The PaymentsJournal Podcast

As payments have evolved from cash and checks to cards and digital payments, something essential has been lost: the human touch. Yet consumers are not data points—they crave a payments experience that is fast, secure, and effortless, and when they do need support, they want it to shift seamlessly into something personalized and attentive to their needs. 

In a recent PaymentsJournal podcast, Robyn Burkinshaw, CEO and Founder at BlytzPay, and Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research, discussed the current gaps in the payments landscape, what an ideal model for more human transactions could look like, and how organizations can start to speak their customers’ language. 

From Clicks to Conversations 

Digital payments have reshaped the way people move money, bringing new speed and convenience to everyday transactions. Still, even with these advances, friction persists—from the hassle of repeated app downloads to layers of authentication that slow down the process. Too often, the very tools designed to simplify payments end up complicating them or leaving certain customers behind altogether. 

“When we’re thinking about the technology that we’re building, we’re thinking about a bank box, and you either fit in the box or you don’t fit in the box,” Burkinshaw said. “Between 70% to 75% of the population fit in that and it’s easy for them to transact, but 25% of the population doesn’t fit in that. The unbanked and underbanked community doesn’t fit in that box.” 

“If I’m in person at the grocery store, the checker doesn’t care if I’ve got $50 of my $100 bill in cash and $50 on a card,” she said. “But that has not expanded outside that bank box in the digital experience in a way that meets people where they are.” 

Making payments conversational means giving consumers greater flexibility in how they transact. When adopted at scale, this model fosters an open ecosystem where all consumers—regardless of background or socioeconomic status—can access a payment experience that is both convenient and inclusive. 

While some organizations have made their payment experiences more conversational than others, there is substantial room for improvement across the board—especially among traditionally rigid institutions such as government agencies and utility providers. 

“I made a tax payment using a bill pay service and that tax payment was wrong by a penny,” Miller said. “The result was that that entire payment was returned to me and $0 of it was credited against the tax bill—and that’s good for no one.” 

“You can imagine if you are a landlord or an auto dealer, if someone sends you almost all of the money that you want to get from them, you’d like to be able to take that and then have a conversation about whatever the remainder is,” he said. “A system that isn’t flexible enough to handle situations like that is one that’s missing opportunities to improve outcomes.” 

AI and Common Sense 

Payments challenges like these can take a real toll on customer relationships, especially as consumers increasingly expect transactions to be immediate, intuitive, and personalized.  

“Consumers want control of their money,” Burkinshaw said. “It doesn’t matter if I make $100 or $1 million a month, I want control over where my money goes and how it’s transacting. We’ve gone from personalized relationships at the bank to digital relationships where there’s no engagement and there’s no interaction. I believe—especially in bill pay—we need to bring it back somewhere in the center where there is digital communication for convenience.” 

It’s important for organizations to remember that every payment represents a person on the other end—someone who wants their needs to be acknowledged.  

Yet, as many companies have become more tech-centric, that human connection has started to fade. The rise of artificial intelligence has only intensified worries about dehumanization, with many fearing that automation will come at the expense of empathy. 

But when used thoughtfully, AI can actually strengthen—not replace—human connection. As part of a two-way, human-centric approach, it can help organizations customize their messages and move beyond the impersonal, one-size-fits-all push notification.  

“The best AI is AI that is invisible,” Burkinshaw said. “People are thinking about AI as the end. AI isn’t the end, it’s a means to an end. It’s got to be paired with common sense; it’s got to be paired with critical thinking; but it also has to be paired with automation.” 

“The cool thing about AI is it gives you the ability to wrap your arms around huge swaths of data, pull that data in, make it consumable, and then make it actionable,” she said. “If I’ve got data for the sake of data inside businesses, I have to understand what my KPIs are, what moves my business. Then I have to apply technology, AI included, in bite-sized pieces so that I can grab the things that are going to be effective to my business and make those changes.” 

Payments in Flux 

The more effectively an organization can analyze data and align insights with its objectives, the greater potential for success. In financial services, payments data—even from declined transactions—offers a wealth of valuable information. 

“What happens today, especially in the subprime markets, is you take those declines, we throw the declines in a bucket and then we throw it at our collections department to go figure out what’s going on,” Burkinshaw said. “AI, in my opinion, gives the ability to be able to take tedious amounts of data and make it consumable in a way that can be effective when it comes to businesses.” 

