Mastercard exec says AI agents could solve online shopping’s $750M fraud problem
The rise of AI in online shopping is not only about improving the consumer experience, but also about tackling the pervasive issue of fraud.
According to Mastercard’s Chief Product Officer, Jorn Lambert, the integration of AI agents in e-commerce could be a game-changer, both in streamlining the purchase process and reducing fraud, which hit $750 million in 2024 alone.
At the Fortune Brainstorm Tech conference last week, Lambert discussed a significant shift in consumer behavior: as AI agents become more capable, shoppers are moving away from traditional web browsers and turning to AI-powered assistants to search, discover, and make purchases.
“The paradigm shift in commerce is happening,” Lambert said. Consumers are increasingly skipping the process of searching for products on a traditional search engine like Google.
Instead, they’re asking AI tools like ChatGPT, “best running shoes,” and receiving tailored, expansive results. AI tools are able to ask the consumer for additional details, refining the product search and even flagging discounts.
“Once you’ve searched and discovered a product you want to buy, it’s only natural that you then ask the AI agent to buy it on your behalf,” Lambert explained.
This change in how consumers interact with e-commerce has prompted Mastercard to roll out Agent Pay, a new AI-driven payment platform.
Agent Pay is designed to seamlessly integrate payments into the AI-assisted shopping experience.
According to Lambert, the new system offers a framework that enables consumers, banks, merchants, and the entire e-commerce ecosystem to collaborate in creating a more trusted, efficient, and secure shopping experience.
“We’ve announced last week is essentially the framework in which consumers, banks, agents, merchants, and the whole ecosystem could work together for a high trust system and a high consumer convenience system,” Lambert said.
One of the most compelling reasons for the rise of AI in commerce is its potential to address online fraud.
Fraudulent activity tied to online shopping reached $750 million in 2024, according to the Federal Trade Commission. With the increase in digital transactions, merchants and payment platforms are under more pressure to protect consumers from malicious actors.
Mastercard’s Agent Pay aims to address this issue by using AI to track the entire transaction process with cryptography and tokenization.
Lambert explained that even if fraudulent actors gain access to credentials, the system can trace the transaction back to its origin, reducing the chances of fraud.
“By doing that tokenization, even if a bad guy gets their hands on that credential, we can bind it back to its origin,” Lambert said.
The system’s use of AI is a critical factor in its ability to detect and prevent fraud. Unlike traditional methods, which have relied on general fraud prevention tools, AI-powered systems can quickly analyze multiple factors in real-time, flagging suspicious activity in seconds.
Carlo Bruno, Vice President of Product at payment platform Adyen, emphasized the delicate balance merchants must strike when integrating AI into fraud detection.
“This is on the minds of merchants, how to find this delicate balance between knowing what’s going on versus truly embracing all this cool technology to solve this problem,” Bruno said.
As AI-driven tools like Agent Pay gain traction, the question remains whether consumers will trust AI with their financial transactions.
Lambert believes the future lies in offering consumers a frictionless and secure shopping experience.
The rollout of OpenAI’s new shopping functionality within ChatGPT, which allows users to browse and shop directly within the chatbot, underscores the changing landscape of online shopping.
OpenAI is aiming to challenge Google’s dominance by offering a more personalized, user-centric search experience.
In the broader tech community, thought leaders like Microsoft co-founder Bill Gates are envisioning a future where AI agents disrupt not just how people shop, but the entire search ecosystem.
As Lambert notes, this represents an impending “paradigm shift” in commerce that could ultimately change how consumers interact with brands and make purchases.