Stripe's John Collison on How Agentic Commerce Will Reshape the Internet

Introduction

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Host Introduction

2:00Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. So, Tracy, another episode where I can mention that I've been vibe-coding. No, but you know what? Here's something that I may have mentioned before. I'm sure you have, Joe. But I'm not 100% sure. Okay. I think I've mentioned it. It's actually very easy. You just come up with an idea and you type it in English and then it's there. You know the hardest part? Registering a domain name. Yeah, you've complained about this. It's so, everything else is so smooth, right? You just type it in English

2:31and then you're like, have your little app or whatever. And then it's like, oh, I want to put this somewhere on the web. And then you go to like a domain name registrar. I had been using GoDaddy for a long time. And then it's like, that's this field for this field and this field for this field and toggle this and this worker and this pages and the A field and the app field and the B field. And I swear, that's like, it's like so maddening. I just hated it so much. It's so annoying. It's the hardest part of the whole aspect. I have terrible memories as well about dealing with Bluehost and things like that.

3:02Is this the first time you've ever set up a domain? No, that's the thing. This is the other thing. I've done it before. I've done it before and it's still incredibly annoying. Progress comes slow to domain registration. I mean, there's probably good reason for it to be complicated. You don't want it to switch in the wrong direction. Anyway, I was very excited. It was a couple of weeks ago. It was actually, while the two of us were in Madrid, the company Stripe, the payment company, announced that there was going to be some agreement with Cloudflare, which does a lot of web hosting stuff,

3:32where you could just have the agent buy a domain name for you. And so you think of one and you just type it in, buy this domain name and host it there. And I immediately was like, oh my God. I wrote about it in the newsletter. It's like, this would be so, this would have been so nice a month or so. Yet another thing that you will never have to do again. Exactly. Let another, yeah. So, I mean, I saw the Stripe news and it generated a lot of buzz and it all comes under the umbrella, I guess, of agentic commerce. So this idea that you can have agents that are actually directly transacting on your behalf with other agents or other websites.

4:03And I have to say, as someone who shops online a lot, this is the first time I feel disintermediated by AI. I'm actually particularly excited about this episode because I'm very curious, basically, what you specifically will ask. As someone, as a person- As a professional shopper on the web. I was going to say, as a person of taste. Oh, thank you. As a person of taste, I have seen you say scrolling very nice paper, like websites for wallpapers

4:33and things like that. And I'm curious, what does it mean for that if your AI bot two years from now knows you so well, it's like, Tracy, I thought you needed this new wallpaper because you're doing this. I just went ahead and ordered it to you to be delivered tomorrow. This changes the world. It brings up so many interesting questions about discoverability and taste, as you mentioned, and also just the nature of the internet because when I think about the internet, like a lot of other things, it's basically built to sell you things, whether that's products

5:04or information, content. And we know that it also runs on those sales in the sense that a lot of the internet is driven by advertising, which is related to traffic, obviously. We actually did that episode way back about how the internet runs on millions of ad auctions. That's right. And so, this topic of agentic commerce and the payment system, obviously, it's of interest to anyone who shops and does stuff online, but it's also really relevant to the actual evolution of the internet.

5:34Couldn't agree more. And I would go further and say it's really important for like culture itself. Advertising is a creation of culture. Ads are influential. Ads do all this stuff. What if there's a changing advertising? All this kind of stuff. Anyway,

Agentic Commerce

5:46let's stop hearing from ourselves. We really do have the perfect guest, someone we've wanted to talk to for a long time, someone who's right in the thick of it and all this stuff with agentic commerce and payments. We're going to be speaking with John Collison, the president and co-founder of Stripe. So, John, thank you so much for coming on AdLots. Great to be here. I'm very excited. Yeah, buzzwords, et cetera. What is, quote, agentic commerce, unquote? Yeah, so there's a bit of a definitional question, but broadly, it is AI buying something for you.

