Artificial intelligence may be changing where consumers decide what to buy before it changes where they pay for it.
“We are seeing adoption for shopping, but not yet for autonomous payments,” Visa CEO Ryan McInerney said Tuesday (Sept. 8) at the Goldman Sachs Communacopia + Technology Conference.
Consumers are using large language models and other platforms to compare products, shop and identify items, McInerney said, but are still moving to sellers’ websites to complete transactions. Getting beyond that point presents a trust problem on both sides. Sellers need to know that agents entering their sites are legitimate and have been empowered by consumers to transact. Consumers have to trust agents with their money and financial information.
“The barrier to that, if I had to describe it in one word, would be trust,” McInerney stated during the appearance at the conference.
He said three-quarters of consumers surveyed didn’t trust agentic platforms to make payments autonomously with their money and financial information. When asked whether they would trust an agent to make payments if Visa were involved, 61% said yes. McInerney said that figure exceeded 70% among consumers who use LLMs at least weekly.
Fraud prevention is also moving further upstream. McInerney said Visa has traditionally provided banks and merchants with tools to identify transaction fraud, while clients are now seeking products that address identity risk before it results in a fraudulent transaction.
“Identity has become a critical area of vulnerability,” he said in discussing Visa’s planned BioCatch acquisition. McInerney said BioCatch can help clients protect identities on mobile devices before identity theft leads to a fraudulent transaction.
Cybersecurity ranks among the most pressing issues McInerney hears from financial institutions, which he called a “top 3 issue” for every client he talks to around the world. Visa is also applying newer AI tools internally. McInerney said its teams are producing 80% more code commits, reducing the time required to design and build a product by 80% and developing features 65% faster.
Tokens Give Payment Networks Another Route to Customers
Tokens are also giving Visa a way to distribute services beyond the payment credential itself.
“As we’ve scaled our tokens around the world, that gives us a distribution platform for more risk-and-identity solutions, as well as transaction solutions,” McInerney said.
He said Visa has captured only a “very low single digits” share of the addressable markets it sees across issuer services, acceptance, risk and identity, and advisory. Global credential growth has been running at roughly 6% to 7%-plus, which McInerney said helps fuel further growth in issuing revenue.
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Processing represents another part of that expansion. McInerney said two issues drove Visa’s decision to acquire Pismo. Many bank CEOs were deciding whether to move their technology to the cloud, while FinTechs expanding rapidly into emerging markets and other countries were struggling to find issuer-processing technology capable of expanding with them.
“They couldn’t find an issuer processing stack that was global enough, nimble enough, and cloud-native,” he said.
In the U.S., McInerney said Visa sees a market among small and mid-sized banks and FinTechs seeking integrated credit and debit issuer processing. He expects the largest, more sophisticated issuers to continue operating customized credit and debit stacks separately. Visa is also encountering demand for integrated issuer processing outside the U.S.
Core modernization has proceeded more slowly. McInerney said few large banks globally have moved their cores to the cloud, although many are considering or working on such moves. Cloud-based cores, he said, can make banks more agile and allow them to deploy products more quickly.
The scope of issuer negotiations reflects that broader set of products. McInerney said issuers are looking beyond consumer payments to commercial payments, Visa Direct, value-added services and processing, including issuer and core technology.
Money movement adds another set of markets. McInerney put the remaining addressable market in consumer payments at roughly $2 trillion, much of it still represented by cash and checks in markets around the world. Visa Direct, he said, reaches 18 billion endpoints across accounts, cards and wallets and supports P2P, B2C and C2B transactions. He also identified higher-value cross-border B2B payments as an opportunity.
Stablecoins could serve some of those cross-border use cases. McInerney said Visa sees product-market fit in two areas. One is what he described as probably 50 countries where consumers, families and businesses have wanted to hold U.S. dollars but have faced cost, availability or other barriers to doing so through bank accounts. The second is cross-border money movement, including remittances and B2B payments.
The newer businesses are developing against consumer spending that McInerney described as showing “strength and stability.” He said Visa’s U.S. business has grown roughly 6% to 8% for about a year and a half, reached 10% growth in the latest quarter and was running at approximately 9% through August. Cross-border growth accelerated from about 12% in the previous quarter to 14% through August, with eCommerce continuing to grow faster than travel.
Competition also extends beyond other global payment networks. McInerney said payment sovereignty has become a more prominent subject in Europe, where domestic card networks and digital wallets already compete with international networks and Wero is developing another European alternative.
“The market is competitive, and it’ll get more competitive,” he said.
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