London Fintech Podcast
00:10:40 · Tony Clark, Rohit Mishra
[00:10:40] S1: It's such a fast moving space, clearly. And those of us who are in the AI solutioning space at some level or another are just sort of getting used to MCP, which is model context protocol, which is the handshake between different models and and other systems. UCP, that was a new one on me for this conversation. That's live, right, isn't that? That was a January thing, if I'm [00:11:03] S0: right. That was a January thing that was announced at NRF, which is a major retail event by... In January this year. And... But since then, UCP completely public protocol with... That Shopify, Google, and many other many other partners together work on. And we've been working fast on evolving UCP and how UCP can can provide a very rich agentic experience. And and and there's there's great work now happening in in expanding UCP beyond beyond just, you know, physical good commerce that Shopify focuses on. So work work on travel, work on services. There are many other sectors where UCP is expanding too, so we're very excited about the potential there.
00:11:03 · Rohit Mishra, Tony Clark
[00:11:03] S0: right. That was a January thing that was announced at NRF, which is a major retail event by... In January this year. And... But since then, UCP completely public protocol with... That Shopify, Google, and many other many other partners together work on. And we've been working fast on evolving UCP and how UCP can can provide a very rich agentic experience. And and and there's there's great work now happening in in expanding UCP beyond beyond just, you know, physical good commerce that Shopify focuses on. So work work on travel, work on services. There are many other sectors where UCP is expanding too, so we're very excited about the potential there. [00:11:47] S1: Brilliant. Well, so we sort of started with a a broad brush on what you're doing in the payment space, and I thought it was important to touch on the protocols because it's sort of such a sort of wild wild west of the of the new AI landscape that these initiatives on standards are really important for AI safety and for effective use of the technology. But I guess the headline really, you know, is agentic commerce. Well, I was gonna say it's coming, but I think it's here. So maybe you can guide us a bit on some of the numbers. AI and shopping. There are lots of surveys out there about how much people... I think everyone's pretty much trusting their agents if they have an agent to go and find things for them, not everyone's trusting them to actually make the transaction yet. But what what are you seeing in the data?
00:12:38 · Rohit Mishra
[00:12:38] S0: Customers are increasingly trusting agents for coming up with what products that they should be buying. Agents are really, really great at helping you consume a lot of different information from different sources to reason about the kind of products that you are buying. We are also seeing now a lot of consumers, a smaller number, but a lot of consumers now letting people... Letting agents constitute their cards. And then a smaller fraction of of of users are letting agents completely convert... Do transactions end to end. If you if you... Just orders from searches that are originating from AI agents, we saw them three x in in the second quarter of this year, which is, like, we we are not seeing any... The thing with AI right now and agent ecommerce is everything's exponential. Nothing's nothing's x percent. Everything is three x. So that... That's what we saw. We also saw that when sessions are originating from AI agents, the conversion is 80% better than than organic search, which is which is incredible. And that the reason why that's happening is because consumers are finding a lot more trust, a lot more information upfront with agents. And so when they actually show up to buy, the the the the the intent to buy is is significantly higher. Like, one specific example I would bring up is if you think of watches and and and the category where people love to do more research, The conversion from any AI originated session is 2.4 x higher than if it was coming from a traditional search. So that's that's where we are seeing incredible results both in overall volume, but also very strong trends on conversion that bode very well for the future of agent technology.
00:14:29 · Tony Clark, Rohit Mishra
[00:14:29] S1: And that's because... So you said that's because an AI search... So as I'm looking for a new Rolex and I'm doing my watch search, That would be a, you know, a very pleasant thing to do at some point. The AI is answering all the questions for me. Is that the point I get to the checkout and I've kind of done my research? So I'm less likely to abandon the the purchase? [00:14:51] S0: The AI is... Like, think of the world of personal shopping and your concierge helping you reason about these are different brands, these are different products, these... This this is why Extract is better at this capability versus that. And basically, what agented commerce can enable is that very deep concierge esque experience for the general consumer across a wide variety of of categories. And and so that that is why we're... If... As... Once the user feels that they have more information, they're they're more confident about the purchase decision that they're making, I think that reflects in some of the conversion impact that we are now seeing. [00:15:35] S1: Absolutely. And I love that framing of a concierge like experience, sort of a personal shopper experience. I think that's a great way to describe what's happening. So you mentioned that watches, and there's probably other examples where you get a better conversion rate. Is there still friction in the system at the checkout?
00:15:53 · Rohit Mishra
[00:15:53] S0: Is it... Tony, I I would say that removing friction is a is a... Actually, I don't why we talk a lot about finite games or infinite games. Removing friction is an infinite game. So there shall always be a little more friction that we can keep chipping away at. I think the largest place for... I I... I'd frame it in two ways. So if an agent is referring you to the merchant's storefront and then you are on the storefront, you... You're seeing more details about the brand, I think that flow is is working very well. There's always more more work we can do to bring more trust into those transactions. But if you're letting the agent... You're saying, hey. I want to get a gift for my niece, and please make sure that... Please get me something by this Saturday. And you're just letting the agent go traverse, find the right products based on your taste, and actually put... Purchase the transaction and and complete the transaction. That, I think, there's a lot more work to do to bring the right level of trust into that kind of transaction where the agent is fully delegate... Delegated and and and doing an end to end purchase. And I think what's the friction that that that remains there is both from a consumer perspective, but I would also say from a merchant perspective, can you trust the transaction? Is the buyer really sure about what the buyer is buying? If they don't like the product, how does... How do disputes and chargebacks work, and who holds liability? Is it on the consumer? Is it on the consumer's bank? Is it on the merchant? And I think those are things that... Where as as an industry together, we we have to do more work to bring more trust into the into the transaction on both angles, both from a consumer angle that they are... They will get the same protections that they are used to, but also from a merchant angle who won't really participate in this in this complete new modality of commerce, but want to make sure that if they are doing things right, they don't end up holding the bag on disputes and chargebacks. So I think I think there's a lot more work here on trust that we have to keep we have to keep doing. And then beyond trust, what have we... What we have always seen... And and you and The UK, we recently launched our Shop Pay installments product there.
00:18:17 · Rohit Mishra
Is right now a lot of the work we are doing on agent tech is on the traditional card transaction, but how do we make sure that all the new... All the diverse ways that buyers like to pay installments is one of the one of one of the key ways, and all the other local payment method schemes around the world, how do all of those work well with agent tech so that buyers continue to have the flexibility of payment choice that they that they expect? Their loyalty works as they expect. They have the same access to being able to use gift cards or store credit or discounts. And I think as the experience becomes more wider and more complete, that will drive more trust and and and that that will continue to help us accelerate it into commerce.