6:16Okay. And we think about it in two categories. One is on the consumer side of things. This is where you were skeptical whether Tracy will ever be an adopter where you research something in ChatGPT or Claude or what have you and then go buy it there or have it buy it for you. But then the second is your Cloudflare example. And so it's B2B or developer-led agentic commerce where you're just trying to have Claude Co. do something for you. And as part of it, it needs to buy resources. And we can talk about that because they're quite different. Yeah, Tracy, and we'll get to this,

6:48but the resources is another thing I've whined about, which is that when you do an API key, you have an idea and you have to go to the web and sometimes you have to enter a credit card number. That's really annoying, et cetera. But we'll get into that. But that is another big element of it that I feel like is getting closer to being solved. Okay, well, on this credit card point, I mean, the history of online payments is basically a continuous elimination of the friction, right? And going from I have to enter my credit card details to I have to log into PayPal to now I can just

7:18basically click a button, whether it's Apple Pay or something else. Is agentic commerce, is this just another leg of the frictionless process or is something fundamental in your view changing here?

7:34Both. So part of agentic commerce is just reducing the friction. And you're right that the general direction of travel over time, you go back to the introduction of credit cards when the earliest adopters of computer networks and then the original e-commerce and now, like you're saying, while it's like Apple Pay and Google Pay and we have a protocol link and things like that, there's generally been this elimination of friction. And our view is that at a very minimum, we're going to see, and Tracy, I think this is where you can maybe get behind it, is leave aside any agent decision-making

8:05that's happening. Just the final step of buying something, you know, you might have researched a product in an AI app before where you're going back and forth. I was trying to buy a bike case recently to travel with my bike and you're asking all these questions hard versus soft and do you need to take off the handlebars and what's the right one? It's finding all these cool little niche brands. I think it's actually quite good for smaller merchants, by the way, because you have the ability for them to be discovered that they mightn't have had otherwise. But anyway, when you find the product at the very end, do you really then want to go and be filling out

8:36all these web form fields and things like that? Or do you want to just say, yeah, that sounds good, buy it for me in this size? And our bet is that people will want the lower friction option. I think in the history of technology, the lower friction option tends to win out. And so we think that clearly will happen and is happening to some degree already. It's just the agent filling out the forms for you. I think where you get this interesting question is, and when people hear agentic commerce, I think their mind jumps to the agent actually having some autonomy and doing some decision

9:07making for you. I think there the problem is people somehow jump to the examples. Anyone who talks about this phenomenon, they pick terrible examples. They're like, oh, the agent will book, you know, all the activities on your vacation for you. It's like people think about, they daydream about their vacation all year. Yeah, that's the fun part. Researching and booking is the fun part. That's the fun part. Or similarly with women's fashion, it's like the whole point is the scrolling, not just the buying. And so people pick these, you know, super enjoy,

9:37like it's the robots taking the jobs and people want to keep those scrolling jobs. And so when you think about robots having autonomy, I would instead proffer some examples where you really don't need to be. You give the AI a recipe and say, buy the things that we need to make this tonight. And yeah, the AI can probably guess that you have salt and you have garlic at home, but you need the ground pork. Or again, then migrating to the B2B example, no one needs to configure yet another domain and go through all those forms.

10:08If CloudCode can work with Cloudflare to buy the domain for you and set it up, I think Joe will be much happier and not feel like he's missed out on a valuable life experience.

B2C Agentic Commerce

10:17I want to talk more about the B2B stuff, but let's for a moment stick around on the B2C element because I think there are gradations of this. So one is just another elimination of the friction layer. At the far end of the spectrum, conceivably, there will be things where the AI truly does anticipatory buy you things that you didn't know you need, et cetera. And then there might be like some middle. I saw this screenshot recently and I couldn't find it before the episode. Someone tweeted it, but some retailer, I think it was a shoe retailer,

10:48had put a bunch of shoes on their website, but instead of like putting any brand names on the shoe, like we would say like a Nike Pegasus or a Nike Air Jordan, all of the shoes were like hiking boot that's good for semi-serious hiker. Do you see this currently, currently where we are on the agentic commerce trajectory, do you see this currently where there's already a change in how retailers are presenting or displaying or promoting their wares such that they're more attuned

11:20for what the chatbot would identify or the AI would identify as cool versus what a human influenced by brands would pick up as cool? Yes and no. Oh, I mean, there's definitely changes. I think some of the stuff that's most notable is often not the most relevant. It's a little bit, it sounds like what you're describing is a little bit like the Thai restaurant called Thai food near me to do best in the SEO. But I think what we see as kind of maybe a more interesting direction of travel is again, what's happening already. Some amount of

