Stripe describes the Machine Payments Protocol as ‘an online method for payment agents’.
It has been decided by Big Tech executives that consumers will use AI to shop online, despite online consumer sentiment showing a certain level of fear.
McKinsey found that most European consumers are already using AI to help shape their purchasing decisions, but not at the checkout, where the money goes. Although it has been noted that that feeling can change, and quickly.
McKinsey also found that by 2030, agency trade could reach $5trn globally. But Morgan Stanley noted that only 1pc of consumers currently choose the agent route, leaving much to guesswork and hope that consumers will let AI buy for them.
Regardless, many, such as Revolut, Google and PayPal, are already trying to create agreements to support this new era of AI-led shopping.
Adding to that is Stripe’s new joint venture with Paradigm, Tempo, which launched the ‘Machine Payments Protocol (MPP). Described as a “native online way for agents to pay”, MPP is trying to create an alternative financial system built specifically for AI agents to use.
The protocol provides a system where AI agents are not faced with the challenges of navigating a human-built financial system, where bots may need to create shopping accounts, navigate pricing pages, choose between subscription categories, enter payment information, and set up billing.
“The tools of the current financial system are built for people, so agents struggle to use them”, noted Stripe’s head of marketing in a blog post. MPP allows agents and services to manage payments programmatically, allowing for smaller transactions and recurring payments.
Once Stripe users set up MPP, businesses can accept payments directly from agents in both stablecoins and fiat, along with features like buy now, pay later. Companies such as browser infrastructure provider, Browserbase, and New York City-based Prospect Butcher are already using MPP to enable agent trading.
Tempo was reportedly valued at $5bn in October, after raising $500m. The crypto venture launched from incubation last month.
Last November, Swedish fintech giant Klarna, whose CEO was once a crypto sceptic, became the first bank to launch a stablecoin on Tempo called ‘KlarnaUSD’. The coin, which will be launched this year, is expected to help reduce transaction costs.
At the time, sources told the Financial Times that the stablecoin will also help Klarna move large amounts of money around the world by cutting groups such as the Society for Worldwide Interbank Financial Telecommunications – or SWIFT – network.
Meanwhile, Stripe acquired US billing and invoicing software provider Metronome in December. Metronome allows organizations to create and manage user-based pricing models, which Stripe CEO Patrick Collison calls “a traditional business model for the AI era”.
Bloomberg News reported last month that Stripe was considered to acquire some of all the parts of its fintech rival PayPal. Founded in the late 1990s, PayPal has struggled in recent years to modernize against its emerging rivals. Founded in 2010, Stripe, meanwhile, was recently valued at $159bn after an employee tender offer.
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