Would you let an AI agent make payments for you? (TWIF 11/29)

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Hello Fintech Friends,

Are we going to move into a world of agent-authenticated payments?

🤖 That seems to be the hot topic of the day, as agentic businesses continue to promise a world of integrations, where AI is deputized to make financial decisions on behalf of users. Want to earn rewards on a purchase? Let your agent decide on the best payment method. Need to cancel or change a subscription? Your agent can do that for you. Miss a bill payment? Your agent will catch it and make sure you're current.

But with new payment methods come new fraud vectors, and it's unclear where liability will sit for disputed transactions. If you didn't mean to pay for something, is that the agent's responsibility, the merchant's, your bank's, or yours? Can someone trick your agent into making fraudulent purchases, and if they do, who is on the hook?

There are also authorization questions to answer: How can agents sit in fraud auth flows like liveness verification, device 2FA, pin number entry, etc.? And if they're able to do so easily – how can payments providers quickly improve their auth flows to prevent AI payment spamming? (Incidentally, one of our newest investments from the fund, BKey, is looking to prevent just that.)

An added variable: The increasing acceptance of crypto and stablecoin payments may create new opportunities for AI. If payments become more programmable, it makes it easier for agents to translate your tastes and preferences into actions, undertaking complex tasks like splitting bills or negotiating loan terms for you. And we're just thinking about consumer payments at the moment; corporate payments are another ballgame.

Right now there are more questions than answers, but the agent-led payment future could open up many new possibilities for consumer fintech. What do you think?

🏆 PS: It's not too late to nominate a company for the TWIF Fintech Awards! Nominations are due by EOD on December 3rd, and will be recognized at this year's Fintech Formal.

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Please enjoy another week of fintech and banking news below.

(👍👎 Have feedback for us? Let us know! Find me at @nikmilanovic, @twifintech, and @ndm)

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Nasdaq is preparing to list options on spot Bitcoin ETFs amid a surge in cryptocurrency markets, further embracing crypto-focused financial instruments.

The CFTC recommended expanding the use of non-cash collateral in derivatives markets through distributed ledger technology, to modernize collateral frameworks.​ 

Gary Gensler, the SEC Chair who has been antagonistic to the crypto industry, announced plans to step down in January 2024.

Global neobank Revolut plans to launch mortgages, smart ATMs that use facial recognition and can print out replacement cards, and new business credit products in Europe.

StoreCash unveiled a new app that allows users to instantly earn cashback at partnered retailers, targeting savings-conscious consumers with streamlined rewards​.

Unit* released a "Create Card Component" feature, allowing businesses to easily build and issue branded payment cards, simplifying the process for fintech clients​.

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Charlie introduced CharlieSaver, a tool designed to aggregate senior discounts nationwide, coinciding with the holiday shopping season and aiming to support older consumers with savings​.

TrueBiz* launched its "Applicant Link" platform to streamline applicant management processes, addressing inefficiencies in hiring systems.

Qash debuted in Colombia, stepping out of stealth to offer digital banking services tailored for Latin American markets .

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PayPal completed its first PYUSD stablecoin payment for a business transaction, demonstrating its commitment to integrating stablecoins into broader payment systems as adoption rises​.

Tether decided to discontinue its euro-denominated stablecoin (EURt) by December 29, 2024. The decision aligns with the European Union’s Markets in Crypto-Assets regulatory framework, which requires detailed disclosures for stablecoins. Tether aims to focus on compliance with evolving global regulations​.

N26, a German neobanking unicorn, reported its first profitable quarter since its founding in 2013. The company generated a net operating income of €2.8 million and grew its customer base to 4.8 million.

Blueacorn’s founders are facing felony fraud charges, for allegedly exploiting the government PPP covid-era loan program to funnel millions of dollars to ineligible recipients and misused the funds for personal gain.