6 posts tagged with "payments"

perspectives from Paolo Ardoino, Charles Cascarilla and Rob Hadick

Background: Stablecoins are maturing into a payments rail​

• Rapid growth: Stablecoins began as collateral for trading on crypto exchanges, but by mid‑2025 they had become an important part of global payments. The market cap of dollar‑denominated stablecoins exceeded US$210 billion by the end of 2024 and transaction volume reached US$26.1 trillion, growing 57 % year‑on‑year. McKinsey estimated that stablecoins settle roughly US$30 billion of transactions each day and their yearly transaction volume reached US$27 trillion – still less than 1 % of all money flows but rising quickly.
• Real payments, not just trading: The Boston Consulting Group estimates that 5–10 % (≈US$1.3 trillion) of stablecoin volumes at the end of 2024 were genuine payments such as cross‑border remittances and corporate treasury operations. Cross‑border remittances account for roughly 10 % of the transaction count. By early 2025 stablecoins were used for ≈3 % of the US$200 trillion cross‑border payments market, with capital‑markets use still less than 1 %.
• Drivers of adoption: Emerging markets: In countries where local currencies depreciate by 50–60 % per year, stablecoins provide a digital dollar for savers and businesses. Adoption is particularly strong in Turkey, Argentina, Vietnam, Nigeria and parts of Africa. Technology and infrastructure: New orchestration layers and payment service providers (e.g., Bridge, Conduit, MoneyGram/USDC via MoneyGram) link blockchains with bank rails, reducing friction and improving compliance. Regulation: The GENIUS Act (2025) established a U.S. federal framework for payment stablecoins. The law sets strict reserve, transparency and AML requirements and creates a Stablecoin Certification Review Committee to decide whether state regimes are "substantially similar". It allows state‑qualified issuers with less than US$10 billion in circulation to operate under state oversight when standards meet federal levels. This clarity encouraged legacy institutions such as Visa to test stablecoin‑funded international transfers, with Visa's Mark Nelsen noting that the GENIUS Act "changed everything" by legitimising stablecoins

Paolo Ardoino (CEO, Tether)​

Vision: a “digital dollar for the unbanked”​

• Scale and usage: Ardoino says USDT serves 500 million users across emerging markets; about 35 % use it as a savings account, and 60–70 % of transactions involve only stablecoins (not crypto trading). He emphasises that USDT is now “the most used digital dollar in the world” and acts as “the dollar for the last mile, for the unbanked”. Tether estimates that 60 % of its market‑cap growth comes from grassroots use in Asia, Africa and Latin America.
• Emerging‑market focus: Ardoino notes that in the U.S. the payment system already works well, so stablecoins offer only incremental benefits. In emerging economies, however, stablecoins improve payment efficiency by 30–40 % and protect savings from high inflation. He describes USDT as a financial lifeline in Turkey, Argentina and Vietnam where local currencies are volatile.
• Compliance and regulation: Ardoino publicly supports the GENIUS Act. In a 2025 Bankless interview he said the Act sets “a strong framework for domestic and foreign stablecoins” and that Tether, as a foreign issuer, intends to comply. He highlighted Tether’s monitoring systems and cooperation with over 250 law‑enforcement agencies, emphasising that high compliance standards help the industry mature. Ardoino expects the U.S. framework to become a template for other countries and predicted that reciprocal recognition would allow Tether’s offshore USDT to circulate widely.
• Reserves and profitability: Ardoino underscores that Tether’s tokens are fully backed by cash and equivalents. He said the company holds about US$125 billion in U.S. Treasuries and has US$176 billion of total equity, making Tether one of the largest holders of U.S. government debt. In 2024 Tether generated US$13.7 billion profit and he expects this to grow. He positions Tether as a decentralised buyer of U.S. debt, diversifying global holders.
• Infrastructure initiatives: Ardoino announced an ambitious African energy project: Tether plans to build 100 000–150 000 solar‑powered micro‑stations, each serving villages with rechargeable batteries. The subscription model (~US$3 per month) allows villagers to swap batteries and use USDT for payments, supporting a decentralised economy. Tether also invests in peer‑to‑peer AI, telecoms and social media platforms to expand its ecosystem.
• Perspective on the payment shift: Ardoino views stablecoins as transformational for financial inclusion, enabling billions without bank accounts to access a digital dollar. He argues that stablecoins complement rather than replace banks; they provide an on‑ramp into the U.S. financial system for people in high‑inflation economies. He also claims the growth of USDT diversifies demand for U.S. Treasuries, benefiting the U.S. government.

Charles Cascarilla (Co‑Founder & CEO, Paxos)​

Vision: modernising the U.S. dollar and preserving its leadership​

• National imperative: In testimony before the U.S. House Financial Services Committee (March 2025), Cascarilla argued that “stablecoins are a national imperative” for the United States. He warned that failure to modernise could erode dollar dominance as other countries deploy digital currencies. He compared the shift to moving from physical mail to email; programmable money will enable instantaneous, near‑zero‑cost transfers accessible via smartphones.
• Regulatory blueprint: Cascarilla praised the GENIUS Act as a good baseline but urged Congress to add cross‑jurisdictional reciprocity. He recommended that the Treasury set deadlines to recognise foreign regulatory regimes so that U.S.‑issued stablecoins (and Singapore‑issued USDG) can be used abroad. Without reciprocity, he warned that U.S. firms might be locked out of global markets. He also advocated an equivalence regime where issuers choose either state or federal oversight, provided state standards meet or exceed federal rules.
• Private sector vs. CBDCs: Cascarilla believes the private sector should lead innovation in digital dollars, arguing that a central bank digital currency (CBDC) would compete with regulated stablecoins and stifle innovation. During congressional testimony he said there is no immediate need for a U.S. CBDC, because stablecoins already deliver programmable digital money. He emphasised that stablecoin issuers must hold 1:1 cash reserves, offer daily attestations, restrict asset rehypothecation, and comply with AML/KYC/BSA standards.
• Cross‑border focus: Cascarilla stressed that the U.S. must set global standards to enable interoperable cross‑border payments. He noted that high inflation in 2023–24 pushed stablecoins into mainstream remittances and the U.S. government’s attitude shifted from resistance to acceptance. He told lawmakers that only New York currently issues regulated stablecoins but a federal floor would raise standards across states.
• Business model and partnerships: Paxos positions itself as a regulated infrastructure provider. It issues the white‑label stablecoins used by PayPal (PYUSD) and Mercado Libre and provides tokenisation services for Mastercard, Robinhood and others. Cascarilla notes that eight years ago people asked how stablecoins could make money; today every institution that moves dollars across borders is exploring them.
• Perspective on the payment shift: For Cascarilla, stablecoins are the next evolution of money movement. They will not replace traditional banks but will provide a programmable layer on top of the existing banking system. He believes the U.S. must lead by creating robust regulations that encourage innovation while protecting consumers and ensuring the dollar remains the world’s reserve currency. Failure to do so could allow other jurisdictions to set the standards and threaten U.S. monetary primacy.

Rob Hadick (General Partner, Dragonfly)​

Vision: stablecoins as a disruptive payment infrastructure​

• Stablecoins as a disruptor: In a June 2025 article (translated by Foresight News), Hadick wrote that stablecoins are not meant to improve existing payment networks but to completely disrupt them. Stablecoins allow businesses to bypass traditional payment rails; when payment networks are built on stablecoins, all transactions are simply ledger updates rather than messages between banks. He warned that merely connecting legacy payment channels underestimates stablecoins’ potential; instead, the industry should reimagine payment channels from the ground up.
• Cross‑border remittances and market size: At the TOKEN2049 panel, Hadick disclosed that ≈10 % of remittances from the U.S. to India and Mexico already use stablecoins, illustrating the shift from traditional remittance rails. He estimated that the cross‑border payments market is about US$200 trillion, roughly eight times the entire crypto market. He emphasised that small and medium‑sized enterprises (SMEs) are underserved by banks and need frictionless capital flows. Dragonfly invests in “last‑mile” companies that handle compliance and consumer interaction rather than mere API aggregators.
• Stablecoin market segmentation: In a Blockworks interview, Hadick referenced data showing that business‑to‑business (B2B) stablecoin payments were annualising US$36 billion, surpassing person‑to‑person volumes of US$18 billion. He noted that USDT dominates 80–90 % of B2B payments, while USDC captures roughly 30 % of monthly volume. He was surprised that Circle (USDC) had not gained more share, though he observed signs of growth on the B2B side. Hadick interprets this data as evidence that stablecoins are shifting from retail speculation to institutional usage.
• Orchestration layers and compliance: Hadick emphasises the importance of orchestration layers—platforms that bridge public blockchains with traditional bank rails. He notes that the biggest value will accrue to settlement rails and issuers with deep liquidity and compliance capabilities. API aggregators and consumer apps face increasing competition from fintech players and commoditisation. Dragonfly invests in startups that offer direct bank partnerships, global coverage and high‑level compliance, rather than simple API wrappers.
• Perspective on the payment shift: Hadick views the shift to stablecoin payments as a “gold rush”. He believes we are only at the beginning: cross‑border volumes are growing 20–30 % month‑over‑month and new regulations in the U.S. and abroad have legitimised stablecoins. He argues that stablecoins will eventually replace legacy payment rails, enabling instant, low‑cost, programmable transfers for SMEs, contractors and global trade. He cautions that winners will be those who navigate regulation, build deep integrations with banks and abstract away blockchain complexity.

