PayPal and Google team up to bring AI-powered shopping and payments

PayPal and Google have entered a new partnership to reshape online shopping and payments. On Wednesday, the companies announced a deal they described as opening a new chapter in digital commerce driven by artificial intelligence.

The collaboration will integrate PayPal checkouts into multiple Google services, such as Google Cloud, Google Ads, and Google Play. PayPal will also handle card processing for Google’s enterprise offerings, so merchants and users can access new forms of payments across Google’s ecosystem.

AI agents transform online shopping

At the core of the PayPal–Google debate is an audacious new vision for shopping that enables bots to buy stuff on people’s behalf. This vision is supported by Google’s Agent Payments Protocol, or AP2, a framework system that defines the rules and protections of autonomous transactions.

AP2 is designed to support AI agents in making decisions on behalf of consumers, while preventing them from falling victim to fraud and loss of control. It depends on “mandates”, digital authorizations that lay out what an AI assistant has the power to do.

A mandate could limit weekly spending, authorize only certain purchases like groceries or travel, or require extra verification for high-value items. This way, even though agents act independently, users still retain full control over their money.

With AP2 in place, AI agents would go far beyond today’s shopping assistants. Instead of simply scanning shelves, comparing prices, and predicting needs, they could take proactive action.

For example, an agent might reorder household essentials before supplies run out, pick a shirt in the right size and style, or schedule a service appointment before the customer even realizes it’s needed. In more complex scenarios, agents could even manage subscriptions, handle investments, or direct funds into digital assets.

PayPal’s role is to give AI agents a trusted platform, combining its global payments network and customer insights to strengthen security and personalize recommendations. Chriss said the integration added immediate weight to AP2 through PayPal’s large customer base and established reputation, a signal to merchants and shoppers that the system could be trusted.

It also contributes to recognizing a new genre of commerce that we call “agentic commerce” at present. In models like this, humans act as a reference and handle boundary issues — they are expected to be the ones to specify their preferences. Meanwhile, AI bothers to take care of the pain in our neck, esp. browsing, comparing, and purchasing.

Supporters say this could save time and eliminate friction, causing the shopping experience to become easier and less painful. But critics caution that it leaves unanswered questions about privacy, overreliance on automation in handling people’s money, and whether consumers might lose touch with how their money is spent.

Partnership expands payment options

For Google, the partnership is about faster and more reliable payment processing. For PayPal, it’s a way to entrench itself in the world’s largest online marketplaces.

PayPal itself is also broadening its embrace of cryptocurrencies. The company envisions a future where AI-driven agents shop for and make payments on users’ behalf, using both fiat and digital currencies.

PayPal chief executive Alex Chriss said the partnership was about building the future of commerce, adding that it would be both agentic and crypto-enabled.

Google chief executive Sundar Pichai said the partnership brought together trust and innovation, noting that PayPal would use Google’s AI to deliver personalized, seamless customer experiences while relying on Google Cloud to drive innovation and business growth.

AI startup Perplexity, only a few months ago, announced that PayPal would be its choice to fuel agentic commerce on its platform. These initiatives show that PayPal is trying to take a lead position in this new, AI-influenced shopping world.

Analysts say the partnership could speed a broader shift in global e-commerce. Instead of shopping by browsing for, clicking on, and purchasing items themselves, consumers will soon be able to delegate the entire purchase journey to AI assistants.

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