Understanding the trends behind these payments will be critical in a rapidly shifting environment. For example, recent changes to the credit card interchange fee model, prompted by merchants’ lawsuit against Visa and MasterCard, could change the paradigm for many shoppers.  

Such changes may have an outsized impact on unbanked and underbanked communities, who often rely on payment methods that merchants may not always accept. These groups have already been affected by the decline of cash as a payment option, further widening the divide between the banked and unbanked.  

Taken together, these factors suggest that more alternative payment methods are likely to emerge to better serve these communities. 

Multilingual and Culturally Aware 

The landscape also presents a significant opportunity for financial institutions, though these organizations may need to adapt their strategies.  

Consumers are multilingual and come from diverse cultures and belief systems. There are substantial benefits for organizations that recognize these differences and adopt a conversational approach to payments. 

This model can lead to higher collection rates, reduced call volumes, and stronger customer relationships. When technologies like AI are integrated effectively, it can also deliver operational efficiencies. 

“The upsides are very clear,” Miller said. “If you think about the ability of a system to be able to speak in multiple languages and support folks, that’s a substantial advance over the requirement that you, for example, hire 10 people with 10 language skills to be able to provide that same level of service. It’s an important conversation, but any of these conversations have to involve not just the technology buyer and the technology seller, but the end user in an ongoing dialogue.” 

To engage in meaningful dialogues that keep customers connected, organizations will increasingly need to speak the customer’s language—literally and figuratively. 

“One of the things to emphasize is the need for bilingual communications,” Burkinshaw said. “If English isn’t my first language—or if English is my first language and I’m in a place where English isn’t the predominant language—we want our consumers to feel respected, connected, and valued.” 

“We want to reach them in a language that’s convenient for them, especially when we’re when we’re talking about bill pay and we’re talking about the four to six bills that consumers are going to pay on a recurring basis,” she said. “Meet them where they are, address their needs, and do it in a way that’s not only convenient, but makes them feel like they’re a person.” 

The post Conversational Payments: The Next Big Shift in Financial Services   appeared first on PaymentsJournal.

Running a small business is hard enough—juggling operations, customers, and cash flow. Now imagine software that not only streamlines day-to-day work but also provides the financial tools needed to grow. That’s the promise of embedded finance.

In a recent PaymentsJournal podcast, Ian Hillis, SVP of Growth at Worldpay, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, examined the emerging embedded finance landscape, the value it offers merchants and software providers, and what the future holds for small- to medium-sized businesses (SMBs) embracing this new paradigm.

Speaking the Language

Two forces are fueling this shift: the thriving U.S. small business sector and the expanding universe of software-as-a-service (SaaS) platforms that serve them.

“It’s been interesting to watch the evolution of the technology as the cost of delivering SaaS solutions continues to drop,” Apgar said. “The size of the business that’s too small to utilize software is now zero. Quite frankly, it’s a win-win for the SaaS company that you can use payments as a revenue driver, but also for the user because it’s easy to consume the service in the application rather than to source that service separately.”

As these platforms become more deeply integrated into SMB operations, business owners are increasingly demanding solutions tailored to their specific needs. Vertical-specific software has existed for years, but it has traditionally focused on the largest markets—restaurants, retail, and hospitality.

Now, with cloud technology lowering the barrier to building software for niche verticals, more SaaS platforms can meet the unique demands of their SMB customers. The result? Rapid adoption and a wave of innovation changing how small businesses operate.

“In 2018, we did a study and came back with about 34% adoption in the U.S. for SMBs leveraging vertical-specific software to run their business,” Hillis said. “Fast forward to 2022, and that jumped up to 48%. If you fast forward to 2024, it’s nearly 64%, which is incremental and explosive growth in a short time.”

“You’ve got SMBs that are using vertical-specific software to run their business, and that software platform is sitting on a lot of data—employee data and customer data,” he said. “They speak the language of that vertical and it’s a trusted resource. A natural evolution of that is for the SMB to look to that trusted relationship in a high-traffic area for expansion of additional products and services, many of which are financial in nature.”

Reducing Time and Complexity

For SMBs, time is often the most valuable currency. Embedding finance helps reclaim it. With the right tools in place, transactions become faster, insights sharper, and growth more attainable.

“Each product is provided by a best-in-class partner who wakes up every day thinking about that experience with deep expertise,” Hillis said. “Service, support, and risk are all taken on behalf of the software platform, so they don’t have to take away resources from their current focus. That helps reduce time to market and operational complexity, while unlocking new revenue streams.”

