AI Agents Bring Shoppers, but Merchants Must Close the Sale

AI agents are bringing new customers to merchants' virtual doors, but retailers face challenges in converting those leads into sales, according to a senior Visa executive. Pavan HS, senior director of product, agentic commerce at Visa, explained that while AI agents know what consumers want, they lack the signals merchants have traditionally relied on for trustworthiness, convenience, and a seamless shopping experience.

For merchants, agentic commerce is just another sales channel, according to HS, emphasizing the importance of trust and convenience for customers.

The process begins even before the checkout, as consumers using AI assistants like Google's Gemini might seek assistance in finding suitable products, such as a winter jacket for a trip to Norway. Merchants then need to provide structured product information to enable agents to match consumer requirements with product attributes. Merchants can choose to sell on other AI platforms or build their own chatbots, each with its advantages and disadvantages.

Existing payment systems must accommodate these new transactions without replacing the merchants' current payment infrastructure. The focus is on ensuring agent-initiated transactions work with existing systems for authentication, fraud, tokenization, disputes, and omnichannel commerce. HS provided an example of a North American merchant that faced complications when a consumer used Gemini to return a purchased item in a physical store, creating issues correlating the original transaction credential with the refunded card.

Visa's token management service helped connect the credentials across transactions, while FIDO-based authentication ensured the consumer authorizing the transaction was using the expected device. Fraud systems face additional challenges due to AI agents' ability to alter transaction signals, requiring merchants to adjust their fraud controls accordingly.

Merchants must also determine whether they are dealing with authorized shopping agents or malicious bots, which becomes complicated when agents' corporate registration, IP address, and consumer information span different jurisdictions. Visa's Trusted Agent Protocol provides merchants with information about an AI agent's origin, intent, and the consumer behind it, allowing them to control what the agent can or cannot do.

Content delivery networks like Cloudflare and Akamai are also developing agent identity protocols to evaluate automated traffic before it reaches merchants' sites.

Once the channel is operational, merchants must monitor authorization rates, chargebacks, and disputes to ensure a successful integration. Agentic commerce may operate in new territories, but its transactions still need to navigate the payment, fraud, and post-purchase systems that merchants rely on.