How Shopify and Meta are diving deeper into banking

• Key insight: Shopify has added agentic payments capabilities through a partnership with Meta.
• What's at stake: Agentic commerce helps Shopify grow its payments volume and thus its ability to provide embedded payments and finance as an alternative to banks. 
• Expert quote: "Agentic commerce really excites us. The agents don't have the same challenges as humans."---Shopify's Rohit Mishra.

Amid data that shows banks are falling behind in the race to support embedded finance, Shopify is expanding its ability to place checkout close to its clients' digital storefronts. 

Shopify, which offers payments and other services to merchants as an alternative to banks, has closely aligned with Muse, Meta's private AI agent, which launched earlier this month, to support shopping and payout. 

"Agentic commerce really excites us. The agents don't have the same challenges as humans,"  Rohit Mishra, Shopify's vice president or product, told American Banker. "The AI agents have more context and they can find more products much faster." 

How it works

Muse scours Shopify's catalog to find the best fit for a shopper's AI prompt and then supports checkout through the Universal Commerce Protocol, which guides AI-powered shopping and checkout. This means Shopify merchants are discoverable and purchasable in Muse by default, with product data flowing through Shopify Catalog, according to Shopify.

The Universal Commerce Protocol is a Google-affiliated set of standards that are interoperable with AI from Perplexity, Gemini, ChatGPT and other products. The standards are designed to vet agents, to ensure intent and make it easier for AI agents to communicate. "Agents can act end to end on their own," Mishra said. 

Meta did not return a request for comment. Meta Muse is designed as an AI assistant to aid users in a variety of tasks but has tools that are specific to businesses. Muse's "Business in a Box," for example, would let someone with a business idea use the Muse "Personal Agent" to agentically create their new business presence and manage all of the functions needed to operate. Payment experts say Muse will push payment companies to improve their own agentic AI to provide the same level of expertise to their business users. In this case, Shopify is using Muse to add scale and speed to its own trove of product, merchant and consumer information to power autonomous shopping.

"We look at all of the data that we have to make sure that if you are looking for something like a leather jacket, we're looking at the best data about that product," Mishra said, adding that Shopify manages AI risk by using the "human buyer's" credentials that are vetted and stored on file. Shopify analyzes collective transactional data from hundreds of thousands of hosted storefronts, and Shopify's machine learning systems distinguish legitimate behavior from anomalous behavior. 

Shopify's other recent moves to support autonomous shopping include a partnership with Stripe and OpenAI that allows Shopify to integrate its Instant Checkout feature within ChatGPT, connecting its catalog of roughly 1 million merchants to direct conversational "buy buttons" and agentic payment tokens.

AI shopping makes Shopify's overall e-commerce platform attractive, according to Aaron Press, research director for Worldwide Payment Strategies at IDC.

"Shopify has an advantage because they manage the product data for so many merchants, meaning they get economies of scale in building out the capability," Press said, adding that having payment integrated with that AI-assisted buyer journey is essential to making sure that those events actually convert with as little human intervention as possible.  

"Otherwise, it's just AI-assisted search. That's nice, but conversion is the key, and if the handoff from discovery to shopping cart to payment isn't smooth, abandonment rates will be high," Press said. But the pressure to provide a good user experience remains, according to Press. "Muse is effectively just another method for product search and discovery," he said. "The integration with Shopify means that those products are more likely to be discovered, but doesn't necessarily mean it will be more effective than any other LLM."

Shopify's embedded payments

Shopify's focus on adding payment technology is helping it increase its transaction volume, which feeds its embedded payments and finance agenda, or the integration of payments or financial services directly into a client's app.

In the second quarter, Shopify's gross merchandise volume was $116 billion, up 32%, while Shopify Payments penetration reached 68% of GMV. The company also said 75% of Shop Pay customers use it again within 12 months, and the average order value on Shop Pay is about 16% higher than non-Shop Pay orders

"Shopify lays out the embedded payment value proposition pretty well," Press said. "The goal is to simplify the implementation of payments, taking the complexity off the merchant's plate and letting them focus on selling, rather than payment management."

The value isn't so much in the payment as in the platform, according to Press.  
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"Streamlined payments are just part of the overall feature set that make the platform more attractive to merchants," he said, adding Shop Pay goes beyond embedding payment, including stored credentials that are available across the entire ecosystem, meaning that the consumer can quickly finish a transaction, even at a merchant they have never used before.  

"There are other ways to accomplish this, such as PayPal, or Paze, but that requires enabling an additional service," Press said.