For time-strapped SMB owners juggling countless responsibilities, that immediacy is invaluable. Embedded finance solutions not only provide access to more effective products, but also offer deeper insights into business performance.

With all key data visible in a single, unified solution, business owners can make faster, more informed decisions—and focus their energy where it matters most: running and growing their business.

“We’ve seen some research recently where small businesses will spend 20 to 25 hours per week just reconciling data between applications—between their merchant statement, their bank statement, their financial needs, supplier invoices—all these things are basically taking a number from one application and inserting it to another application so the business owner can run their business,” Apgar said.

“There’s a tremendous need to have a shared data set that can drive all the financial needs of a small business,” he said. “Then, if you look upstream from a supply chain perspective, especially when you get into credit products, having access to all that data on the SaaS platform gives the lender real-time visibility into the borrower’s business.”

Growth Compounds Growth

When a SaaS platform can use its data to recommend products that are relevant to a business, it evolves from being just a payments provider to becoming a true business partner. Taking that a step further, giving merchants access to capital directly within the software keeps them more deeply engaged in the ecosystem.

“If I have an embedded bank account and I have a loan with my platform—and then I move into a commercial charge card or I expand into payroll—that becomes the spot where I no longer have to start swivel-chairing between all of these different offerings and I log into my vertical-specific software platform,” Hillis said. “That’s not just retention, that’s 360-value coverage on their financial health offering.”

For example, a point-of-sale system provider for bars could offer a loan to an existing customer who wants to expand into a food truck venture. Loans like this have been shown to drive roughly a 15% increase in transaction volume.

What’s more, data from venture capital firm a16z shows that companies embedding financial services into their platforms can see a 2x to 5x increase in average revenue per user.

“That’s everything from payments to accounts to capital offerings—hence the wide range of 2x to 5x—but that means significant dollars for a software platform when you think about the average revenue per user basis,” Hillis said.

“Many of these products create growth that compounds growth,” he said. “If you take a capital offering out and can invest in that as an SMB, theoretically your revenues then go up. If you’re already monetizing payments to the software platform, you see the benefit of that as well. You are delivering both increased value from the experience lens, and then you get to enjoy that from the commercial side as well.”

More Runway to Go

Although embedded finance is an important tool for revenue generation, it also gives software providers a powerful way to deepen customer relationships. This represents the next frontier of fintech—where companies move beyond payments services to play a larger role in their customers’ overall financial lives.

This model will take shape through new products such as flexible loans, merchant cash advances, embedded account search, and commercial charge cards. Complementing these products will be platforms that unify and simplify access to embedded finance solutions.

“In September, we went live with our embedded finance engine, and it makes it ridiculously simple for software platforms to offer embedded financial products to their customers,” Hillis said.

“It’s leveraging that high-trust, high-traffic environment, and it can be done in a single sprint without having to push anything else from the road map,” he said.

Platforms like Worldpay give SaaS providers access to services such as accounting, financial health insights, payroll tools, and even business insurance, which can be either general or industry specific.

As innovations continue to emerge, these platforms allow software firms to integrate them seamlessly. For example, data-driven orchestration represents the future, with platforms leveraging artificial intelligence to deliver agentic, adaptive embedded finance solutions.

All of these possibilities stem from the cloud-based software systems that many SMBs have already embraced.

“We’re early innings on embedded finance,” Hillis said. “We’re just starting to see the threshold crossed on some core products. It’s been exciting to watch those get adopted, and we’ve got lots more runway to go.”

The post Inside the Embedded Finance Shift Transforming SMB Software appeared first on PaymentsJournal.

Creating a synthetic identity used to be the realm of seasoned hackers, but now it can be done with a few simple prompts. Just as artificial intelligence has fueled countless business innovations, it has also been a boon for bad actors—allowing cybercriminals to commit fraud at a fraction of the cost and with greater sophistication.

In a recent PaymentsJournal podcast, Danica Kleint, Product Marketing Manager for Fraud Solutions at Plaid, and Jennifer Pitt, Senior Fraud Management Analyst at Javelin Strategy & Research, examined how AI is rendering fraud-fighting methods obsolete, and the tools and techniques organizations can use to defend against future threats.