Conclusion: Alignments and differences​

• Shared belief in stablecoins’ potential: Ardoino, Cascarilla and Hadick agree that stablecoins will drive a trillion‑dollar shift in payments. All three highlight growing adoption in cross‑border remittances and B2B transactions and see emerging markets as early adopters.
• Different emphases: Ardoino focuses on financial inclusion and grassroots adoption, portraying USDT as a dollar substitute for the unbanked and emphasising Tether’s reserves and infrastructure projects. Cascarilla frames stablecoins as a national strategic imperative and stresses the need for robust regulation, reciprocity and private‑sector leadership to preserve the dollar’s dominance. Hadick takes the venture investor’s view, emphasising disruption of legacy payment rails, the growth of B2B transactions, and the importance of orchestration layers and last‑mile compliance.
• Regulation as catalyst: All three consider clear regulation—especially the GENIUS Act—essential for scaling stablecoins. Ardoino and Cascarilla advocate reciprocal recognition to allow offshore stablecoins to circulate internationally, while Hadick sees regulation enabling a wave of startups.
• Outlook: The stablecoin market is still in its early phases. With transaction volumes already in the trillions and use cases expanding beyond trading into remittances, treasury management and retail payments, the “book is just beginning to be written.” The perspectives of Ardoino, Cascarilla and Hadick illustrate how stablecoins could transform payments—from providing a digital dollar for billions of unbanked people to enabling businesses to bypass legacy rails—if regulators, issuers and innovators can build trust, scalability and interoperability.

Google’s Agent Payments Protocol (AP2) is a newly announced open standard designed to enable secure, trustworthy transactions initiated by AI agents on behalf of users. Developed in collaboration with over 60 payments and technology organizations (including major payment networks, banks, fintechs, and Web3 companies), AP2 establishes a common language for “agentic” payments – i.e. purchases and financial transactions that an autonomous agent (such as an AI assistant or LLM-based agent) can carry out for a user. AP2’s creation is driven by a fundamental shift: traditionally, online payment systems assumed a human is directly clicking “buy,” but the rise of AI agents acting on user instructions breaks this assumption. AP2 addresses the resulting challenges of authorization, authenticity, and accountability in AI-driven commerce, while remaining compatible with existing payment infrastructure. This report examines AP2’s technical architecture, purpose and use cases, integrations with AI agents and payment providers, security and compliance considerations, comparisons to existing protocols, implications for Web3/decentralized systems, and the industry adoption/roadmap.

Technical Architecture: How AP2 Works​

At its core, AP2 introduces a cryptographically secure transaction framework built on verifiable digital credentials (VDCs) – essentially tamper-proof, signed data objects that serve as digital “contracts” of what the user has authorized. In AP2 terminology these contracts are called Mandates, and they form an auditable chain of evidence for each transaction. There are three primary types of mandates in the AP2 architecture:

• Intent Mandate: Captures the user’s initial instructions or conditions for a purchase, especially for “human-not-present” scenarios (where the agent will act later without the user online). It defines the scope of authority the user gives the agent – for example, “Buy concert tickets if they drop below $200, up to 2 tickets”. This mandate is cryptographically signed upfront by the user and serves as verifiable proof of consent within specific limits.
• Cart Mandate: Represents the final transaction details that the user has approved, used in “human-present” scenarios or at the moment of checkout. It includes the exact items or services, their price, and other particulars of the purchase. When the agent is ready to complete the transaction (e.g. after filling a shopping cart), the merchant first cryptographically signs the cart contents (guaranteeing the order details and price), and then the user (via their device or agent interface) signs off to create a Cart Mandate. This ensures what-you-see-is-what-you-pay, locking in the final order exactly as presented to the user.
• Payment Mandate: A separate credential that is sent to the payment network (e.g. card network or bank) to signal that an AI agent is involved in the transaction. The Payment Mandate includes metadata such as whether the user was present or not during authorization and serves as a flag for risk management systems. By providing the acquiring and issuing banks with cryptographically verifiable evidence of user intent, this mandate helps them assess the context (for example, distinguishing an agent-initiated purchase from typical fraud) and manage compliance or liability accordingly.

All mandates are implemented as verifiable credentials signed by the relevant party’s keys (user, merchant, etc.), yielding a non-repudiable audit trail for every agent-led transaction. In practice, AP2 uses a role-based architecture to protect sensitive information – for instance, an agent might handle an Intent Mandate without ever seeing raw payment details, which are only revealed in a controlled way when needed, preserving privacy. The cryptographic chain of user intent → merchant commitment → payment authorization establishes trust among all parties that the transaction reflects the user’s true instructions and that both the agent and merchant adhered to those instructions.

Transaction Flow: To illustrate how AP2 works end-to-end, consider a simple purchase scenario with a human in the loop:

1. User Request: The user asks their AI agent to purchase a particular item or service (e.g. “Order this pair of shoes in my size”).
2. Cart Construction: The agent communicates with the merchant’s systems (using standard APIs or via an agent-to-agent interaction) to assemble a shopping cart for the specified item at a given price.
3. Merchant Guarantee: Before presenting the cart to the user, the merchant’s side cryptographically signs the cart details (item, quantity, price, etc.). This step creates a merchant-signed offer that guarantees the exact terms (preventing any hidden changes or price manipulation).
4. User Approval: The agent shows the user the finalized cart. The user confirms the purchase, and this approval triggers two cryptographic signatures from the user’s side: one on the Cart Mandate (to accept the merchant’s cart as-is) and one on the Payment Mandate (to authorize payment through the chosen payment provider). These signed mandates are then shared with the merchant and the payment network respectively.
5. Execution: Armed with the Cart Mandate and Payment Mandate, the merchant and payment provider proceed to execute the transaction securely. For example, the merchant submits the payment request along with the proof of user approval to the payment network (card network, bank, etc.), which can verify the Payment Mandate. The result is a completed purchase transaction with a cryptographic audit trail linking the user’s intent to the final payment.

This flow demonstrates how AP2 builds trust into each step of an AI-driven purchase. The merchant has cryptographic proof of exactly what the user agreed to buy at what price, and the issuer/bank has proof that the user authorized that payment, even though an AI agent facilitated the process. In case of disputes or errors, the signed mandates act as clear evidence, helping determine accountability (e.g. if the agent deviated from instructions or if a charge was not what the user approved). In essence, AP2’s architecture ensures that verifiable user intent – rather than trust in the agent’s behavior – is the basis of the transaction, greatly reducing ambiguity.

Purpose and Use Cases for AP2​

Why AP2 is Needed: The primary purpose of AP2 is to solve emerging trust and security issues that arise when AI agents can spend money on behalf of users. Google and its partners identified several key questions that today’s payment infrastructure cannot adequately answer when an autonomous agent is in the loop:

• Authorization: How to prove that a user actually gave the agent permission to make a specific purchase? (In other words, ensuring the agent isn’t buying things without the user’s informed consent.)
• Authenticity: How can a merchant know that an agent’s purchase request is genuine and reflects the user’s true intent, rather than a mistake or AI hallucination?
• Accountability: If a fraudulent or incorrect transaction occurs via an agent, who is responsible – the user, the merchant, the payment provider, or the creator of the AI agent?

Without a solution, these uncertainties create a “crisis of trust” around agent-led commerce. AP2’s mission is to provide that solution by establishing a uniform protocol for secure agent transactions. By introducing standardized mandates and proofs of intent, AP2 prevents a fragmented ecosystem of each company inventing its own ad-hoc agent payment methods. Instead, any compliant AI agent can interact with any compliant merchant/payment provider under a common set of rules and verifications. This consistency not only avoids user and merchant confusion, but also gives financial institutions a clear way to manage risk for agent-initiated payments, rather than dealing with a patchwork of proprietary approaches. In short, AP2’s purpose is to be a foundational trust layer that lets the “agent economy” grow without breaking the payments ecosystem.

Intended Use Cases: By solving the above issues, AP2 opens the door to new commerce experiences and use cases that go beyond what’s possible with a human manually clicking through purchases. Some examples of agent-enabled commerce that AP2 supports include:

• Smarter Shopping: A customer can instruct their agent, “I want this winter jacket in green, and I’m willing to pay up to 20% above the current price for it”. Armed with an Intent Mandate encoding these conditions, the agent will continuously monitor retailer websites or databases. The moment the jacket becomes available in green (and within the price threshold), the agent automatically executes a purchase with a secure, signed transaction – capturing a sale that otherwise would have been missed. The entire interaction, from the user’s initial request to the automated checkout, is governed by AP2 mandates ensuring the agent only buys exactly what was authorized.
• Personalized Offers: A user tells their agent they’re looking for a specific product (say, a new bicycle) from a particular merchant for an upcoming trip. The agent can share this interest (within the bounds of an Intent Mandate) with the merchant’s own AI agent, including relevant context like the trip date. The merchant agent, knowing the user’s intent and context, could respond with a custom bundle or discount – for example, “bicycle + helmet + travel rack at 15% off, available for the next 48 hours.” Using AP2, the user’s agent can accept and complete this tailored offer securely, turning a simple query into a more valuable sale for the merchant.
• Coordinated Tasks: A user planning a complex task (e.g. a weekend trip) delegates it entirely: “Book me a flight and hotel for these dates with a total budget of $700.” The agent can interact with multiple service providers’ agents – airlines, hotels, travel platforms – to find a combination that fits the budget. Once a suitable flight-hotel package is identified, the agent uses AP2 to execute multiple bookings in one go, each cryptographically signed (for example, issuing separate Cart Mandates for the airline and the hotel, both authorized under the user’s Intent Mandate). AP2 ensures all parts of this coordinated transaction occur as approved, and even allows simultaneous execution so that tickets and reservations are booked together without risk of one part failing mid-way.

