By Dwaipayan Roy
Copyright newsbytesapp
Google has launched a new open protocol, the Agent Payments Protocol (AP2), to make AI agent-led financial transactions more secure. The move is backed by over 60 merchants and financial institutions. The AP2 system is designed to work across different AI platforms, payment systems, and vendors. It also provides a traceable paper trail for every transaction made through it. Google executives have stressed their dedication to transparency with the launch of AP2. Stavan Parikh and Rao Surapaneni, VPs at Google and Google Cloud, respectively, said in a statement that they are committed to evolving this protocol in an open, collaborative process. They also invited the entire payments and technology community to join them in building this future together. The full specification for AP2 was made available on GitHub along with the announcement. The AP2 protocol is designed for a future where AI agents regularly shop on behalf of customers. It also enables complex real-time interactions with retailers’ AI agents. For instance, if a user asks their agent to shop for a bike trip, it could trigger an instant time-sensitive bundle offer from the bike shop’s agent. This kind of transaction is technologically and socially complicated but possible with AP2’s two-step approval process before purchases can be made. The AP2 protocol requires agents to register two separate approvals before a purchase can be made. The first is the intent mandate, which lets the AI know what item you’re looking for. The second is the cart mandate, which gives final approval for a purchase once that specific item has been found. This way, an auditable trail is maintained that can be re-examined in cases of fraud. Along with cryptocurrency outfits Coinbase, Metamask and the Ethereum Foundation, Google has also developed an extension that would integrate the cryptocurrency-oriented x402 protocol. This would permit AI-driven purchasing from crypto wallets. The success of AP2 will largely depend on its adoption by other players in the ecosystem, especially those building agentic purchasing systems. Despite being a new protocol, AP2 has already gained the support of major financial providers such as Mastercard, American Express and PayPal. This gives the protocol a significant immediate footprint in the market. The technology behind AP2 addresses security concerns related to AI agents having access to payment details. It is an open protocol developed in collaboration with leading payments and technology companies for secure initiation and execution of agent-led payments across various platforms.