The Flywheel Effect

Bad actors use AI as a proving ground. Within AI models, cybercriminals can create and test fabricated credentials. Unlike legitimate businesses, threat actors aren’t encumbered by regulatory or ethical boundaries, allowing them to evolve their methods faster than fraud prevention professionals can respond.

These bad actors also exploit vast repositories of stolen personal data from the growing number of data breaches, as well as the wealth of information that consumers and businesses share online. With more data and advanced tools, cybercriminals can now construct synthetic identities that are extremely difficult to detect.

Compounding the problem, many financial institutions still rely on outdated verification methods.

“When I was working in banking, I had to review customer service calls, and there were several calls where fraudsters called in pretending to be the victim,” Pitt said. “They would give static identity information—that’s all that these call centers were asking for: name, date of birth, account number—and they didn’t verify anything else. This is information that they’re easily able to get on the internet through social media or that has been leaked from data breaches.”

To make matters worse, today’s fraud attacks are often highly coordinated, executed by far-reaching and organized fraud rings.

“Not only do they have better tools to commit fraud, but we’re also seeing them collaborate more and share tips and insights,” Kleint said. “It’s this flywheel of a rapid increase in fraud across the whole ecosystem. I remember not that many years ago, fraudsters were just two people in a dorm room trying to hack a few things here and there.”

“Now, they’re these large-scale operations where there’s even TikToks readily available to learn how to commit fraud,” she said.

Layering Fraud Defenses

In the battle against increasingly sophisticated fraud schemes, financial institutions can no longer rely on a single line of defense. The most effective strategy is to build layered defenses—a coordinated system of tools, data, and analytics that work together to detect and prevent fraud from multiple angles.

While some organizations worry that such an approach could increase customer friction, advancements in technology have significantly reduced these concerns.

One effective starting point is to leverage the significant customer data FIs already possess. With the right analytics, institutions can use these data points to run synthetic or stolen identity checks, helping uncover fabricated identities or records linked to deceased individuals.

Beyond identity verification, FIs now have an increasing number of tools at their disposal.

“An interesting one that we’ve been seeing catch a ton of fraud lately is facial duplicate detection,” Kleint said. “It’s a super simple concept: have we seen this face across our platform or service multiple times?”

“But not that many companies are doing it,” she said. “You take a picture from the ID or from the selfie image and you just see if you’ve seen that face across your organization multiple times.”

In addition to facial duplication detection, financial institutions should deploy systems that flag duplication across other identity elements. For example, if a bank identifies the same name or date of birth used to open a dozen accounts, this could signal coordinated fraudulent activity.

Device intelligence and behavioral analytics add another critical layer of protection. These systems can identify atypical patterns in how customers interact with platforms, alerting the institution to potential risks in real time.

Ultimately, organizations benefit from taking a broader, comparative view of customer behavior. By evaluating an individual’s activity alongside peers in similar demographic groups, FIs can distinguish between legitimate anomalies and genuinely suspicious behavior.

“What a lot of financial institutions that have some behavioral analytics in place are lacking is they’re just looking at a single customer,” Pitt said. “That addresses account takeover for that customer, but it doesn’t address things like new account fraud.”

“It’s looking at the device intelligence in the beginning to see if that device has been used before,” she said. “Is this typical behavior of a customer that’s in that demographic that gives this typical KYC information? Looking at the historical data of that customer—as well as the historical data compared to that demographic—is critical.”

Shifting the Strategy

Technology alone isn’t enough. More organizations are realizing that true resilience requires a shift in strategy—not just in tools.

“Companies are focused on fraud at the very beginning, at onboarding, but it happens throughout the entire lifecycle of a customer,” Kleint said. “Often, they forget about how they could potentially have account takeovers later in the journey and we’re seeing that be so prevalent right now.”

While continuous fraud prevention is important, one of the most critical strategic shifts for financial institutions is opening the lines of communication with their peers.

By sharing data within an industry consortium, organizations can begin to leverage collective network insights—not only to understand how an individual or device has behaved on their own platform, but also how that behavior extends across other institutions.

Because bad actors often operated in organized groups, it’s important that financial services firms work together so fraud attacks can be traced back to the organizations that initiated them.

Still, many FIs remain reluctant to participate in a consortium model due to compliance and privacy concerns. While these concerns are well-founded, as long as customers have full visibility into how their data is being used and organizations encrypt personal information, consortium members can share intelligence freely while still meeting their regulatory and privacy obligations.