These scenarios illustrate just a few of AP2’s intended use cases. More broadly, AP2’s flexible design supports both conventional e-commerce flows and entirely new models of commerce. For instance, AP2 can facilitate subscription-like services (an agent keeps you stocked on essentials by purchasing when conditions are met), event-driven purchases (buying tickets or items the instant a trigger event occurs), group agent negotiations (multiple users’ agents pooling mandates to bargain for a group deal), and many other emerging patterns. In every case, the common thread is that AP2 provides the trust framework – clear user authorization and cryptographic auditability – that allows these agent-driven transactions to happen safely. By handling the trust and verification layer, AP2 lets developers and businesses focus on innovating new AI commerce experiences without re-inventing payment security from scratch.

Integration with Agents, LLMs, and Payment Providers​

AP2 is explicitly designed to integrate seamlessly with AI agent frameworks and with existing payment systems, acting as a bridge between the two. Google has positioned AP2 as an extension of its Agent2Agent (A2A) protocol and Model Context Protocol (MCP) standards. In other words, if A2A provides a generic language for agents to communicate tasks and MCP standardizes how AI models incorporate context/tools, then AP2 adds a transactions layer on top for commerce. The protocols are complementary: A2A handles agent-to-agent communication (allowing, say, a shopping agent to talk to a merchant’s agent), while AP2 handles agent-to-merchant payment authorization within those interactions. Because AP2 is open and non-proprietary, it’s meant to be framework-agnostic: developers can use it with Google’s own Agent Development Kit (ADK) or any AI agent library, and likewise it can work with various AI models including LLMs. An LLM-based agent, for example, could use AP2 by generating and exchanging the required mandate payloads (guided by the AP2 spec) instead of just free-form text. By enforcing a structured protocol, AP2 helps transform an AI agent’s high-level intent (which might come from an LLM’s reasoning) into concrete, secure transactions.

On the payments side, AP2 was built in concert with traditional payment providers and standards, rather than as a rip-and-replace system. The protocol is payment-method-agnostic, meaning it can support a variety of payment rails – from credit/debit card networks to bank transfers and digital wallets – as the underlying method for moving funds. In its initial version, AP2 emphasizes compatibility with card payments, since those are most common in online commerce. The AP2 Payment Mandate is designed to plug into the existing card processing flow: it provides additional data to the payment network (e.g. Visa, Mastercard, Amex) and issuing bank that an AI agent is involved and whether the user was present, thereby complementing existing fraud detection and authorization checks. Essentially, AP2 doesn’t process the payment itself; it augments the payment request with cryptographic proof of user intent. This allows payment providers to treat agent-initiated transactions with appropriate caution or speed (for example, an issuer might approve an unusual-looking purchase if it sees a valid AP2 mandate proving the user pre-approved it). Notably, Google and partners plan to evolve AP2 to support “push” payment methods as well – such as real-time bank transfers (like India’s UPI or Brazil’s PIX systems) – and other emerging digital payment types. This indicates AP2’s integration will expand beyond cards, aligning with modern payment trends worldwide.

For merchants and payment processors, integrating AP2 would mean supporting the additional protocol messages (mandates) and verifying signatures. Many large payment platforms are already involved in shaping AP2, so we can expect they will build support for it. For example, companies like Adyen, Worldpay, Paypal, Stripe (not explicitly named in the blog but likely interested), and others could incorporate AP2 into their checkout APIs or SDKs, allowing an agent to initiate a payment in a standardized way. Because AP2 is an open specification on GitHub with reference implementations, payment providers and tech platforms can start experimenting with it immediately. Google has also mentioned an AI Agent Marketplace where third-party agents can be listed – these agents are expected to support AP2 for any transactional capabilities. In practice, an enterprise that builds an AI sales assistant or procurement agent could list it on this marketplace, and thanks to AP2, that agent can carry out purchases or orders reliably.

Finally, AP2’s integration story benefits from its broad industry backing. By co-developing the protocol with major financial institutions and tech firms, Google ensured AP2 aligns with existing industry rules and compliance requirements. The collaboration with payment networks (e.g. Mastercard, UnionPay), issuers (e.g. American Express), fintechs (e.g. Revolut, Paypal), e-commerce players (e.g. Etsy), and even identity/security providers (e.g. Okta, Cloudflare) suggests AP2 is being designed to slot into real-world systems with minimal friction. These stakeholders bring expertise in areas like KYC (Know Your Customer regulations), fraud prevention, and data privacy, helping AP2 address those needs out of the box. In summary, AP2 is built to be agent-friendly and payment-provider-friendly: it extends existing AI agent protocols to handle transactions, and it layers on top of existing payment networks to utilize their infrastructure while adding necessary trust guarantees.

Security, Compliance, and Interoperability Considerations​

Security and trust are at the heart of AP2’s design. The protocol’s use of cryptography (digital signatures on mandates) ensures that every critical action in an agentic transaction is verifiable and traceable. This non-repudiation is crucial: neither the user nor merchant can later deny what was authorized and agreed upon, since the mandates serve as secure records. A direct benefit is in fraud prevention and dispute resolution – with AP2, if a malicious or buggy agent attempts an unauthorized purchase, the lack of a valid user-signed mandate would be evident, and the transaction can be declined or reversed. Conversely, if a user claims “I never approved this purchase,” but a Cart Mandate exists with their cryptographic signature, the merchant and issuer have strong evidence to support the charge. This clarity of accountability answers a major compliance concern for the payments industry.

Authorization & Privacy: AP2 enforces an explicit authorization step (or steps) from the user for agent-led transactions, which aligns with regulatory trends like strong customer authentication. The User Control principle baked into AP2 means an agent cannot spend funds unless the user (or someone delegated by the user) has provided a verifiable instruction to do so. Even in fully autonomous scenarios, the user predefines the rules via an Intent Mandate. This approach can be seen as analogous to giving a power-of-attorney to the agent for specific transactions, but in a digitally signed, fine-grained manner. From a privacy perspective, AP2 is mindful about data sharing: the protocol uses a role-based data architecture to ensure that sensitive info (like payment credentials or personal details) is only shared with parties that absolutely need it. For example, an agent might send a Cart Mandate to a merchant containing item and price info, but the user’s actual card number might only be shared through the Payment Mandate with the payment processor, not with the agent or merchant. This minimizes unnecessary exposure of data, aiding compliance with privacy laws and PCI-DSS rules for handling payment data.

Compliance & Standards: Because AP2 was developed with input from established financial entities, it has been designed to meet or complement existing compliance standards in payments. The protocol doesn’t bypass the usual payment authorization flows – instead, it augments them with additional evidence and flags. This means AP2 transactions can still leverage fraud detection systems, 3-D Secure checks, or any regulatory checks required, with AP2’s mandates acting as extra authentication factors or context cues. For instance, a bank could treat a Payment Mandate akin to a customer’s digital signature on a transaction, potentially streamlining compliance with requirements for user consent. Additionally, AP2’s designers explicitly mention working “in concert with industry rules and standards”. We can infer that as AP2 evolves, it may be brought to formal standards bodies (such as the W3C, EMVCo, or ISO) to ensure it aligns with global financial standards. Google has stated commitment to an open, collaborative evolution of AP2 possibly through standards organizations. This open process will help iron out any regulatory concerns and achieve broad acceptance, similar to how previous payment standards (EMV chip cards, 3-D Secure, etc.) underwent industry-wide collaboration.

Interoperability: Avoiding fragmentation is a key goal of AP2. To that end, the protocol is openly published and made available for anyone to implement or integrate. It is not tied to Google Cloud services – in fact, AP2 is open-source (Apache-2 licensed) and the specification plus reference code is on a public GitHub repository. This encourages interoperability because multiple vendors can adopt AP2 and still have their systems work together. Already, the interoperability principle is highlighted: AP2 is an extension of existing open protocols (A2A, MCP) and is non-proprietary, meaning it fosters a competitive ecosystem of implementations rather than a single-vendor solution. In practical terms, an AI agent built by Company A could initiate a transaction with a merchant system from Company B if both follow AP2 – neither side is locked into one platform.

One possible concern is ensuring consistent adoption: if some major players chose a different protocol or closed approach, fragmentation could still occur. However, given the broad coalition behind AP2, it appears poised to become a de facto standard. The inclusion of many identity and security-focused firms (for example, Okta, Cloudflare, Ping Identity) in the AP2 ecosystem Figure: Over 60 companies across finance, tech, and crypto are collaborating on AP2 (partial list of partners). suggests that interoperability and security are being jointly addressed. These partners can help integrate AP2 into identity verification workflows and fraud prevention tools, ensuring that an AP2 transaction can be trusted across systems.

