PayPal has been through many phases since its early days as a start-up helping people move money online. Over time it became a bridge between banks, merchants, and consumers handling payments across markets worldwide. Now the company faces a new turning point. Intelligent agents, powered by artificial intelligence, are beginning to change how commerce works. Instead of consumers clicking through websites, filtering options, and comparing prices, agents can carry out much of that process on their behalf. The model is being described as agentic commerce, and it could redefine the relationship between buyers, sellers, and platforms like PayPal.
On a recent Bloomberg podcast, Prakhar Mehrotra, Senior Vice President and Global Head of AI at PayPal, explained how the company is preparing for this transition. He described three main areas where AI is shaping PayPal’s approach: productivity, fraud and identity, and personalization. On productivity he said, “It’s about getting the same answer faster, and it’s about finding a better answer. So efficiency and effectiveness. And that’s what we are using at PayPal.” Developers inside the company are already seeing how AI shortens software cycles, streamlines code conversion, and cuts down the small but costly delays that used to slow launches. Global rollouts are also moving faster, which matters for a business that has to operate across currencies and languages.
Fraud has always been central to PayPal’s identity. The executive highlighted that the company now prevents more than a billion dollars in fraud every month. Detection methods that once relied on rigid rules later moved into machine learning, and are now entering what he called the reasoning era. The idea is to move from reacting to fraud toward anticipating it before it happens. Alongside fraud comes identity, where digital signatures and biometrics could establish what he described as agentic identity, an approach that allows AI systems to act confidently on a user’s behalf without layers of extra checks.
The third piece of the puzzle is personalization. In his view the last decade was shaped by recommendation systems that placed users into broad segments. The next step is tailoring services down to the smallest level of individual preference. “Now we have a true shot at personalizing it to your lowest atomic level,” he said. That vision is already visible in PayPal’s Smart Wallet, which integrates loyalty points, discount codes, and payment optimization into a single view. Instead of presenting a standard price and later adjusting it with rewards, the Smart Wallet can show the real cost up front, reducing the effort consumers have to spend calculating value.
This idea of reducing cognitive load runs through the entire vision of agentic commerce. As PayPal’s AI lead described it, commerce is a highly cognitive task, and people devote real energy to comparison and decision-making. Websites gave users filters and search bars, but eventually the number of options grew overwhelming. Agentic commerce takes those mental tasks and shifts them to digital assistants. At the simplest level, a bot can handle routine reorders. At the next level, an assistant can narrow down laptops within a certain budget.
Other platforms are working toward similar goals, though with different strategies. Amazon is deepening its integration of AI into Alexa aiming to move it from a voice assistant to a shopping facilitator. Google is experimenting with conversational shopping through Gemini allowing users to compare and purchase inside an AI dialogue. Apple has leaned heavily on identity and privacy though its commerce presence remains tied to its own ecosystem. Start-ups like Klarna and Shopify are embedding AI assistants directly into the merchant and consumer journey. Each of these competitors brings unique advantages, but PayPal’s focus on secure payments and transaction underwriting places it in a different position that is not chasing volume for its own sake, but reinforcing the reliability of digital transactions.
Another dimension is the rise of multi-agent systems. Complex tasks such as booking travel involve coordination among different services airlines, hotels, restaurants and transport providers. Agents will need to collaborate to complete such transactions smoothly. Trust becomes the binding factor. The system needs a way to verify that both buyer and seller agents are genuine, comparing it to the verified check marks seen on social platforms without that layer of authentication cooperation across agents would lack a stable foundation.
The possibility of algorithmic negotiation also came up in the conversation. Human commerce has long included bargaining, and PayPal’s leadership believes agents can replicate that practice at scale. “Agents can do that at scale. They don’t get tired. It’s all driven by compute,” he said.
Even with all these innovations, the anchor for PayPal remains the payments layer. The distinction is simple: AI may be probabilistic, but payments are deterministic. In the words of the company’s AI head, “There should be no mistakes. Even one mistake means you lose trust.” For agentic commerce to succeed, payments must be reliable every time. That is where PayPal’s role as an underwriter matters, giving buyers recourse if a transaction goes wrong. This was the principle on which the company was founded 25 years ago, and it still remains central today.
PayPal has already built the systems that align with the core requirements of agentic commerce. It prevents billions in fraud each month, underwrites consumer transactions, and has integrated personalization directly into payments through its Smart Wallet. These are the same foundations that agent driven commerce relies on: trust, security, and seamless consumer experience.
With two decades of global reach and experience in handling identity, payments, and merchant relationships, PayPal is equipped to extend its role into this new model of commerce. The companys ability to combine scale with reliability gives it a strong position as agentic systems become part of everyday transactions. Far from entering unfamiliar ground, PayPal is building on capabilities it has refined for years, which places it in a favorable position as commerce evolves.