“Financial institutions in particular are hesitant sometimes because of privacy concerns,” Pitt said. “They’re afraid not only will they violate privacy laws, but they’re also afraid that they’ll alienate their customers by sharing information. But collaboration is going to be key—if we can’t collaborate, we are going to continue to lose this fight.”

Across the Entire Ecosystem

Unfortunately, the fight against fraud is only getting tougher. Generative and agentic AI tools are advancing at a meteoric pace, giving bad actors new ways to deceive and exploit. To keep up, companies must adopt technologies that close the gap—and work together to establish stronger, industry-wide standards for identifying and preventing fraud.

Perhaps more importantly, organizations need to make the most of the systems already in place.

“Plaid’s network powers digital finance—one in two Americans have used Plaid in some way,” Kleint said. “We’ve seen a billion device connections across the ecosystem and because of that scale, we can see how those devices and individuals have conducted themselves across the entire financial ecosystem.”

After all, fraud is ultimately about financial gain—and the surest way to uncover and trace it is by following the money.

“We sit at the center, so we have this view that nobody else has,” Kleint said. “We can see patterns like a person connecting to six different fintech apps within a week. They’re using different personally identifiable information, but they’re using the same device or the same email. It’s these patterns that fraudsters are not aware of. They’re not aware that we can see all this, and it’s super powerful in understanding potential risks.”

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The post The Rise of Smarter Cybercriminals Demands Stronger Fraud Defenses appeared first on PaymentsJournal.

From transforming member experiences to building a culture of information literacy, data has become a catalyst for innovation at credit unions. New use cases are constantly emerging for organizations willing to explore them, and artificial intelligence will only increase their value.

In a PaymentsJournal Podcast, Jeremiah Lotz, Senior Vice President of Experience Design and Enterprise Data at Velera, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, explored how credit unions are collecting and leveraging data to improve efficiency and better serve their members. 

Data As an Asset

Forward-thinking credit unions view their data not just as a resource, but as a strategic asset—a goldmine of insights into both members and the business itself. While many credit unions have already invested heavily in data, unlocking its full potential requires clarity on what the organization hopes to achieve. The first step is understanding how the institution intends to put that data to work.

“Look at what the data is saying, and how will it help us make decisions, as opposed to just for historical information,” said Lotz. “Once the organization recognizes that there’s an opportunity to use the data to make decisions or drive intelligence, that’s a sign of a mature level of adoption.”

A key driver is executive alignment at the C-suite level, ensuring that the credit union can use its data to grow, engage and retain membership, and ultimately inform decisions. The next step is empowering data teams to suggest use cases, regardless of the division they work in. When non-technical staff can articulate business needs that data can address, it reflects a culture that is ready to move forward.

“It’s a way to be able to say, ‘I have a problem’ or ‘I have an opportunity that maybe data could help me with,’ versus expecting people to say, ‘Hey, I think you’ve got data. Let me see these three fields and see if it does anything for me,’” Lotz said.

Anticipating Member Needs

Credit unions are learning that consumer data isn’t just numbers—it’s a roadmap to a better member experience. By analyzing individual patterns, institutions can spot potential financial challenges or opportunities before they happen. Using predictive insights in this way transforms interactions, moving beyond reactive service to experiences that delight members.

“It doesn’t always have to be super aggressive,” said Lotz. “It can be more about putting something in front of them that might help in a situation, if they so choose.”

At the same time, members expect their data to be used responsibly—but they often worry about privacy. Credit unions can address these concerns by clearly communicating how data usage benefits members, showing that it’s designed to make their financial lives easier and more personalized.  

“Whether it’s coupons I receive or recommendations when I’m shopping online, we know this data collection exists,” said Lotz. “It would be nice to understand that my financial institution is going to use it in a way that’s going to help me, that’s going to protect me or maybe give me opportunities by predicting my behavior.”

Predicting when a member might need a product is just the beginning. Data can also streamline everyday interactions. Instead of asking members to fill out forms, a credit union can provide pre-populated applications or automatically update existing accounts. These anticipatory actions reduce friction and create a tangible, member-first experience that sets the institution apart.

“I have a mortgage with a credit union and it is quite possible for that credit union to predict that each year I need to provide proof that I have homeowners insurance,” said Miller. “This is not a magical data-derived prediction. It’s literally in the system.”