From a technology standpoint, AP2’s use of widely accepted cryptographic techniques (likely JSON-LD or JWT-based verifiable credentials, public key signatures, etc.) makes it compatible with existing security infrastructure. Organizations can use their existing PKI (Public Key Infrastructure) to manage keys for signing mandates. AP2 also seems to anticipate integration with decentralized identity systems: Google mentions that AP2 creates opportunities to innovate in areas like decentralized identity for agent authorization. This means in the future, AP2 could leverage DID (Decentralized Identifier) standards or decentralized identifier verification for identifying agents and users in a trusted way. Such an approach would further enhance interoperability by not relying on any single identity provider. In summary, AP2 emphasizes security through cryptography and clear accountability, aims to be compliance-ready by design, and promotes interoperability through its open standard nature and broad industry support.

Comparison with Existing Protocols​

AP2 is a novel protocol addressing a gap that existing payment and agent frameworks have not covered: enabling autonomous agents to perform payments in a secure, standardized manner. In terms of agent communication protocols, AP2 builds on prior work like the Agent2Agent (A2A) protocol. A2A (open-sourced earlier in 2025) allows different AI agents to talk to each other regardless of their underlying frameworks. However, A2A by itself doesn’t define how agents should conduct transactions or payments – it’s more about task negotiation and data exchange. AP2 extends this landscape by adding a transaction layer that any agent can use when a conversation leads to a purchase. In essence, AP2 can be seen as complementary to A2A and MCP, rather than overlapping: A2A covers the communication and collaboration aspects, MCP covers using external tools/APIs, and AP2 covers payments and commerce. Together, they form a stack of standards for a future “agent economy.” This modular approach is somewhat analogous to internet protocols: for example, HTTP for data communication and SSL/TLS for security – here A2A might be like the HTTP of agents, and AP2 the secure transactional layer on top for commerce.

When comparing AP2 to traditional payment protocols and standards, there are both parallels and differences. Traditional online payments (credit card checkouts, PayPal transactions, etc.) typically involve protocols like HTTPS for secure transmission, and standards like PCI DSS for handling card data, plus possibly 3-D Secure for additional user authentication. These assume a user-driven flow (user clicks and perhaps enters a one-time code). AP2, by contrast, introduces a way for a third-party (the agent) to participate in the flow without undermining security. One could compare AP2’s mandate concept to an extension of OAuth-style delegated authority, but applied to payments. In OAuth, a user can grant an application limited access to an account via tokens; similarly in AP2, a user grants an agent authority to spend under certain conditions via mandates. The key difference is that AP2’s “tokens” (mandates) are specific, signed instructions for financial transactions, which is more fine-grained than existing payment authorizations.

Another point of comparison is how AP2 relates to existing e-commerce checkout flows. For instance, many e-commerce sites use protocols like the W3C Payment Request API or platform-specific SDKs to streamline payments. Those mainly standardize how browsers or apps collect payment info from a user, whereas AP2 standardizes how an agent would prove user intent to a merchant and payment processor. AP2’s focus on verifiable intent and non-repudiation sets it apart from simpler payment APIs. It’s adding an additional layer of trust on top of the payment networks. One could say AP2 is not replacing the payment networks (Visa, ACH, blockchain, etc.), but rather augmenting them. The protocol explicitly supports all types of payment methods (even crypto), so it is more about standardizing the agent’s interaction with these systems, not creating a new payment rail from scratch.

In the realm of security and authentication protocols, AP2 shares some spirit with things like digital signatures in EMV chip cards or the notarization in digital contracts. For example, EMV chip card transactions generate cryptograms to prove the card was present; AP2 generates cryptographic proof that the user’s agent was authorized. Both aim to prevent fraud, but AP2’s scope is the agent-user relationship and agent-merchant messaging, which no existing payment standard addresses. Another emerging comparison is with account abstraction in crypto (e.g. ERC-4337) where users can authorize pre-programmed wallet actions. Crypto wallets can be set to allow certain automated transactions (like auto-paying a subscription via a smart contract), but those are typically confined to one blockchain environment. AP2, on the other hand, aims to be cross-platform – it can leverage blockchain for some payments (through its extensions) but also works with traditional banks.

There isn’t a direct “competitor” protocol to AP2 in the mainstream payments industry yet – it appears to be the first concerted effort at an open standard for AI-agent payments. Proprietary attempts may arise (or may already be in progress within individual companies), but AP2’s broad support gives it an edge in becoming the standard. It’s worth noting that IBM and others have an Agent Communication Protocol (ACP) and similar initiatives for agent interoperability, but those don’t encompass the payment aspect in the comprehensive way AP2 does. If anything, AP2 might integrate with or leverage those efforts (for example, IBM’s agent frameworks could implement AP2 for any commerce tasks).

In summary, AP2 distinguishes itself by targeting the unique intersection of AI and payments: where older payment protocols assumed a human user, AP2 assumes an AI intermediary and fills the trust gap that results. It extends, rather than conflicts with, existing payment processes, and complements existing agent protocols like A2A. Going forward, one might see AP2 being used alongside established standards – for instance, an AP2 Cart Mandate might work in tandem with a traditional payment gateway API call, or an AP2 Payment Mandate might be attached to a ISO 8583 message in banking. The open nature of AP2 also means if any alternative approaches emerge, AP2 could potentially absorb or align with them through community collaboration. At this stage, AP2 is setting a baseline that did not exist before, effectively pioneering a new layer of protocol in the AI and payments stack.

Implications for Web3 and Decentralized Systems​

From the outset, AP2 has been designed to be inclusive of Web3 and cryptocurrency-based payments. The protocol recognizes that future commerce will span both traditional fiat channels and decentralized blockchain networks. As noted earlier, AP2 supports payment types ranging from credit cards and bank transfers to stablecoins and cryptocurrencies. In fact, alongside AP2’s launch, Google announced a specific extension for crypto payments called A2A x402. This extension, developed in collaboration with crypto-industry players like Coinbase, the Ethereum Foundation, and MetaMask, is a “production-ready solution for agent-based crypto payments”. The name “x402” is an homage to the HTTP 402 “Payment Required” status code, which was never widely used on the Web – AP2’s crypto extension effectively revives the spirit of HTTP 402 for decentralized agents that want to charge or pay each other on-chain. In practical terms, the x402 extension adapts AP2’s mandate concept to blockchain transactions. For example, an agent could hold a signed Intent Mandate from a user and then execute an on-chain payment (say, send a stablecoin) once conditions are met, attaching proof of the mandate to that on-chain transaction. This marries the AP2 off-chain trust framework with the trustless nature of blockchain, giving the best of both worlds: an on-chain payment that off-chain parties (users, merchants) can trust was authorized by the user.

The synergy between AP2 and Web3 is evident in the list of collaborators. Crypto exchanges (Coinbase), blockchain foundations (Ethereum Foundation), crypto wallets (MetaMask), and Web3 startups (e.g. Mysten Labs of Sui, Lightspark for Lightning Network) are involved in AP2’s development. Their participation suggests AP2 is viewed as complementary to decentralized finance rather than competitive. By creating a standard way for AI agents to interact with crypto payments, AP2 could drive more usage of crypto in AI-driven applications. For instance, an AI agent might use AP2 to seamlessly swap between paying with a credit card or paying with a stablecoin, depending on user preference or merchant acceptance. The A2A x402 extension specifically allows agents to monetize or pay for services through on-chain means, which could be crucial in decentralized marketplaces of the future. It hints at agents possibly running as autonomous economic actors on blockchain (a concept some refer to as DACs or DAOs) being able to handle payments required for services (like paying a small fee to another agent for information). AP2 could provide the lingua franca for such transactions, ensuring even on a decentralized network, the agent has a provable mandate for what it’s doing.

In terms of competition, one could ask: do purely decentralized solutions make AP2 unnecessary, or vice-versa? It’s likely that AP2 will coexist with Web3 solutions in a layered approach. Decentralized finance offers trustless execution (smart contracts, etc.), but it doesn’t inherently solve the problem of “Did an AI have permission from a human to do this?”. AP2 addresses that very human-to-AI trust link, which remains important even if the payment itself is on-chain. Rather than competing with blockchain protocols, AP2 can be seen as bridging them with the off-chain world. For example, a smart contract might accept a certain transaction only if it includes a reference to a valid AP2 mandate signature – something that could be implemented to combine off-chain intent proof with on-chain enforcement. Conversely, if there are crypto-native agent frameworks (some blockchain projects explore autonomous agents that operate with crypto funds), they might develop their own methods for authorization. AP2’s broad industry support, however, might steer even those projects to adopt or integrate with AP2 for consistency.

Another angle is decentralized identity and credentials. AP2’s use of verifiable credentials is very much in line with Web3’s approach to identity (e.g. DIDs and VCs as standardized by W3C). This means AP2 could plug into decentralized identity systems – for instance, a user’s DID could be used to sign an AP2 mandate, which a merchant could verify against a blockchain or identity hub. The mention of exploring decentralized identity for agent authorization reinforces that AP2 may leverage Web3 identity innovations for verifying agent and user identities in a decentralized way, rather than relying only on centralized authorities. This is a point of synergy, as both AP2 and Web3 aim to give users more control and cryptographic proof of their actions.

