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Federal Reserve Speeches·

Waller, Payments in the Age of AI Agents

  • The speaker discusses the role of AI in global payments, highlighting its history in fraud detection, reconciliation, & the development of autonomous AI agents.
  • AI can improve cross-border payment efficiency & security by using LLMs to enhance sanctions screening, reduce false positives, & optimize payment routing & currency conversion.
  • AI presents cybersecurity challenges due to sophisticated attacks but also offers defensive capabilities for threat detection & secure software development.
  • Agentic commerce involves AI agents making e-commerce purchases via two models: agent-assisted (buyer controls decisions) & agent-delegated (agents operate autonomously).
  • Consumer-to-business transactions are the first wave of agentic commerce, while business-to-business purchases offer significant potential for automation despite higher financial exposure risks.
  • Agentic commerce requires micropayments for machine-to-machine operations, favoring payment rails with lower flat fees.
  • Key barriers to scaling agentic commerce include authentication, liability assignment, & fraud detection, which require recalibrated systems to handle agent-specific patterns.
  • Market participants are developing technical standards for agent registration, logging approvals, & interoperable protocols to address trust & security issues.
  • The industry faces a choice between open systems that allow multiple agents or closed systems that restrict usage to proprietary agents, impacting market structure & buyer choice.
  • Future considerations include defining missing standards for identity & consent, balancing convenience with friction, & adapting payment rails to handle increased transaction frequency.