Visa Says Small Merchants Could Move Faster on AI Shopping

Small merchants are preparing for a new era in customer acquisition, where artificial intelligence (AI) could help them be discovered before any visit to their website, app or store. However, only 11% of small-to-medium-sized businesses (SMBs) are currently ready for this shift, compared to 19% of large merchants. While 15% of all merchants have structured product data for agent access, 68% of them expect AI agents to contribute at least 5% of digital sales within two years, and 38% anticipate more than 15%.

Sara Craven, general manager of Verifi / ANET at Visa, believes that small businesses may be able to adapt and move faster than their larger competitors. With AI, SMBs can learn and adapt more quickly, which is where the opportunity lies. By improving their product catalog with precise descriptions, inventory, sizes, prices, payment options, and loyalty information, SMBs can ensure that AI models have enough information to provide specific shopping recommendations.

For example, when a shopper asks an AI model to find a specific dress for an October wedding in Paris, a well-described dress in a Paris merchant's catalog could be surfaced by AI, even if the shopper never encounters the merchant through conventional search. This could give small businesses a competitive edge in the agentic world of AI-driven shopping.

However, the benefits of AI for small businesses are not just at the discovery stage. While shoppers can currently use AI to find specific products, completing a purchase independently is not yet widely available. This creates a measurement problem for merchants, as 23% of them can only identify AI-driven traffic and completed purchases, while 37% cannot distinguish AI-driven traffic from other digital traffic.

To capitalize on AI, merchants are making strategic investments in areas that directly contribute to growth, such as checkout, payment choice, and fraud controls. For example, 57% of merchants reported growth in sales through their own apps, which outperform their websites on 11 of 14 digital payment capabilities. Apps offer features like authorization, account verification, settlement, and fraud controls that are essential for merchants preparing for agentic transactions.

However, the transition to AI-driven shopping is not without challenges. Merchants must ensure that their products are understandable to AI before a shopper even reaches checkout. This requires accurately describing products and their attributes, which can be a daunting task for small businesses. Additionally, merchants must develop and implement robust fraud controls that can distinguish legitimate user-directed agents from unwanted automated activity without rejecting good customers.

In summary, small merchants have a unique opportunity to leverage AI for customer acquisition and growth. By improving their product catalogs, implementing robust fraud controls, and focusing on essential checkout and payment features, SMBs can position themselves to succeed in the agentic world of AI-driven shopping.