Potential conflicts might arise only if one envisions a fully decentralized commerce ecosystem with no role for large intermediaries – in that scenario, could AP2 (initially pushed by Google and partners) be too centralized or governed by traditional players? It’s important to note AP2 is open source and intended to be standardizable, so it’s not proprietary to Google. This makes it more palatable to the Web3 community, which values open protocols. If AP2 becomes widely adopted, it might reduce the need for separate Web3-specific payment protocols for agents, thereby unifying efforts. On the other hand, some blockchain projects might prefer purely on-chain authorization mechanisms (like multi-signature wallets or on-chain escrow logic) for agent transactions, especially in trustless environments without any centralized authorities. Those could be seen as alternative approaches, but they likely would remain niche unless they can interact with off-chain systems. AP2, by covering both worlds, might actually accelerate Web3 adoption by making crypto just another payment method an AI agent can use seamlessly. Indeed, one partner noted that “stablecoins provide an obvious solution to scaling challenges [for] agentic systems with legacy infrastructure”, highlighting that crypto can complement AP2 in handling scale or cross-border scenarios. Meanwhile, Coinbase’s engineering lead remarked that bringing the x402 crypto extension into AP2 “made sense – it’s a natural playground for agents... exciting to see agents paying each other resonate with the AI community”. This implies a vision where AI agents transacting via crypto networks is not just a theoretical idea but an expected outcome, with AP2 acting as a catalyst.

In summary, AP2 is highly relevant to Web3: it incorporates crypto payments as a first-class citizen and is aligning with decentralized identity and credential standards. Rather than competing head-on with decentralized payment protocols, AP2 likely interoperates with them – providing the authorization layer while the decentralized systems handle the value transfer. As the line between traditional finance and crypto blurs (with stablecoins, CBDCs, etc.), a unified protocol like AP2 could serve as a universal adapter between AI agents and any form of money, centralized or decentralized.

Industry Adoption, Partnerships, and Roadmap​

One of AP2’s greatest strengths is the extensive industry backing behind it, even at this early stage. Google Cloud announced that it is “collaborating with a diverse group of more than 60 organizations” on AP2. These include major credit card networks (e.g. Mastercard, American Express, JCB, UnionPay), leading fintech and payment processors (PayPal, Worldpay, Adyen, Checkout.com, Stripe’s competitors), e-commerce and online marketplaces (Etsy, Shopify (via partners like Stripe or others), Lazada, Zalora), enterprise tech companies (Salesforce, ServiceNow, Oracle possibly via partners, Dell, Red Hat), identity and security firms (Okta, Ping Identity, Cloudflare), consulting firms (Deloitte, Accenture), and crypto/Web3 organizations (Coinbase, Ethereum Foundation, MetaMask, Mysten Labs, Lightspark), among others. Such a wide array of participants is a strong indicator of industry interest and likely adoption. Many of these partners have publicly voiced support. For example, Adyen’s Co-CEO highlighted the need for a “common rulebook” for agentic commerce and sees AP2 as a natural extension of their mission to support merchants with new payment building blocks. American Express’s EVP stated that AP2 is important for “the next generation of digital payments” where trust and accountability are paramount. Coinbase’s team, as noted, is excited about integrating crypto payments into AP2. This chorus of support shows that many in the industry view AP2 as the likely standard for AI-driven payments, and they are keen to shape it to ensure it meets their requirements.

From an adoption standpoint, AP2 is currently at the specification and early implementation stage (announced in September 2025). The complete technical spec, documentation, and some reference implementations (in languages like Python) are available on the project’s GitHub for developers to experiment with. Google has also indicated that AP2 will be incorporated into its products and services for agents. A notable example is the AI Agent Marketplace mentioned earlier: this is a platform where third-party AI agents can be offered to users (likely part of Google’s generative AI ecosystem). Google says many partners building agents will make them available in the marketplace with “new, transactable experiences enabled by AP2”. This implies that as the marketplace launches or grows, AP2 will be the backbone for any agent that needs to perform a transaction, whether it’s buying software from the Google Cloud Marketplace autonomously or an agent purchasing goods/services for a user. Enterprise use cases like autonomous procurement (one agent buying from another on behalf of a company) and automatic license scaling have been specifically mentioned as areas AP2 could facilitate soon.

In terms of a roadmap, the AP2 documentation and Google’s announcement give some clear indications:

• Near-term: Continue open development of the protocol with community input. The GitHub repo will be updated with additional reference implementations and improvements as real-world testing happens. We can expect libraries/SDKs to emerge, making it easier to integrate AP2 into agent applications. Also, initial pilot programs or proofs-of-concept might be conducted by the partner companies. Given that many large payment companies are involved, they might trial AP2 in controlled environments (e.g., an AP2-enabled checkout option in a small user beta).
• Standards and Governance: Google has expressed a commitment to move AP2 into an open governance model, possibly via standards bodies. This could mean submitting AP2 to organizations like the Linux Foundation (as was done with the A2A protocol) or forming a consortium to maintain it. The Linux Foundation, W3C, or even bodies like ISO/TC68 (financial services) might be in the cards for formalizing AP2. An open governance would reassure the industry that AP2 is not under single-company control and will remain neutral and inclusive.
• Feature Expansion: Technically, the roadmap includes expanding support to more payment types and use cases. As noted in the spec, after cards, the focus will shift to “push” payments like bank wires and local real-time payment schemes, and digital currencies. This means AP2 will outline how an Intent/Cart/Payment Mandate works for, say, a direct bank transfer or a crypto wallet transfer, where the flow is a bit different than card pulls. The A2A x402 extension is one such expansion for crypto; similarly, we might see an extension for open banking APIs or one for B2B invoicing scenarios.
• Security & Compliance Enhancements: As real transactions start flowing through AP2, there will be scrutiny from regulators and security researchers. The open process will likely iterate on making mandates even more robust (e.g., ensuring mandate formats are standardized, possibly using W3C Verifiable Credentials format, etc.). Integration with identity solutions (perhaps leveraging biometrics for user signing of mandates, or linking mandates to digital identity wallets) could be part of the roadmap to enhance trust.
• Ecosystem Tools: An emerging ecosystem is likely. Already, startups are noticing gaps – for instance, the Vellum.ai analysis mentions a startup called Autumn building “billing infrastructure for AI,” essentially tooling on top of Stripe to handle complex pricing for AI services. As AP2 gains traction, we can expect more tools like agent-focused payment gateways, mandate management dashboards, agent identity verification services, etc., to appear. Google’s involvement means AP2 could also be integrated into its Cloud products – imagine AP2 support in Dialogflow or Vertex AI Agents tooling, making it one-click to enable an agent to handle transactions (with all the necessary keys and certificates managed in Google Cloud).

Overall, the trajectory of AP2 is reminiscent of other major industry standards: an initial launch with a strong sponsor (Google), broad industry coalition, open-source reference code, followed by iterative improvement and gradual adoption in real products. The fact that AP2 is inviting all players “to build this future with us” underscores that the roadmap is about collaboration. If the momentum continues, AP2 could become as commonplace in a few years as protocols like OAuth or OpenID Connect are today in their domains – an unseen but critical layer enabling functionality across services.

Conclusion​

AP2 (Agents/Agent Payments Protocol) represents a significant step toward a future where AI agents can transact as reliably and securely as humans. Technically, it introduces a clever mechanism of verifiable mandates and credentials that instill trust in agent-led transactions, ensuring user intent is explicit and enforceable. Its open, extensible architecture allows it to integrate both with the burgeoning AI agent frameworks and the established financial infrastructure. By addressing core concerns of authorization, authenticity, and accountability, AP2 lays the groundwork for AI-driven commerce to flourish without sacrificing security or user control.

The introduction of AP2 can be seen as laying a new foundation – much like early internet protocols enabled the web – for what some call the “agent economy.” It paves the way for countless innovations: personal shopper agents, automatic deal-finding bots, autonomous supply chain agents, and more, all operating under a common trust framework. Importantly, AP2’s inclusive design (embracing everything from credit cards to crypto) positions it at the intersection of traditional finance and Web3, potentially bridging these worlds through a common agent-mediated protocol.

Industry response so far has been very positive, with a broad coalition signaling that AP2 is likely to become a widely adopted standard. The success of AP2 will depend on continued collaboration and real-world testing, but its prospects are strong given the clear need it addresses. In a broader sense, AP2 exemplifies how technology evolves: a new capability (AI agents) emerged that broke old assumptions, and the solution was to develop a new open standard to accommodate that capability. By investing in an open, security-first protocol now, Google and its partners are effectively building the trust architecture required for the next era of commerce. As the saying goes, “the best way to predict the future is to build it” – AP2 is a bet on a future where AI agents seamlessly handle transactions for us, and it is actively constructing the trust and rules needed to make that future viable.

Sources:

• Google Cloud Blog – “Powering AI commerce with the new Agent Payments Protocol (AP2)” (Sept 16, 2025)
• AP2 GitHub Documentation – “Agent Payments Protocol Specification and Overview”
• Vellum AI Blog – “Google’s AP2: A new protocol for AI agent payments” (Analysis)
• Medium Article – “Google Agent Payments Protocol (AP2)” (Summary by Tahir, Sept 2025)
• Partner Quotes on AP2 (Google Cloud Blog)
• A2A x402 Extension (AP2 crypto payments extension) – GitHub README

Here’s a concise, sourced brief on OKX Pay’s vision as it’s being signaled by Scotty James (ambassador), Sam Liu (Product Lead, OKX Pay), and Haider Rafique (Managing Partner & CMO).