11:50the form fields being filled out for you and kind of the friction reduction and a huge amount of, again, I presume you guys have both done this, is research in AI apps. And, you know, the way I would frame that is just keyword search is ridiculous. It's ridiculous that we got to the year 2026 relying on keyword search where that makes sense for buying a book or a DVD where you know the title of the book or DVD that you're trying to buy. But that's about the limit of keyword search. And so the fact that anyone was trying to buy furniture or clothes or anything like that

12:21and there was this text box at the top of the website where you put in your keywords, it's like, that's just, that's not how anyone shops in the real world, things like that. And so we're seeing this AI powered research where people can explore a product space and start to give constraints. And you have this textual search interface, but you end up with kind of much higher quality search where it's like, okay, I have a spot in this room where I'm looking for a piece of furniture that's this wide max and this high because I need to fit it in there. That's the kind of thing

12:52that's just much better suited to the AI modality. So you see different kinds of product research possible. And like we said, it's very helpful to smaller brands because people aren't necessarily stuck behind the traditional aggregators anymore. They can break out. And again, I have found in my little research projects that I've done, you often get these small brands surfaced that you mightn't have heard of before. And so we think it's actually probably quite good for the dynamism. Well, let me ask Joe's question in a slightly different way, which is if we assume that in the future, if I'm a business

13:23selling something online, previously I was selling to humans more or less, like maybe I'd optimize for Google search results or whatever, but like mostly I'm trying to appeal to humans. And now I'm trying to appeal more to agents. What is optimizing for agents actually look like?

13:42Part of it is similar to traditional SEO, right? So you want to be legible to those agents. You want to be discovered by them. But part of what at least I've seen is that the AIs have pretty good taste. Joe, I don't know if you found this in your vibe coding. By the way, Joe, I'm reminded of it. It's sort of like the old joke, how do you know if someone vibe codes? They tell you about it. Exactly.

14:07Guilty, guilty, guilty. I'm guessing you found that the AIs are very tasteful at picking libraries and picking specific subcomponents to use. And similarly, in our kind of early experience of the agentic commerce, they're quite tasteful in finding tools that suit the job pretty well. And so I think you may get this more efficient market phenomenon where at least in picking coding libraries or something like that, the AIs have, like I find when I do stuff, they're discovering libraries that are perfect for the job that I hadn't even heard of

14:38or something like that. I think you're starting to see the same phenomenon with products where again, I have had the experience of, you know, I was trying to find a travel adapter and I found it from this tiny company that I had never heard of but it's doing exactly what I want where it's like an integrated travel adapter and power brick. It's really good and I would never have come across that company otherwise. This is incredibly important because as I mentioned in the beginning, advertising creates culture. It's part of culture, especially iconic advertising and maybe it'll be a little while before the Nikes of the world, the Nikes

15:08and Apples of the world, they're going to be advertising for a long time. But do you see this eventually as sort of like one of the things I think that the internet appreciates about Stripe as a company is you and your brother's commitment to interesting discussions of economics and so forth and you talk about econ history. There are great debates about whether ad spending is a huge deadweight loss on the economy or whether it's something positive, et cetera. And I'm curious, could you see a sort of post-advertising future, you know,

15:39at some point on the horizon? No, I think we're quite skeptical of that for two reasons. One, again, with agentic commerce, we don't think the human goes away and the human in the loop goes away. And there's a huge amount of agentic commerce that can happen like we're describing where you still have the human as the end decider. And so it will likely be the case that if you are searching for something, if you have a new microphone for the Adlots studio, you might ask it to go research and it'll present

16:09three or four different options with different trade-offs. There's no right microphone that's going to be kind of cost trade-off and things like that. And then ultimately you will make a call and it'll go buy it for you. And when you make that call, some brand preference you have, oh, sure, I just know that they're like the ones with the really good sound quality. Not clear why you have that association. Maybe there's some advertising in there somewhere. But so we think brand preference and as part of that advertising will clearly stick around because again, it's definitely not going to be the case that agent of commerce