“But to the extent that the credit union would be able to anticipate that this is a need—some document has to be provided and returned. The institution has to take that action proactively, rather than dumping it on me to follow up with. You have the opportunity to turn what might be transactional interactions into wow moments.”

Enlisting the Whole Organization

Data literacy isn’t just about understanding the data—it’s about understanding what lies behind it and how the organization can leverage it. That starts with conversations between data and business teams, which require a shared language across the organization.

“By having that conversation at every level, you’re giving the opportunity for the people who understand the data to start talking with the individuals in the business units and the operations teams,” said Lotz. “Once they start talking about some common problems that they’re facing, they can start to look at data as an asset.”

Identifying ambassadors for the data practice is helpful—individuals who understand how data connects not only to their regular work but also to new opportunities. Considering how to disseminate and distribute data is an important part of bringing non-technical employees into the process. When leadership can put actionable, accessible information into everyone’s hands, it fosters a fully data-literate organization from top to bottom, rather than concentrating knowledge in the hands of a few specialists.

Urgency, Not Emergency

Artificial intelligence has the remarkable ability to uncover patterns and insights within vast amounts of data, but it’s important not to put the cart before the horse. AI should inform and enhance decision-making, not dictate how data is used.

“We have to focus on understanding governance before glamour sometimes,” said Lotz. “We’ve got to make sure we’re focused on responsible enablement of AI. We’re focused on data quality, model transparency and ethical use. Those are non-negotiable things when it comes to AI.”

When applied thoughtfully, AI can power a range of purpose-driven use cases that support members’ well-being. From fraud prevention and personalized experiences to credit risk insights and financial wellness tools, AI works best when it’s focused on initiatives that make sense and deliver real value to members.

“One of the things that a mature governance structure can do is communicate the fact that organizations have to deal with technology like this with urgency,” said Miller. “But it is not an emergency. If we don’t deploy the new tool next week, that is not the end of the world. It is better to do it correctly and in a sustainable, stable method that results in continuous new improvements than it is to get something out there immediately today.

“There’s an opportunity to harness the energy that can come from throughout an organization, with appropriate attitudes toward doing things that are sustainable and lead to long-run change,” he said. “When you have a group of individuals who understand the technology can then start a conversation within the organization, that’s a great opportunity.”

The post The Information Age: How Credit Unions Can Maximize the Impact of Their Data appeared first on PaymentsJournal.

The next iteration in the rapid evolution of artificial intelligence has arrived, and organizations are racing to harness the potential of AI agents to create a dynamic new shopping experience. However, as powerful as agentic commerce can be, the road to adoption won’t be without hiccups—many of which will lead to a surge in disputes.

In a recent PaymentsJournal podcast, Joseph McLean, CEO and Co-Founder of Quavo, and Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, discussed the challenges that can arise in the agentic commerce dispute process, the steps financial institutions can take to prepare, and how disputes can serve as an opportunity to engage and retain customers in the age of agentic commerce.

Navigating Uncharted Waters

Traditionally, as the volume of payments has grown, the number of disputed transactions has remained relatively stable. However, as agentic commerce gains traction, this pattern is unlikely to hold.

This shift raises many questions for organizations attempting to navigate these uncharted waters.

“There is going to be fraud on these transactions; there are going to be mistakes that are made by consumers or by AI,” McLean said. “The regulations aren’t super clear on who is liable in these scenarios when consumers are making purchases. Is it the consumer? Is it the merchant? Is it the issuer? This also opens up new attack vectors for fraudsters, where they can get into the agentic commerce area themselves posing as other people and making purchases.”

In particular, there may be a rise in first-party, or consumer-engaged, fraud. For example, an AI agent might follow its instructions perfectly, yet if the customer is dissatisfied with the outcome, they may still dispute the transaction. Alternatively, a consumer could intentionally make a purchase with the plan to dispute it later—claiming fraud or an AI error.

These situations create grey areas, as liability becomes unclear when a consumer authorizes an agent but doesn’t directly complete the purchase themselves. It’s therefore critical that these issues are resolved before agentic commerce scales further, since confusion and ambiguity could be detrimental to adoption.

“Merchants, payment processors, and card issuers are all going to think about this in terms of liability and consumers are going to think about it in terms of experience,” Miller said. “If they have an experience that doesn’t meet their expectations, that has implications for the growth of this ecosystem.”