TL;DR​

• Make on‑chain payments everyday‑useful. OKX Pay launched in Singapore, letting users scan GrabPay SGQR codes and pay with USDC/USDT while merchants still settle in SGD—a practical bridge between crypto and real‑world spending.
• Unify stablecoin liquidity. OKX is building a Unified USD Order Book so compliant stablecoins share one market and deeper liquidity—framing OKX Pay as part of a broader “stablecoin liquidity center” strategy.
• Scale acceptance via cards/rails. With Mastercard, OKX is introducing the OKX Card to extend stablecoin spending to mainstream merchant networks, positioned as “making digital finance more accessible, practical, and relevant to everyday life.”

What each person is emphasizing​

1) Scotty James — Mainstream accessibility & culture​

• Role: OKX ambassador who co‑hosts conversations on the future of payments with OKX product leaders at TOKEN2049 (e.g., sessions with Sam Liu), helping translate the product story for a broader audience.
• Context: He frequently fronts OKX stage moments and brand storytelling (e.g., TOKEN2049 fireside chats), underscoring the push to make crypto feel simple and everyday, not just technical.

Note: Scotty James is an ambassador rather than a product owner; his contribution is narrative and adoption‑focused, not the technical roadmap.

2) Sam Liu — Product architecture & fairness​

• Vision points he’s put forward publicly:
  • Fix stablecoin fragmentation with a Unified USD Order Book so “every compliant issuer can equally access liquidity”—principles of fairness and openness that directly support reliable, low‑spread payments.
  • Payments form factors: QR code payments now; Tap‑to‑Pay and the OKX Card coming in stages to extend acceptance.
• Supporting infrastructure: the Unified USD Order Book is live (USD, USDC, USDG in one book), designed to simplify the user experience and deepen liquidity for spend‑use cases.

3) Haider Rafique — Go‑to‑market & everyday utility​

• Positioning: OKX Pay (and the Mastercard partnership) is framed as taking crypto from trading to everyday life:

  “Our strategic partnership with Mastercard to launch the OKX Card reflects our commitment to making digital finance more accessible, practical, and relevant to everyday life.” — Haider Rafique, CMO, in Mastercard’s press release.

• Event leadership: At OKX’s Alphas Summit (on the eve of TOKEN2049), Haider joined CEO Star Xu and the SG CEO to discuss on‑chain payments and the OKX Pay rollout, highlighting the near‑term focus on Singapore and stablecoin payments that feel like normal checkout flows.

What’s already live (concrete facts)​

• Singapore launch (Sep 30, 2025):
  • Users in Singapore can scan GrabPay SGQR codes with the OKX app and pay using USDT or USDC (on X Layer); merchants still receive SGD. Collaboration with Grab and StraitsX handles the conversion.
  • Reuters corroborates the launch and flow: USDT/USDC → XSGD conversion → merchant receives SGD.
  • Scope details: Support is for GrabPay/SGQR codes presented by GrabPay merchants; PayNow QR is not supported yet (useful nuance when discussing QR coverage).

The near‑term arc of the vision​

1. Everyday, on‑chain spend
   • Start where payments are already ubiquitous (Singapore’s SGQR/GrabPay network), then expand acceptance via payment cards and new form factors (e.g., Tap‑to‑Pay).
2. Stablecoin liquidity as a platform advantage
   • Collapse splintered stablecoin pairs into one Unified USD Order Book to deliver deeper liquidity and tighter spreads, improving both trading and payments.
3. Global merchant acceptance via card rails
   • The OKX Card with Mastercard is the scale lever—extend stablecoin spending to everyday merchants through mainstream acceptance networks.
4. Low fees and speed on L2
   • Use X Layer so consumer payments feel fast/cheap while staying on‑chain. (Singapore’s “scan‑to‑pay” specifically uses USDT/USDC on X Layer held in your Pay account.)
5. Regulatory alignment where you launch
   • Singapore focus is underpinned by licensing progress and local rails (e.g., MAS licences; prior SGD connectivity via PayNow/FAST for exchange services), which helps position OKX Pay as compliant infrastructure rather than a workaround.

Related but separate: some coverage describes “self‑custody OKX Pay” with passkeys/MPC and “silent rewards” on deposits; treat that as the global product direction (wallet‑led), distinct from OKX SG’s regulated scan‑to‑pay implementation.

Why this is different​

• Consumer‑grade UX first: Scan a familiar QR, merchant still sees fiat settlement; no “crypto gymnastics” at checkout.
• Liquidity + acceptance together: Payments work best when liquidity (stablecoins) and acceptance (QR + card rails) land together—hence Unified USD Order Book plus Mastercard/Grab partnerships.
• Clear sequencing: Prove utility in a QR‑heavy market (Singapore), then scale out with cards/Tap‑to‑Pay.

Open questions to watch​

• Custody model by region: How much of OKX Pay’s rollout uses non‑custodial wallet flows vs. regulated account flows will likely vary by country. (Singapore docs clearly describe a Pay account using X Layer and Grab/StraitsX conversion.)
• Issuer and network breadth: Which stablecoins and which QR/card networks come next, and on what timetable? (BlockBeats notes Tap‑to‑Pay and regional card rollouts “in some regions.”)
• Economics at scale: Merchant economics and user incentives (fees, FX, rewards) as this moves beyond Singapore.

Quick source highlights​

• Singapore “scan‑to‑pay” launch (official + independent): OKX Learn explainer and Reuters piece.
• What Sam Liu is saying (fairness via unified order book; QR/Tap‑to‑Pay; OKX Card): Alphas Summit recap.
• Haider Rafique’s positioning (everyday relevance via Mastercard): Mastercard press release with direct quote.
• Unified USD Order Book details (what it is and why it matters): OKX docs/FAQ.
• Scotty James role (co‑hosting OKX Pay/future of payments sessions at TOKEN2049): OKX announcements/socials and prior TOKEN2049 appearances.

OKX is quietly pushing deeper into consumer payments with OKX Pay, a smart-account-powered mode that lives inside the main OKX app. Below is a concise, researcher-style briefing on what the product is, how it works, the rails it rides on, the compliance context, and the key questions to keep on your diligence checklist.

TL;DR​

• What it is: A self-custody-style payment mode for verified users that lets them send or receive USDC and USDT with zero user fees on X Layer, the OKX-operated Polygon CDK Layer 2. It relies on a smart-contract "Smart Account" secured with passkeys while OKX co-signs on-chain actions to complete transfers.
• Scope today: OKX is positioning Pay for consumer P2P and social payments via contacts, gift flows, and shareable payment links. Merchant acceptance is explicitly off-limits unless OKX grants permission, so any merchant reach is expected to land through the upcoming OKX Card and Mastercard’s stablecoin capabilities.
• Rails & assets: Pay defaults to X Layer (OKB gas), and users can bridge funds with Convert to Pay from Ethereum, TRON, Arbitrum, Base, Avalanche, or Optimism into USDC/USDT on X Layer.
• Costs & rewards: P2P transfers on X Layer are marketed as fee-free; converting from external chains still consumes that chain’s native gas. Stablecoin balances can earn daily-accruing, monthly-paid rewards, although rates vary and OKX can pause or change them.
• Availability & risk: Access requires an OKX account plus KYC, and Pay is not available in every jurisdiction. OKX’s February 2025 U.S. AML guilty plea leaves it under an independent monitor through 2027, a meaningful compliance consideration for American strategies.

Product Snapshot​

User flow​

• Switch the mobile app to Pay mode, then send value by name, phone, email, QR code, or payment link. Payments that go unclaimed automatically return after 48 hours.
• Convert to Pay pulls assets from multiple EVM and TRON networks into X Layer stablecoins. Conversions that stay inside X Layer have their gas covered by OKX.

Security and custody model​

• Pay relies on a Smart Account, which is a smart-contract wallet where every transaction needs signatures from the user and OKX. Assets are marketed as “not directly managed or hosted by OKX,” but the co-signature requirement makes Pay effectively semi-custodial.
• Users authenticate with passkeys stored in iCloud or Google Password Manager. ZK-Email supports passkey resets (except on TRON), and each chain can store up to three passkeys.

Assets and networks​

• Pay currently supports USDC and USDT, with OKX hinting that more stablecoins are on the roadmap.
• On-chain sends and receives work across X Layer, Ethereum, TRON, “and many other networks,” but the Pay experience is optimized for X Layer.

Fees, limits, and rewards​

• OKX advertises no additional fees for P2P stablecoin transfers on X Layer. Moving funds from other networks still requires paying that network’s gas.
• Internal transfers and deposits are free, while on-chain withdrawals incur normal network gas.
• Stablecoin balances inside Pay can enter Smart Savings, where rewards accrue daily and pay monthly; OKX can change, pause, or terminate the program at will, and identity verification is required to participate.

Messaging and social layer​

• Pay bakes in chat and gift-giving flows to emphasize social tipping and casual P2P use cases.

