Synchrony Says AI Has Put Every Checkout in Play

Watch more: What’s Next in Payments With Synchrony’s Maran Nalluswami

Agentic commerce is forcing payments companies to make investment decisions before they know where the transaction will ultimately take place.

A shopper may begin with an artificial intelligence platform, move to a retailer’s website and finish in a store. Over time, the AI platform itself could become the place where the purchase is completed. Each possibility changes where merchants need their products to appear, where payment credentials must be available and which companies retain the relationship with the customer.

For Maran Nalluswami, executive vice president and chief strategy and business development officer at Synchrony, that uncertainty calls for what he described as “a dose of healthy paranoia.” Nalluswami discussed the idea in a PYMNTS “What’s Next in Payments” interview centered on former Intel CEO Andy Grove’s observation that companies can miss strategic inflection points when the rules of their industries change before management fully recognizes what has happened.

Paranoia isn’t an instruction to chase every new technology, Nalluswami said. However, it’s a reason to listen closely enough to detect a material change and then test what the market is saying before committing resources.

“You can’t have a knee-jerk reaction to anything,” Nalluswami said, adding that his sequence is to listen to merchants, consumers, employees and people outside the company, then validate whether the apparent change is real.

Agentic commerce is giving that process a rigorous test.

“The concept of agentic commerce, of agents doing the shopping for you, is like nothing we’ve seen before,” Nalluswami said.

He contrasted its pace with changes in payment rails, cryptocurrencies and the long-running shifts between debit and credit. These developments have unfolded over time. Agentic commerce is arriving more rapidly.

The commercial implications begin with product discovery, Nalluswami said. Large retailers initially expected AI shopping capabilities to reside primarily on their own websites. As consumers began turning to outside AI platforms for product research, the strategic calculation changed. Payments and financing might need to follow consumers into environments outside the merchant’s direct control.

That migration is far from complete, Nalluswami said. Consumers who use AI tools for research still generally complete purchases elsewhere, whether on a brand’s website or in a physical store. The uncertainty concerns how long that separation between discovery and transaction will last.

“You almost have to place bets along the entire experience right now because the experience has not been won by anyone yet,” Nalluswami said.

Merchant Size Changes the AI Calculation

The agentic discussion can obscure a division within the merchant market. Large retailers and small businesses aren’t approaching the transition with the same requirements.

Sophisticated retailers are already telling their payments partners that products and financing must be available at the point where a consumer chooses to shop, Nalluswami said. These companies have the resources and technical expertise to think about how their catalogs, payment options and customer relationships might operate across emerging AI ecosystems.

Small merchants have a more practical demand.

“Those folks want ease and the most frictionless experience possible,” he said.

For a small retailer, veterinarian, jeweler or other business, the immediate concern is whether technology helps a customer complete a purchase without imposing another layer of complexity on the merchant, Nalluswami said. As a result, payment providers may have to accommodate large merchants experimenting with new points of discovery and transaction while giving small businesses access to those changes without requiring them to build or manage sophisticated AI infrastructure.

Trust becomes more consequential under these conditions because AI potentially adds another party to the commercial relationship. A consumer may rely on an agent to identify the product, compare alternatives and eventually select a payment method. Merchants still need confidence that their products and information are represented correctly, while consumers need confidence in the transaction and the use of their information.

Trust also runs through his description of changing consumer loyalty. Young consumers may discover products through social platforms and recommendations rather than begin with an established preference for a retailer. This can make the source of the recommendation itself part of the commercial relationship.

Nalluswami said he believes payments have reached an inflection point, although he doesn’t regard the window for responding as closed. Wallets and processor ecosystems could become more important because stored credentials can allow purchases to move among merchants without requiring consumers to enter another card. These systems could also influence which payment option is presented when a purchase occurs.

“I don’t think the inflection point’s moving so fast that you can’t adapt to it,” he said, “but it’s important that you stay ahead.”

Watch the full interview with Synchrony’s Maran Nalluswami to learn more about:

Why conversations with banks, FinTechs and other industry participants can give executives a different picture from the one conveyed by competitor announcements.

How changes in consumer loyalty are altering the connection among value, merchant relationships and payment choice.

Why wallets linked to processors and merchant ecosystems could affect which credentials consumers use as commerce moves across channels.