“If a consumer doesn’t believe that they’re going to get what they want by delegating authority to choose or to purchase some piece of software that we’re calling an agent right now, they might not use the agent,” he said. “That’s a fundamental limiter on growth here.”

Trusting the Process

To develop a stronger framework around the dispute process, several factors should be considered by financial institutions.

First, FIs will need a mechanism to gauge the consumer’s intent when they instructed and authorized the AI agent.

Given that AI systems can hallucinate or misinterpret instructions, it will be important to verify whether the agent accurately carried out the customer’s request. Understanding consumer intent is also critical because bad actors may attempt to manipulate AI agents—for example, by creating fraudulent websites or impersonating legitimate services to trick AI into making unauthorized transactions.

These challenges also raise broader questions about how to proactively address fraud in an agentic commerce environment.

“When it was a fake website that consumers visited, we could take that head on and teach people what are the ways to recognize a fraudulent website,” Miller said. “If it is your agent that is deceived—if one platform impersonates another within an agentic integration flow—those are entirely outside the sphere of consumer, they can’t do anything about it. It’s interesting to think about not just who is liable, but who will be perceived as having responsibility for solving that problem.”

Issuers, merchants, and agentic AI developers may all need to take on new roles in educating both consumers and AI systems. Considering the potential scope of agentic commerce, an industry consortium approach might also be required to set up comprehensive safeguards.

Regardless of the specific path forward, developing a framework for agentic commerce will likely be necessary sooner rather than later.

“A lot of consumers are using this, and we’re going to see it happen a lot more in 2026 and going forward, but consumers will need to trust what’s happening through the agent,” McLean said. “They will need to trust their merchants, and they will need to trust that their banks can handle it appropriately when something does go wrong.”

Fighting Fire with Fire

To develop this trust, financial institutions can take proactive steps to prepare for the increased volume and complexity of agentic commerce disputes. Historically, many FIs have responded to spikes in fraud or dispute cases by simply adding more personnel to the process. However, this approach is unlikely to be effective in the new paradigm.

“The best way to solve this is going to be pulling in more technology, better solutions that solve the problem end-to-end so that the users at the issuing institutions can spend more time focusing on the complex pieces of the work,” McLean said. “These disputes, they will look very similar, but it’s not going to be just more of the same. It’s going to be much higher volumes that are coming through the door and the complexity of these disputes are certainly going to be different than how they’re used to working through disputes today.”

As financial institutions take stock of the dispute process lifecycle, several important questions will arise. For instance, how will the bank handle communications with the cardholder? How will it manage accounting or reconciliation? And how will institutions handle issuing a new card if one is compromised?

These complex challenges can’t be effectively solved by adding more staff or connecting disparate systems. Doing so often creates siloes, which can lead to delays, errors, and poor experiences for both consumers and merchants.

To address these issues, a comprehensive technology solution that manages the end-to-end dispute lifecycle will be paramount.

“One of the things that we need to look at is fighting fire with fire,” McLean said. “How can we bring in AI and those sorts of technologies into the issuing space to help solve these problems, make faster decisions, augment investigations with better data and better materials to help those solutions work through faster.”

“Making sure resolution times aren’t increasing for consumers, making sure that consumers are made whole, and following all the regulations. There are so many moving parts here that the technology is going to have to solve, especially when we start talking about the first party fraud piece,” he said. “It’s another layer of complexity that we’re going to have to deal with, and an effective dispute technology solution is going to be needed by every issuer to handle this problem.”

A Moment that Matters

As financial institutions search for technology solutions, they should consider platforms that handle the full dispute lifecycle—starting from intake. Platforms like Quavo’s offer a unified data solution to receive and track information, allowing institutions to create audit trails and leverage this data within their fraud systems to fight fraud more proactively.

As disputes surge with the rise of agentic commerce, issuers will no longer need to rely on a patchwork of vendors, technologies, and in-house solutions—unlocking significant efficiency gains and potential revenue improvements.

However, one of the most powerful benefits of a streamlined dispute process is its ability to strengthen customer relationships.

“When a consumer has an issue with their accounts—and largely it’s going to be transaction-related—it can go one of two ways,” McLean said. “It can go very poorly and be a bad experience, where your customer may look to leave your institution—and all the research that we’ve conducted says that absolutely can happen.”

“On the flip side, you can take this into what we’ve always called a moment that matters,” he said. “It’s one of those pieces of banking where you can build real trust and build a much deeper relationship with your account holder.”

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