Rails & Ecosystem: X Layer​

• X Layer is OKX’s Ethereum Layer 2 built on Polygon CDK. An August 2025 upgrade pushed throughput toward ~5,000 TPS and moved the gas token to OKB, while subsidizing near-zero gas fees for Pay.
• X Layer ties directly into OKX Wallet and the centralized exchange, enabling features like “0-gas fast withdrawal” rails that reuse Pay’s infrastructure.

Merchant Reach (Now vs. Next)​

• Today: OKX Pay’s terms explicitly prohibit business-to-business or merchant transactions unless OKX authorizes them, cementing Pay as a consumer P2P feature for now.
• Near-term: Merchant reach is expected to flow through the OKX Card in partnership with Mastercard, which is rolling out end-to-end stablecoin acceptance capabilities so wallets can spend at traditional merchants.

Availability, KYC, and Compliance​

• Activating Pay demands an OKX account and completed KYC, and recipients must also verify their identity to receive funds.
• OKX cautions that Pay is not offered in every jurisdiction and maintains a list of restricted regions.
• Compliance observers should note OKX’s February 2025 guilty plea in the United States over AML violations. The settlement included roughly $505 million in penalties and an independent monitor through February 2027. Conversely, OKX has achieved in-principle approval from Singapore’s MAS for a payments licence and now supports instant SGD transfers via DBS rails.

Competitive Snapshot (Payments)​

Feature	OKX Pay	Binance Pay	Bybit Pay	Coinbase Payments / Commerce
Core use	P2P stablecoin pay on X Layer; social gifting; fee-free UX	P2P plus merchant ecosystem; zero gas for users; 80+ assets	P2P with web/app/POS integrations	USDC checkout infrastructure (Base) for platforms; Coinbase Commerce for merchants
Merchant use	Restricted unless OKX authorizes; merchant reach via OKX Card & Mastercard stack	Broad merchant program & partners	Positioning toward merchant integrations	Platform-level stablecoin rails; Commerce charges 1% today
Fees	No user fee on X Layer P2P; conversion gas for external chains	“Zero gas fees” positioning for users	Marketing around low fees	Commerce currently 1% to merchants
Assets	USDT, USDC (more stablecoins “later”)	80+ assets including BTC/ETH/USDT/USDC	Multi-asset	Primarily USDC (with PYUSD promos)
Rails	X Layer (OKB gas)	Binance internal + supported networks	Bybit internal + networks	Base + Coinbase stack

Strengths​

• Frictionless UX: passkeys, phone/email/links, and 48-hour auto-returns keep the Pay experience friendly for consumers.
• Gas-abstracted P2P: zero-fee transfers on X Layer plus covered intra-X Layer conversions reduce user friction.
• Exchange adjacency: tight links to the OKX exchange, X Layer, and the forthcoming OKX Card create an on/off-ramp bundle.

Frictions and Risks​

• Semi-custodial design: every Smart Account action depends on an OKX co-signature, so users inherit OKX’s availability and policy decisions.
• Merchant gap today: Pay’s consumer-first positioning limits merchant adoption until card and Mastercard flows mature.
• Regulatory overhang: the U.S. enforcement outcome and jurisdictional restrictions constrain global rollout.

What to Watch (3–9 Months)​

• OKX Card rollout: geography, fees, FX, rewards, BIN controls, and whether card spend can directly draw from Pay balances.
• Stablecoin coverage: expansion beyond USDT/USDC and how APY tiers evolve by region.
• Merchant pilots: concrete examples of Mastercard stablecoin settlement or OKX-authorized merchant flows inside Pay.
• X Layer economics: the impact of OKB-as-gas, throughput upgrades, and gas subsidies on Pay growth and on-chain activity.

Diligence Checklist​

• Regulatory scope: confirm jurisdictional eligibility and service availability before planning deployments.
• KYC and data flows: document the identity verification steps and what transaction metadata is shared between counterparties.
• Custody model: map failure modes if OKX cannot co-sign or if passkey resets are required; test ZK-Email recovery.
• Cost validation: measure actual user fees on X Layer versus gas consumed when bridging from other chains.
• Rewards: track APY, accrual, and payout mechanics while noting OKX’s right to adjust or suspend the program.

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Sources: OKX Pay FAQ and documentation, OKX Smart Account terms, X Layer upgrade announcements, Mastercard OKX Card partnership materials, Mastercard stablecoin settlement releases, OKX risk and compliance disclosures, Reuters coverage of the February 2025 U.S. enforcement action.

The prospect of Stripe launching its own Layer 1 (L1) blockchain has been a hot topic within the crypto community, fueled by recent strategic moves from the global payments giant. While unconfirmed, the whispers suggest a potentially transformative shift in the payments landscape. Given Stripe's core mission to "grow the GDP of the internet" by building robust global economic infrastructure, a dedicated blockchain could be a logical and powerful next step, especially considering the company's increasing embrace of blockchain-related ventures.

The Foundation for a Stripe L1​

Stripe has already laid significant groundwork that makes the idea of an L1 highly plausible. In February 2025, Stripe notably acquired Bridge, a stablecoin infrastructure company, for approximately $1.1 billion. This move clearly signals Stripe's commitment to stablecoin-based financial infrastructure. Following this acquisition, in May 2025, Stripe introduced its Stablecoin Financial Accounts service at the Stripe Sessions event. This service, available in 101 countries, allows businesses to:

• Hold USDC (issued by Circle) and USDB (issued by Bridge).
• Easily deposit and withdraw stablecoins via traditional USD transfers (ACH/wire) and EUR transfers (SEPA).
• Facilitate USDC deposits and withdrawals across major blockchain networks, including Arbitrum, Avalanche C-Chain, Base, Ethereum, Optimism, Polygon, Solana, and Stellar.

This means businesses worldwide can seamlessly integrate dollar-based stablecoins into their operations, bridging the gap between traditional banking and the burgeoning digital asset economy.

Adding to this, in June 2025, Stripe acquired Privy.io, a Web3 wallet infrastructure startup. Privy offers crucial features like email or SSO-based wallet creation, transaction signing, key management, and gas abstraction. This acquisition rounds out Stripe's capabilities, providing the essential wallet infrastructure needed to facilitate broader blockchain adoption.

With both stablecoin and wallet infrastructure now firmly in place, the strategic synergy of launching a dedicated blockchain network becomes apparent. It would allow Stripe to more tightly integrate these services and unlock new possibilities within its ecosystem.

What a Stripe L1 Could Mean for Payments​

If Stripe were to introduce its own L1 network, it could significantly enhance existing payment services and enable entirely new functionalities.

Base Case Enhancements​

In its most fundamental form, a Stripe L1 could bring several immediate improvements:

• Integrated Stablecoin Financial Accounts: Stripe's existing stablecoin financial accounts service would likely fully integrate with the Stripe L1, allowing merchants to deposit, withdraw, and utilize their stablecoin holdings directly on the network for various financial activities.
• Stablecoin Settlement for Merchants: Merchants could gain the option to settle their sales proceeds directly in dollar-based stablecoins. This would be a substantial benefit, particularly for businesses with high dollar demand but limited access to traditional banking rails, streamlining cross-border transactions and reducing FX complexities.
• Customer Wallet Services: Leveraging Privy's infrastructure, a Stripe L1 could enable individuals to easily create Web3 wallets within the Stripe ecosystem. This would facilitate stablecoin payments for customers and open doors for participation in a wider range of financial activities on the Stripe L1.
• Stablecoin Payment Options for Customers: Customers currently relying on cards or bank transfers could connect their Web3 wallets (whether Stripe-provided or third-party) and choose stablecoins as a payment method, offering greater flexibility and potentially lower transaction costs.

Revolutionary "Bull Case" Scenarios​

Beyond these foundational improvements, a Stripe L1 has the potential to truly revolutionize the payment industry, tackling long-standing inefficiencies:

• Direct Customer-to-Merchant Payments: One of the most exciting prospects is the potential for direct payments between customers and merchants using stablecoins on Stripe L1. This could bypass traditional intermediaries like card networks and issuing banks, leading to significantly faster settlement times and reduced transaction fees. While safeguards for refunds and cancellations would be crucial, the directness of blockchain transactions offers unparalleled efficiency.
• Micro-Payment Based Subscription Services: Blockchain's inherent support for micro-payments could unlock entirely new business models. Imagine subscriptions billed by the minute, where users pay strictly based on actual usage, with all payments automated via smart contracts. This contrasts sharply with current monthly or annual models, opening up a vast array of new service offerings.
• DeFi Utilization of Short-Term Deposits: In traditional systems, payment settlements often face delays due to the need for fraud detection, cancellations, and refunds. If Stripe L1 were to handle direct stablecoin payments, funds might still be temporarily held on the network before full release to the merchant. These short-term deposits, expected to be substantial in scale, could form a massive liquidity pool on Stripe L1. This liquidity could then be deployed in decentralized finance (DeFi) protocols, lending markets, or invested in high-yield bonds, significantly improving capital efficiency for all participants.

The Future of Payments​

The rumors surrounding a Stripe L1 network are more than just speculative chatter; they point to a deeper trend in the financial world. Payment giants like Visa, Mastercard, and PayPal have primarily viewed blockchain and stablecoins as supplementary features. If Stripe fully commits to an L1, it could signal a historic paradigm shift in payment systems, fundamentally reshaping how money moves globally.

