Agentic AI in Payments: A New Era for Financial Infrastructure

Strategic Partnerships: The Cornerstone of Agentic AI Adoption

Mastercard, Visa, and PayPal have positioned themselves at the forefront of agentic AI in payments through bold partnerships and platform innovations. Mastercard's Agent Pay initiative, built on tokenization and trust, enables AI agents to autonomously research, negotiate, and complete transactions based on user preferences, according to a Forbes report. Similarly, Visa's Visa Intelligent Commerce allows AI models like ChatGPT to access credentials via a delegated authorization model, streamlining purchases, per the Forbes report. These platforms are not just technological feats but strategic moves to dominate the "card-agent-present" era, where AI agents replace traditional card-present transactions, according to Payments Dive.

PayPal, meanwhile, has partnered with Perplexity to power agentic commerce, enabling agents to trigger payments autonomously, according to McKinsey. These collaborations highlight a broader industry consensus: agentic AI is not a niche experiment but a foundational shift in commerce. However, the absence of direct partnerships between major payment processors and agentic AI specialists like C3.ai raises questions about the latter's ability to penetrate this space.

Merchant Adoption: Promise and Pitfalls

While the technology is advancing rapidly, merchant adoption remains uneven. C3.ai's Strategic Integrator Program, which licenses its agentic AI platform to partners, has seen 60 large-scale deployments in sectors like manufacturing and defense but lacks concrete examples in financial infrastructure, as detailed in a Seeking Alpha article. This gap underscores a critical challenge: agentic AI's potential in payments is still being tested in real-world scenarios.

Deloitte's analysis emphasizes that early adopters are focusing on high-impact, low-risk use cases, such as anti-money laundering (AML) and supply chain automation, according to Deloitte's analysis. For instance, BNY is using AI agents for payment instruction validation, while Mastercard's Agentic Tokens enable secure, transparent transactions. Yet, regulatory hurdles and legacy system integration remain significant barriers. Banks must reconcile agentic workflows with existing compliance frameworks, a process that could slow widespread adoption, per Deloitte.

The Road Ahead: Execution Risks and Market Potential

The agentic AI payments market is projected to grow at a 34.9% CAGR through 2029, driven by demand for operational efficiency and grid modernization, according to a GlobeNewswire report. However, execution risks loom large. C3.ai, despite its $2 trillion addressable market estimate, faces declining gross margins and stiff competition from Palantir and BigBear.ai, as noted in the Seeking Alpha article. Meanwhile, Mastercard and Visa's partnerships with Microsoft, IBM, and Stripe - reported by Payments Dive - suggest a race to establish interoperability standards, which could lock out smaller players.

For investors, the key differentiator will be companies that balance innovation with execution. JPMorgan Chase's LAW (Legal Agentic Workflows), which automates legal document processing with 92.9% accuracy, exemplifies how agentic AI can create defensible moats in niche areas, according to Deloitte. Conversely, firms like C3.ai must prove their platforms can scale in competitive markets without sacrificing profitability.

Conclusion

Agentic AI in payments is no longer a theoretical concept but a tangible force reshaping financial infrastructure. Strategic partnerships are accelerating its adoption, while merchant use cases-from AML to agentic commerce-are demonstrating its value. Yet, the path to dominance is fraught with challenges, from regulatory complexity to execution risks. For investors, the winners will be those who can navigate these hurdles while scaling their platforms into the $2 trillion opportunity.