London Fintech Podcast
00:34:15 · Rohit Mishra
[00:34:15] S0: Yeah. So I I would say, like, I I will talk about what's coming next on agent tech, and I'll also throw in a couple of things beyond agent tech that are related. Agent tech, I think one of the big things, Tony, that we are doing is with Shop Pay, which is our consumer wallet product. How do we make sure the best of Shop Pay is available to the buyer no matter which agent that they are that they are working with? So we've been doing a lot of work in making sure it's really easy. It's a matter of days now that you can you can go and you go... Can go to our developer dashboard, point your agent to our developer dashboard and say, hey. I would like like to add Shop Pay to my agent. And it's it's really simple. In a matter of days, you can go live. And then... And now you... As a consumer, I can use Shop Pay to buy my favorite shoes, but I also can... You... Again, I can use it to buy tickets. Anything that I'm using my agent for, I can use Shop Pay for that. And and behind the scenes for this, we're working very closely with the... With with our friends at Visa and Mastercard and Amex, etcetera, on on the agentic token frameworks that they have been working on and to make sure that that carries the right level of security and protection for all interested parties in the ecosystem, the consumer, the merchant, networks, banks, and that has been a big part of our focus. So what we are going to announce later today, or I guess in a week... It would be a week ago when when when viewers see this, is the is the deepening of our of our work with networks and agentic tokens. So that when you tell Instinct, hey. Please help me buy tickets at a museum, how is that... How is the Instinct taking your card information? And and without the agent seeing your card, without the end merchant seeing your card, using all of the tokenization technologies, making sure that the transactions are still happening on your card, The merchant remains the merchant of record. You get all the protection. You get all the rewards that you expect, but your information remains fully secure. And so that's that's the work that we are really pushing forward on this week with agentic tokens. We are also doing other things here, Tony. We... One of the big thing... Areas of focus for us is how do buyers deal with more fraud and risk?
00:36:44 · Rohit Mishra
Because we've talked a lot about the positives here of of of AI and agent ecommerce. One of the other things we're also dealing with is bad actors also leveraging these technologies to... Bots have always been a challenge that we have dealt with, but there have been exponentially larger challenge this year as bad actors also get equipped with these technologies. So we are overhauling our risk product at Shopify. We call it Shopify Protect. And this is now an end to end product suite that helps our businesses on Shopify better deal with with bad actors. We do a lot of work automatically, but merchants now get more controls on on how they want to... Where do they want to add friction, where they want to add more verification, authentication, as well as we've done a lot of work this year on if a transaction ends up being a dispute, how do we help brands on Shopify and better fight those disputes? Leveraging all the data that we have on Shopify, especially with Shop Pay. We are seeing the same buyers so often that it makes us really easy for us to to deal with these disputes. And in in in in many cases, we just underwrite disputes ourselves so that brands don't even have to think about fraud disputes. And and and Pay with in The US now, we we take the fraud liability on ourselves. So a lot of work on Shopify Protect here that that will that will be really helpful.
00:38:12 · Tony Clark
[00:38:12] S1: So there's a couple of things you mentioned there. The exponential rise in activity from the bad guys. So, you know, agentically powered bad actors. Perhaps what sort of things have you been seeing in the threat of
00:38:24 · Rohit Mishra
[00:38:24] S0: those? If you you just see the traditional bots, like, nothing new. They've always been on the Internet trying to automate commerce and and they do things like card testing. We have we have seen an exponential rise in card testing attacks and bot attacks this year on on on our on our merchants, on our platform. And what we have done is also completely reimagined our defenses against these against these bad actors so that as the amount of attacks have significantly increased, but the amount of attacks... The amount of... The actual amount of bad actors that passed through our systems has significantly declined. And so that's the... We really, really... I would say, never say never because fraud and risk, another infinite game. But we have done a lot of good work this year to shore up our defenses and make sure that our merchants are protected. And because, you know, we talked about protocols, and that's why Universal Commerce Protocol, the agent... The new Poppy protocol, etcetera. These... Yes. So that's why so... They are so important. But it also happens to be the case that bad actors don't care about protocols, and they're just going to keep just browse... Using browser's automation and just keep keep trying to do card testing or or just other other forms of fraud. And I think that's where some of this work that we are doing with Shopify Protect has become so important. And and and and and that has been... We expected that, Tony. We expected going into this year that just like there'll be a lot of positive things, there will also be a new form of challenge that Shopify and our merchants will have to face. And that has turned out to be true, but we were well prepared to to handle it. And that's going to be a continued area of focus for us to make sure that we protect our merchants.
00:40:22 · Tony Clark, Rohit Mishra
[00:40:22] S1: Yeah. I'm sure. And listening to you, it seems that perhaps you're building the defenses for now faster than the threat vectors are evolving. [00:40:31] S0: It's it's it's a it's a constant race. It's a constant race. We remain we we remain humble and focused. That's all you can be in in in in fighting bad actors. And and the thing that I would also add is because at Shopify, we we we think about... We work with small businesses so much. When you're a large business, you look at it as something like fraud. And you can say, okay, x basis points of my business, I can reason about it. Okay. I have somebody doing nice math for me saying, yes, I'll... You lost x money, but, you know, you also made y money. It's okay. It's a small fraction. But when you're a small business, each of every single instance of fraud pinches you. Because now you you haven't... You aren't large enough where everything is just math and you can just say, okay, we have so much lost so much. You have to it really... We... What we see with our merchants is, and especially the the more aspirational new entrepreneurs who are building their business, is fraud and chargeback become a really, really important marker of whether they continue to invest in the business, whether they have hope and trust that that they will be able to go build a build a really strong business. So that's why we... In some of these areas, we invest very heavily.
00:41:52 · Tony Clark, Rohit Mishra
[00:41:52] S1: Yeah. I mean there's a... You're so right. There's a double impact there. If you're a big corporate, not only is the operational risk proportionate, you've probably already modeled it in and it's very small impact on the whole, but you also probably got your own fraud department working on it. Whereas if you're a small business, not only is the impact large, but you don't have any capacity or skill set to to build the defenses either. [00:42:17] S0: So You you are the fraud department. You are the fulfillment department. You are the support department. You are the marketing department. So how can we do... You know, our brands are on... Every entrepreneur is great at thinking about what their brand is, what their product is, how they want to express, then market their product. So we'll... We want to... Our entrepreneurs to be able to do more of that while things like fraud that... Where we can play a greater role, we continue to to shoulder more of that responsibility so our brands can focus on what they do best. [00:42:49] S1: Yeah. And you mentioned disputes as well. When an agent completes a purchase, who's who's actually responsible if it goes wrong then?