Historically, Stripe has excelled as a payment gateway and acquirer. However, a Stripe L1 could allow the company to expand its role, potentially assuming functions traditionally held by card networks and even issuing banks. This move would not only enhance payment efficiency through blockchain but also enable previously unachievable features like granular micro-streaming subscriptions and automated management of short-term liquidity.

We are truly on the cusp of a disruptive era in payment systems, powered by blockchain technology. Whether Stripe officially launches an L1 remains to be seen, but the strategic pieces are certainly falling into place for such a monumental step.

The gap between the promise of crypto payments and the reality for e-commerce merchants remains surprisingly wide. Here's why—and where the opportunities lie for founders and builders.

Despite cryptocurrency's rise in mainstream awareness, accepting crypto payments on leading e-commerce platforms like Shopify remains far more complicated than it should be. The experience is fragmented for merchants, confusing for customers, and limiting for developers—even as demand for crypto payment options continues to grow.

After speaking with merchants, analyzing user flows, and reviewing the current plugin ecosystem, I've mapped the problem space to identify where entrepreneurial opportunities exist. The punchline? The current solutions leave much to be desired, and the startup that solves these pain points could capture significant value in the emerging crypto-commerce landscape.

The Merchant's Dilemma: Too Many Hoops, Too Little Integration​

For Shopify merchants, accepting crypto presents an immediate set of challenges:

Restrictive Integration Options — Unless you've upgraded to Shopify Plus (starting at $2,000/month), you cannot add custom payment gateways directly. You're limited to the few crypto payment providers Shopify has formally approved, which may not support the currencies or features you want.

The Third-Party "Tax" — Shopify charges an additional 0.5% to 2% fee on transactions processed through external payment gateways—effectively penalizing merchants for accepting crypto. This fee structure actively discourages adoption, especially for small merchants with tight margins.

The Multi-Platform Headache — Setting up crypto payments means juggling multiple accounts. You'll need to create an account with the payment provider, complete their business verification process, configure API keys, and then connect everything to Shopify. Each provider has its own dashboard, reporting, and settlement schedule, creating an administrative maze.

Refund Purgatory — Perhaps the most glaring issue: Shopify does not support automatic refunds for cryptocurrency payments. While credit card refunds can be issued with a click, crypto refunds require merchants to manually arrange payments through the gateway or send crypto back to the customer's wallet. This error-prone process creates friction in a critical part of the customer relationship.

A merchant I spoke with put it bluntly: "I was excited to accept Bitcoin, but after going through the setup and handling my first refund request, I almost turned it off. The only reason I kept it was that a handful of my best customers prefer paying this way."

The Customer Experience Is Still Web1 in a Web3 World​

When customers attempt to pay with crypto on Shopify stores, they encounter a user experience that feels distinctly behind the times:

The Redirect Shuffle — Unlike the seamless in-line credit card forms or one-click wallets like Shop Pay, selecting crypto payment typically redirects customers to an external checkout page. This jarring transition breaks the flow, creates trust issues, and increases abandonment rates.

The Countdown Timer of Doom — After selecting a cryptocurrency, customers are presented with a payment address and a ticking clock (typically 15 minutes) to complete the transaction before the payment window expires. This pressure-inducing timer exists because of price volatility, but it creates anxiety and frustration, especially for crypto newcomers.

The Mobile Maze — Making crypto payments on mobile devices is particularly cumbersome. If a customer needs to scan a QR code displayed on their phone with their wallet app (which is also on their phone), they're stuck in an impossible situation. Some integrations offer workarounds, but they're rarely intuitive.

The "Where's My Order?" Moment — After sending crypto, customers often face an uncertain wait. Unlike credit card transactions that confirm instantly, blockchain confirmations can take minutes (or longer). This leaves customers wondering if their order went through or if they need to try again—a recipe for support tickets and abandoned carts.

The Developer's Straitjacket​

Developers hoping to improve this situation face their own set of constraints:

Shopify's Walled Garden — Unlike open platforms like WooCommerce or Magento where developers can freely create payment plugins, Shopify tightly controls who can integrate with their checkout. This limitation stifles innovation and keeps promising solutions off the platform.

Limited Checkout Customization — On standard Shopify plans, developers cannot modify the checkout UI to make crypto payments more intuitive. There's no way to add explainer text, custom buttons, or Web3 wallet connection interfaces within the checkout flow.

The Compatibility Treadmill — When Shopify updates its checkout or payment APIs, third-party integrations must adapt quickly. In 2022, a platform change forced several crypto payment providers to rebuild their integrations, leaving merchants scrambling when their payment options suddenly stopped working.

A developer I interviewed who built crypto payment solutions for both WooCommerce and Shopify noted: "On WooCommerce, I can build exactly what merchants need. On Shopify, I'm constantly fighting the platform limitations—and that's before we even get to the technical challenges of blockchain integration."

Current Solutions: A Fragmented Landscape​

Shopify currently supports several crypto payment providers, each with their own limitations:

BitPay offers automatic conversion to fiat and supports about 14 cryptocurrencies, but charges a 1% processing fee and has its own KYC requirements for merchants.

Coinbase Commerce allows merchants to accept major cryptocurrencies, but doesn't automatically convert to fiat, leaving merchants to manage volatility. Refunds must be handled manually outside their dashboard.

Crypto.com Pay advertises zero transaction fees and supports 20+ cryptocurrencies, but works best for customers already in the Crypto.com ecosystem.

DePay takes a Web3 approach, allowing customers to pay with any token that has DEX liquidity, but requires customers to use Web3 wallets like MetaMask—a significant barrier for mainstream shoppers.

Other options include specialty providers like OpenNode (Bitcoin and Lightning), Strike (Lightning for US merchants), and Lunu (focused on European luxury retail).

The common thread? No single provider offers a comprehensive solution that delivers the simplicity, flexibility, and user experience that merchants and customers expect in 2025.

Where the Opportunities Lie​

These gaps in the market create several promising opportunities for founders and builders:

1. The Universal Crypto Checkout​

There's room for a "meta-gateway" that aggregates multiple payment providers under a single, cohesive interface. This would give merchants one integration point while offering customers their choice of cryptocurrency, with the system intelligently routing payments through the optimal provider. By abstracting the complexity, such a solution could dramatically simplify the merchant experience while improving conversion rates.

2. The Seamless Wallet Integration​

The current disconnected experience—where customers are redirected to external pages—is ripe for disruption. A solution that enables in-checkout crypto payments via WalletConnect or browser wallet integration could eliminate redirects entirely. Imagine clicking "Pay with Crypto" and having your browser wallet pop up directly, or scanning a QR code that immediately connects to your mobile wallet without leaving the checkout page.

3. The Instant Confirmation Service​

The lag between payment submission and blockchain confirmation is a major friction point. An innovative approach would be a payment guarantee service that fronts the payment to the merchant instantly (allowing immediate order processing) while handling blockchain confirmation in the background. By taking on settlement risk for a small fee, such a service could make crypto payments feel as immediate as credit cards.

4. The Refund Resolver​

The lack of automated refunds is perhaps the most glaring gap in the current ecosystem. A platform that simplifies crypto refunds—perhaps through a combination of smart contracts, escrow systems, and user-friendly interfaces—could remove a major pain point for merchants. Ideally, it would enable one-click refunds that handle all the complexity of sending crypto back to customers.

5. The Crypto Accountant​

Tax and accounting complexity remains a significant barrier for merchants accepting crypto. A specialized solution that integrates with Shopify and crypto wallets to automatically track payment values, calculate gains/losses, and generate tax reports could transform a headache into a selling point. By making compliance simple, such a tool could encourage more merchants to accept crypto.

The Big Picture: Beyond Payments​

Looking ahead, the real opportunity may extend beyond simply fixing the current checkout experience. The most successful solutions will likely leverage crypto's unique properties to offer capabilities that traditional payment methods cannot match:

Borderless Commerce — True global reach without currency exchange complications, enabling merchants to sell to underbanked regions or countries with unstable currencies.

Programmable Loyalty — NFT-based loyalty programs that provide special benefits to repeat customers who pay in crypto, creating stickier customer relationships.

Decentralized Escrow — Smart contracts that hold funds until delivery is confirmed, balancing the interests of both merchants and customers without requiring a trusted third party.

Token-Gated Exclusivity — Special products or early access for customers who hold specific tokens, creating new business models for premium merchants.

The Bottom Line​

The current state of crypto checkout on Shopify reveals a striking gap between the promise of digital currency and its practical implementation in e-commerce. Despite mainstream interest in cryptocurrencies, the experience of using them for everyday purchases remains needlessly complex.

For entrepreneurs, this gap represents a significant opportunity. The startup that can deliver a truly seamless crypto payment experience—one that feels as easy as credit cards for both merchants and customers—stands to capture substantial value as digital currency adoption continues to grow.

The blueprint is clear: abstract away the complexity, eliminate redirects, solve the confirmation lag, simplify refunds, and integrate natively with the platforms merchants already use. Execution remains challenging due to technical complexity and platform limitations, but the prize for getting it right is a central position in the future of digital commerce.

In a world where money is increasingly digital, the checkout experience should reflect that reality. We're not there yet—but we're getting closer.

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What crypto payment experiences have you encountered as a merchant or customer? Have you tried implementing crypto payments on your Shopify store? Share your experiences in the comments below.