16:39means no humans make buying decisions. That's absolutely not our case. But again, this may be a good example. You want to buy new microphones for the studio. You do a lot of AI research. You then have a human decide and then you do a lot of AI execution. And so it's AI on both sides and then human decision making in the middle. Brand affinity really matters in that world. The other thing, of course, is commerce can be directed or undirected. Prayer, in the directed side, like I was saying, I'm trying to buy a bike case. It's like, this is a thing that I know I need to go do. I'm going to go do some research. Previously, you know, a Google ad might have been relevant to me,

17:10whereas now it's what appears in the AI search results. Obviously, that does remove some advertising, but for now, at least, maybe some of the AI apps at least choose to bring back some advertising in those cases. But then a lot of shopping is undirected where you're scrolling Instagram and the joke goes that these days on Instagram, the ads are better than the organic content because they've gotten so good with the targeting and there's nice reassuring things that you might want to buy. And there, that is advertising and people are going to stay scrolling social apps and finding cool products they want to buy. So I wouldn't be short

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Machine Readability

20:12You mentioned machine readability earlier. Talk to us about the actual process of converting your catalog into something that an agent can actually read and how standardized that is at the moment and how standardized do you expect it to be in the future? And then also, like, if you're standardizing for machine readability, I feel like it's difficult to capture some of what might make a product interesting. It's difficult to, like, code the actual vibes of a product. Even with LLMs,

20:44I just find there's something difficult to capture. So talk to us about how you make it so that agents fully understand what is available to them. Yeah, so there's two levels here. The first is just being known in the same way that you'd be known to humans because, obviously, all the LLMs have read the whole internet. That's what they're trained on and they can do web searches. And so if you have good product pages that are informative and lay out the details of what the product does, if you have reviews,

21:15you know, if there's, like, a bunch of Wirecutter reviews, things like that, you've probably seen this in research searches where, you know, the AI app will say, you know, people love this product and they say XYZ, but they've read the whole internet. And so being known, you know, I'm a big deal on the internet helps with the AI apps as it does for humans. That's kind of step one. Step two, and where Stripe gets more involved is you need a lot of the mechanical wiring up so that the AIs can do stuff that are more programmatic. And this is where our agent of Commerce Suite that we, you know, had an announcement about and this is what we're working on with Google and Microsoft

21:46and Meta and, you know, OpenAI and all those folks to actually do some of the commerce wiring up. And there I'd say it's two things. One is you need a machine compatible way to get the very latest information about the product details. So it's one thing for the AI to have in its training run maybe a year ago, read the whole internet and know that this product is good. You need to be able to tell the AI is it still on sale, what SKUs are in stock, which sizes we have right now

22:16and things like that. And so that kind of up-to-date being able to make real-time calls to the seller so that the AI has fresh, correct information that it can present. That's thing one. And then thing two is wiring up the agentic checkout so the AI can actually buy it. And here you get into a bunch of boring like payments details, but for example, you want the customer to be able to buy a safe credit card, but you don't want to be... You're not allowed to describe details as boring on AdLots. On AdLots, there's no such thing that was the boring details podcast. Yeah, so start...

22:47Yeah, keep going. Start. Okay, so then for actually kind of handling a three-way transaction where there's you in ChatGPT buying a product from this merchant or something like that, we're facilitating that transaction and there you want to be... You don't want to be re-entering your payment details on each website. At the same time, you don't want to be flinging your payment details around across different websites. And so we've built all the wiring up and also don't forget a lot of websites have historically... Bots used to be a bad thing. They used to discriminate against bots. They would have bot protections and things like that. Whereas now it's like,

23:18okay, no, we actually want agents to be able to do this. And so you're unwinding some of the bot protections and having a little TSA pre for the bots that we work with a way to kind of securely transfer a one-time use payment credential and things like this. There's a lot of wiring up beneath the scenes that businesses have to do. This is actually maybe like a good spot to slightly seg over into the B2B element of agentic commerce because this gets to another thing that I think about. You know, I know one of the things that available training data is literally just looking

23:49at user mouse behavior, right? Because then theoretically the AI model can go to a website and click the buttons just the way a human wants. But it all, it seems silly to me. Like ultimately, if we're building a human, if we're building websites for human use and then a bot's going to actually scrape them, why not just actually build it for bots in the first place? What are we seeing there? What are you seeing from retailers