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CoverStory

scams even in cases where transactions were personally
"Think of AI as the holiday sidekick we didn't know we authorized. Gen Z and millennials were even more likely
needed," said Bobby Meixner, vice president of solution to expect reimbursement from their FIs: 73 percent of those
marketing at UserTesting. "It's giving shoppers fresh ideas, generations expected reimbursement compared with 62
uncovering smarter deals, and helping them put more percent of Gen X and baby boomers.
meaning into every gift. That's why younger generations
are leaning in; it makes tradition more fun and thoughtful." AI and payments: card brands enter the fray
But is it safe? Pablo Fourez, chief digital officer at Mastercard, addressed
the need to scale AI (specifically agentic AI, or agentic
Every new iteration of shopping and payments creates commerce) with trust in a recent blog post announcing the
new opportunities for fraud. Check fraud, for example, Mastercard agent pay acceptance framework.
continues to cause billions of dollars in losses for businesses
and banks. Fraud takes several forms in ecommerce, the Fourez pointed out that with agentic AI proliferating,
most notable is euphemistically called "friendly fraud," merchants are increasingly confronted with several criti-
because it usually involves legitimate uses of a card for cal dilemmas. These include: How can they distinguish
which the cardholder denies responsibility. between legitimate AI agents and malicious bots? How do
they know the consumer authorized the agent to make the
UserTesting's survey suggests consumers trust AI tools as purchase? How can they know the agent has carried out
much, or more than, friends and family for gifting advice. the consumer's instructions correctly?
But what about AI grifting? How big a concern is that?
"Without a standardized method to verify the identity
"As fraudsters' use of AI tools accelerates, the scope and of agents and consumer intent, merchants risk increased
scale of authorized payment scams edge close to a tipping fraud, reputational damage and ultimately a poor experi-
point that threatens to upend the trust relationship across ence for their genuine customers," he wrote. The Master-
the whole financial system," said Trace Fooshee, strategic card framework aims to "establish an essential consistent
adviser at Datos Insights. standard for agent verification and data exchange," which
the card brand is sharing with developers to support "on-
A 2024 poll of U.S. consumers by the cloud security going refinement," he added.
company Upwind found 87 percent of participants worry
that AI is helping scammers. Fifty-five percent said The framework focuses on registering and enabling AI
their worry about scams is growing. Eighty-six percent agents to transact with agentic tokens. "Each agent is
expressed increased worry about online scams during the uniquely identified and then enabled to initiate transac-
holiday shopping season. tions using agentic tokens," Fourez noted. "This provides
the core foundation for all participants to recognize when
Recently, a report by identity and fraud prevention an agent is involved."
platform Alloy found 85 percent of Americans in the study
worry that AI makes scams harder to detect. To be sure, Visa, too, is on the case. It unveiled a trusted agent proto-
AI can be used to create realistic product images, payment col that enables approved agents to securely pass critical
portals, email links, deepfake videos, and even mimic information to merchants. The framework for recognizing
familiar voices to lure victims into clicking malicious trusted agents was created with feedback from leading
links. payment services providers, including Elavon, Fiserv, Nu-
vei, Stripe and Worldpay.
Among the 2,000 Americans surveyed by Harris Poll
on behalf of Alloy, 62 percent reported being victims of Visa Chief Product and Strategy Officer Jack Forestell said
a scam or knowing someone who had been victimized. the card company has also been working with sellers and
Twenty-eight percent reported losing money as a result of card issuers on the project. "We believe the entire pay-
an AI-related scam, and of those victims, better 21 percent ments ecosystem has a responsibility to ensure sellers can
reported losing $5,000 or more. trust AI agents as much as they trust their best customers
and networks," he said in a press release.
"The data confirms what we're seeing on the ground:
AI hasn't made fraudsters more sophisticated; it's made Mastercard also has a litany of partnerships tied to its
them more efficient," said Sara Seguin, principal adviser agentic AI vision, Fourez stated. For example, it has part-
on fraud and identity risk at Alloy. "A single criminal can nered with the network services and cybersecurity firm
now launch thousands of personalized attacks in minutes. Cloudflare to support web bot authorization to verify AI
But here's what is fascinating: consumers get it. They're agent identities. "These partnerships are instrumental in
demanding banks use the same AI technologies to protect shaping a future where agentic commerce is not only pos-
them." sible, but trusted and ubiquitous," he added.
Sixty-seven percent of those surveyed said financial Coming to terms with the coding 'tax'
institutions should reimburse money lost to these In the end, it all comes down to the customer experience,

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