00:24:45 · Aman Narain, Zubin Vandrevala
[00:24:45] S0: So essentially, one measures the till, one the hand on the basket, and one the whisper in your ear. [00:24:52] S1: Yeah. And I know you got to the biggest one. And then our our friends at McKinsey, the longest ruler, come that up to a trillion dollars in The US and, you know, somewhere about 3 to 5,000,000,000,000 with a t globally by 2030. And this is for consumer goods orchestrated by agents, and orchestrated is doing the heavy lifting. It's not about completed. [00:25:16] S0: And what about Gartner's 15,000,000,000,000? [00:25:18] S1: Alright. That's different planets. Right? So I think that's more b to b buying. I think it's by 2028. Bigger and boring first because purchase orders and approved suppliers come with card raised built in. [00:25:30] S0: Okay. Payables agent pays suppliers invoices against purchase orders with scoped credit card credentials. Visa is piloting exactly that with Bill and Bill Trust. Now the number I promised you, the one that should make you doubt the hype. [00:25:49] S1: Less than 1%. Bain in May, AI is under 1% of total retail website traffic, even where it's up to quarter of outside referrals. And I think checkout.com did this... Their own data report in in July, puts agents at about 3% of transactions. [00:26:11] S0: And yet, the people who do arrive from AI, they buy.
00:26:11 · Aman Narain, Zubin Vandrevala
[00:26:11] S0: And yet, the people who do arrive from AI, they buy. [00:26:15] S1: They do. And and it's funny because I referenced a lot of this data in my webinar earlier today. Adobe did this really good study, which says AI referred shoppers convert 54% better than other traffic. And what's crazy is less than a year ago, it was 23% worse. Let that sink in, that sort of shift that has happened. And granted, this is a small and tiny base, and I would even peel the onion one layer back. Even if it's not just a lift in conversion, because these shoppers show up with better intent, they're staying on the page longer and they're buying. [00:26:54] S0: Yeah. And and we talked a little bit about Stripe's John Collison. [00:26:58] S1: That's right. I even have my Cheeky Pint podcast mug, where his deep dives reports sees as agentic activity only as of September basically started going vertical. Vertical from a small base, and he gives no numbers. [00:27:14] S0: So AI is already a research engine and barely a buyer. Discovery moves first, checkout follows later. [00:27:23] S1: Yeah. It's a crowded field, Aman. Right? Meta says Muse passed 10,000,000 users in six weeks. I think it was five in the first week, so it really doubled in first four weeks. So it's, like, really doubling in a really, really quick period of time. But $200 an order, Meta's own numbers. OpenAI has dots. Google has open protocols for the card and payment mandate. In fact, they launched their universal protocol earlier this month. And then Anthropic has Claude Duet in preview.
00:27:23 · Zubin Vandrevala, Aman Narain
[00:27:23] S1: Yeah. It's a crowded field, Aman. Right? Meta says Muse passed 10,000,000 users in six weeks. I think it was five in the first week, so it really doubled in first four weeks. So it's, like, really doubling in a really, really quick period of time. But $200 an order, Meta's own numbers. OpenAI has dots. Google has open protocols for the card and payment mandate. In fact, they launched their universal protocol earlier this month. And then Anthropic has Claude Duet in preview. [00:27:51] S0: I know. It came out almost as we launched our bots program. And, course, we use Claude in our own production efforts increasingly. So [00:28:02] S1: That's right. So hold your dates loosely. Gartner expects more than 40% of agentic AI projects to be canceled by the end of twenty twenty seven. And of 50 retail executives McKinsey surveyed, 45 had considered an agentic tool, and fewer than five had a borderline strategy. [00:28:22] S0: Alright. My own date for mainstream delegated checkout for ordinary shoppers, rung four, was the end of twenty twenty eight. I'm moving there now, I think, to 2030. [00:28:33] S1: The trough concession. I'll take that. That's two. [00:28:38] S0: Don't get used to it. Okay. Rails, Zubin and the human problem, Governor Waller put in one line at CyBoss. Who is on the hook if an agent makes the wrong purchase? Professor Z, know your agent.
