PayPal backs Google’s AI-powered payments push

PayPal has confirmed it will support Google’s artificial intelligence-backed Universal Commerce Protocol, and will soon appear as a payment option inside the new checkout, as revealed in a press statement released over the weekend. 

The payments platform’s chief executive and president, Alex Chriss, said on social media platform X that taking up UCP is the “next phase” of the collaboration between the two companies announced last September, Cryptopolitan reported.

Google introduced the protocol publicly on Sunday during the National Retail Federation’s annual convention in New York. The technology company’s executives coined UCP as an open, agentic commerce standard that connects AI systems, retailers, and payment providers through “a common language.”

At the conference, Google said it is launching an agentic commerce protocol to support retailers while AI agents handle product discovery, checkout, and post-purchase support. 

Google doubles down on agentic commerce with UCP

According to Google’s statement, UCP is open and platform-agnostic enough to support any credential provider and reduces one-off integrations between individual agents and merchants.

“Instead of requiring unique connections for every individual agent, UCP enables all agents to interact easily,” Vidhya Srinivasan, vice president and general manager of Google Ads & Commerce, said in a blog post.

UCP is the second open agentic commerce protocol Google has developed in as many years, following the release of Agent Payments Protocol (AP2) last year. The tech giants reiterated that the new protocol is meant to work with its other agentic networks, including Agent2Agent and Model Context Protocol (MCP).

Google plans to add more shopping features to UCP in the coming months, including related product recommendations, loyalty and rewards programs, and customized shopping experiences through its platforms.

PayPal joins several retailers that helped develop UCP

Several major retailers like Shopify, Etsy, Wayfair, Target, and Walmart, and e-commerce platforms participated in creating the protocol, Google revealed. Shopify Vice President Vanessa Lee said the company contributed its experience in building checkout systems at scale. 

“Shopify has a history of building checkouts for millions of unique retail businesses. We have taken everything we’ve seen over the decades to make UCP a robust commerce standard that can scale,” Lee said in a statement.

PayPal executives said the protocol could bring down the walls that barred agentic commerce services adoption seen in the hindered interoperability between platforms and AI environments. 

“Protocols like UCP turn agentic commerce into something merchants can actually adopt at scale. Interoperability is what allows retailers to connect at once and reach many environments, while maintaining trust, transparency, and control,” Prakhar Mehrotra, SVP and Head of AI at PayPal, surmised.

Michelle Gill, general manager of small business and financial services at PayPal, believes the company will become more proficient in providing trusted payments when coupled with UCP. 

“The next generation of commerce will be defined by how well we build open, trusted infrastructure that serves everyone. Supporting and collaborating with Google on UCP shows how a trusted payments experience layer makes agentic commerce a reality for consumers,” Gill stated.

However, some industry analysts do not see agentic commerce working without the coordination from consumers, merchants, and payment providers. Richard Crone, chief executive of Crone Consulting, said Google and Shopify are “trying to provide a degree of comfort to the merchant,” promising to increase sales, discoverability, and conversions by “supplying their product data to Gemini and Shopify for an off-site sale.”

“The other side of this is that if the checkout goes to Gemini, the merchant loses the last touch point…The product detail pages are the fuel that they need to feed their agentic commerce engine,” Crone said.

PayPal participates in Klearly €12 million funding round

The UCP announcement comes on the heels of PayPal venture’s involvement in European payments firm Klearly, which raised €12 million in Series A funding completed on Tuesday. Italian Founders Fund, Global PayTech Ventures, Antler Elevate and Shapers also joined the round, bringing Klearly’s total funding to €20 million.

Amsterdam-based Klearly said it has more than 4,000 merchants processing payments on its platform and plans to use the new capital to move operations deep into Italy and Belgium.

In the United States, PayPal signed one of New York City’s largest office leases of the past year to deepen its routes further in Hudson Square, a neighborhood that houses Google and Disney. 

It signed a 10-year lease covering 261,000 square feet at the combined 345 Hudson Street and 555 Greenwich Street office complex, announced Monday by landlord Hudson Square Properties.

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