

To my regular readers, you know the flow of data within a network is complex (see Data Games). The news that OpenAI is effectively shelving its “Instant Checkout” initiative in favor of a referral-based “conversational commerce” model shouldn’t come as a surprise. While the tech press might frame this as a strategic pivot, those of us in the eCommerce trenches know it for what it is: a collision with merchant’s role in risk, costs, CX, control and their own AI dreams.

OpenAI attempted to solve its monetization problem by trying to seize control of the top of the funnel, betting that the sheer volume of consumer demand would force merchants to bow to their interface. They were wrong. They fundamentally miscalculated the power dynamics of the transaction and the complexity of the global conversion funnel, a funnel that Google understands intimately because they serve both ends of it globally (ie merchant partners).

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MPP Phase 2 Live – Ask Tom Goes Agentic

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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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MPP (and X402) – Solving the Internet’s “Original Sin”

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Yes another agentic payment acronym. This one is important enough to remember. Where AP2 and ACP address agents acting on behalf of humans, X402 and MPP are about agents paying agents. My friend Simon Taylor just put together one of his all-time best posts on MPP and The Intention Layer. Today’s blog is a follow-up with a bit more of a comparison, and why this is a big deal from a payment and economic perspective. My key takeaways from Simon’s post

  • The “Skinny Master Account”: Taylor suggests that humans will grant “intent” (a budget and a goal) to an agent. MPP’s Session model perfectly mirrors this: a human “locks” $50 into a session (the intention), and the agent autonomously spends it in sub-cent increments (the execution).

  • The Substrate of AI: Taylor points out that AI thrives on Structured Text (Markdown). Ironically, legacy finance (ISO 8583, NACHA files) is essentially structured text. MPP acts as the “translator” between the agent’s markdown-based intentions and the rigid requirements of the global banking system.

  • The Outcome: The winner won’t be the protocol that is “most decentralized,” but the one that most effectively manages Trust and Permissioning. Stripe and Visa, as the incumbent trust-layers of the internet, are better positioned to solve the “Agentic Spend” problem than a pure-crypto protocol.

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Stablecoins Are Not Free — Why They Are A RAIL in Consumer Payments

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There’s a narrative running through payments circles right now that goes something like this: stablecoins will replace card rails because they’re cheaper, faster, and programmable. Stripe makes acceptance easy. Card networks are too slow to innovate. Machine-Machine payments need programmability. GENIUS Act passed. The future is obvious.

I’ve been writing about stablecoins for over two years, from the case for stablecoin as a trust platform to the ECB’s monetary sovereignty alarm. And I keep coming back to the same conclusion: stablecoins are not a replacement for cards, but rather another rail with cards retaining their role as the layer of abstraction for multiple networks (as they do today). They will do well where cards don’t play (micropayments, B2B and uncarded markets).

Here’s why (and why that matters more than you might think).

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Agentic Recap – Last Week’s Big Announcements. 

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Sorry for delay.. Just had a new grandson on Wednesday, and everyone is doing fine. One quick note, if your looking for one of my old posts, or topics like AP2, try my new search. Completely rebuilt to look through my posts and all “trusted” authorities on a topic.

Exec Summary

Last week’s flurry of announcements confirmed our thesis: Agentic commerce is off to a slow start, and the “machine-to-machine” (M2M) revolution is currently a “human-in-the-loop” (HIL) reality. Despite the hype, machines aren’t autonomously settling transactions yet; they are discovery engines landing consumers on retailer checkout pages. While “lab” pilots show machine to machine transactions are technically possible – in a lab. The reality is conversational commerce, more like an enhanced search. 

Key Items covered today

  1. Agentic Hurdles are huge. Changing consumer behavior, shifting risk, economic “Gordian Knot” of value creation and pricing, Trust and Authorization, …etc. The payment piece is the “easy” party.  There will be no wholesale change in the next 2-3 years, merchants and marketplaces want to retain consumer behavior and leverage their own data, the future for most transactions will be a checkout on the merchant’s website. 

  2. Card networks are firmly established as the payment method and will retain their role as the identity infrastructure of the internet. Stablecoin is a settlement  innovation, and cards can sit on top. Visa is at least 2 yrs ahead of MA. MA’s agent pay integration to Google’s AP2 mandates is still a lab experiment that will require both Issuer and merchant approval. For example Banks will want the full intent mandate to take the risk, something neither Google nor Merchants will be keen to share. 

  3. OpenAI’s abandonment of their own wallet is very significant and a realization that merchants hold the keys in the early days of eCom, with many major merchants wanting a PAR to reference COF, not a tokenized credential where they own the risk. 

  4. Visa’s two big announcements are significant. The partnership with Bridge to issue stablecoin linked cards in 100 markets will propel a new market for cards in M2M based UCs.  “INTELLIGENT AUTHORIZATION” a universal acceptance API against different schemes and payment types, thus eliminating the need for costly infrastructure rebuilds. 

  5. When perfect authentication does happen, it will be a watershed moment for payments and every entity that provides risk services. Processors will be particularly hard hit, afterall how will processors differentiate when every payment type has 0 fraud and 100% authorization rate. Shopify and other merchant service providers (MSPs will gain significant leverage and expand their own VAS). This dynamic explains why Stripe is investing so heavily in Stablecoin, its an effort to differentiate and improve speed and a developer community in something unique.

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BankID Norway – Evolution and Success

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If you follow my 80+ blogs on identity, you should like this success story today.  The Norwegian digital identity scheme, BankID, serves as the #2 best financial identity case study (behind India’s UIDAI) with a penetration rate of 97% across 4.7 million citizens. What could US banks learn? What are their challenges in replicating this model? 

Today I’m giving the background on what BankID is.. In part 2 I’m going to interview my good friend Eric Woodward, former president of Early Warning and the creator of Zelle_ID (see youtube), at least until it was killed as the new CEO asked “what on earth does identity have to do with payments”. OMG

The FIDO Alliance is hosting a Webinar on Bank ID Norway tomorrow at 7am pacific.

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Keeping Up With Chaos: A Payments Stakeholder Reality Check

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Short Blog – Bullets

It’s getting harder to keep up with payments, a subsector that has not been great for payment investors, between the Saaspocalypse, AI, agentic commerce, stablecoins, the Genius Act, open bank charters, and COF buying Brex, we are deep into “what just happened?” era. While I see tremendous opportunities, not everyone is impacted the same (see 2025: The Great Decoupling).

You don’t read this blog for deep tech insight; you read it to understand where change is actually happening and where the money, risk, and power are moving. Today is a short recap of which stakeholders face the biggest near-term impact, where progress is being made and where investment is flowing.

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CCCA: 5% chance that 5% of Network EBIT could be affected (in 2+ years)

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Update to my 2023 blog on CCCA Complex Politics and Consequences. I’ve spent the last few weeks digging into the latest bill and I see an overstatement of potential impact that most analysts seem to have missed:

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