00:28:38 · Aman Narain, Zubin Vandrevala
[00:28:38] S0: Don't get used to it. Okay. Rails, Zubin and the human problem, Governor Waller put in one line at CyBoss. Who is on the hook if an agent makes the wrong purchase? Professor Z, know your agent. [00:28:54] S1: Right. Right. And here's the uncomfortable bit. For as long as as many of us have worked in payments, fraud teams were paid to stop software from buying things. Now the bot is the customer. So know your customer becomes essentially know your agent. [00:29:10] S0: And what happens when the agent gets a draw? [00:29:12] S1: Right. The September 22, six banks, including Bank of America, I think it was Cap One, ING, NatWest, said liability outcomes should reflect where the risk and errors were introduced. That's the whole fight in one line. Liability is the product. [00:29:28] S0: So Waller named three walls. Authentication, is this agent real, and is this acting for you? There's liability, who pays when it's wrong? And fraud systems rebuild for machine speed. Meanwhile, LexisNexis cited secondhand says every dollar of direct fraud costs US merchants $5.13 in total. So, Zubin, what's the fakes? I would argue the Apple Pay trick.
00:29:28 · Aman Narain, Zubin Vandrevala
[00:29:28] S0: So Waller named three walls. Authentication, is this agent real, and is this acting for you? There's liability, who pays when it's wrong? And fraud systems rebuild for machine speed. Meanwhile, LexisNexis cited secondhand says every dollar of direct fraud costs US merchants $5.13 in total. So, Zubin, what's the fakes? I would argue the Apple Pay trick. [00:29:56] S1: Never hand over the real card. Mastercard or Visa, the network token services, the one behind your network cards, your Visa, Mastercards in Apple Pay now issues agentic tokens tied to one agent and its own rules, a ceiling, a a merchant type, and expiration. And since the September 13, it also scores how likely a payment is to come from an agent. Visa's trust agent protocol with Cloudflare tells a verified agent from a scraper. Amex records proof of intent, Stripe issues one time cards, x402 lets machines pay machines in fractions of cents. And I know Mastercard is also piloting x402 with Cloudflare and Coinbase. [00:30:39] S0: Zubin, DaVinci would call that making the complicated simple. [00:30:44] S1: Hope so. [00:30:45] S0: Tolls. Tolls. Where does the rent go? Let's talk about tolls. Where does the rent go when nobody's looking at the ads? [00:30:55] S1: Yeah. As Zach answered at Connect in September, as reported, no ads in Muse. Meta expects to make their money from taking a small fee on the transaction. [00:31:07] S0: Essentially, from renting attention to, I guess, taxing intent, from the billboard to the towboat.
00:31:07 · Aman Narain, Zubin Vandrevala
[00:31:07] S0: Essentially, from renting attention to, I guess, taxing intent, from the billboard to the towboat. [00:31:13] S1: Yeah. So brands now sell to machines. The exact specs, no surprise fees, accurate stock, low returns. I think we we were researching this. Euromonitor says, Asian favor clear structured propositions. [00:31:27] S0: Okay. Sol Adeyemi, thirty six, our Portland composite, runs a trail running shoe brand on Shopify. Couldn't make that up. On the... Or could we? On the September 8, Shopify shared his catalog with Meta's agent by default. So he rewrote his product data for software, toe box with heel drop, the returns rule in plain words. [00:31:55] S1: And his proof, it's working? [00:31:58] S0: Not a conversion number. He's still the merchant of record. The agent brings the order, but the customer, the support, the relationship stays his. [00:32:09] S1: Compression quickly. Drones are a supplement, not a fleet. China rents, what, tens of thousands of driverless delivery vans, and Amazon passed a million robots in its up... In its operations last year. And and remember London, payment robots already make short food delivery runs, pay wherever minimum wage kills a $4 fee. So, you know, it's at scale twenty twenty eight to twenty thirty two at best. [00:32:37] S0: And stores, Zubin, this is big one, don't die. They polarize. ICSC and McKinsey say each store has to pick a job, convenience hub, discovery destination, or dark node. 97% of Gen Zs still shop in stores. What hollows out is the routine middle, The weekly shop to make us phone now does.