Key Takeaways:
- Google has unveiled the Universal Commerce Protocol (UCP), an open standard that enables agents and systems to work together for seamless commerce experiences.
- UCP will allow consumers to purchase products from retailers directly through Google’s AI Mode in the browser or the Gemini app.
- The protocol will initially use saved payment information from Google Wallet, with PayPal integration coming in the future.
- Retailers such as Shopify, Etsy, Wayfair, Target, and Walmart have co-developed the protocol, which aims to provide a common language for agents and systems to work together.
- The UCP has been endorsed by payment companies such as Adyen, American Express, Stripe, MasterCard, and Visa.
Introduction to Universal Commerce Protocol
The National Retail Federation’s annual conference in New York was the stage for Google’s unveiling of the Universal Commerce Protocol (UCP), an open standard that establishes a common language for agents and systems to work together. As Vidhya Srinivasan, vice president and general manager of Google Ads & Commerce, stated, "Instead of requiring unique connections for every individual agent, UCP enables all agents to interact easily." This protocol is set to revolutionize the way consumers purchase products online, allowing them to make purchases directly through Google’s AI Mode in the browser or the Gemini app.
How UCP Works
The Universal Commerce Protocol will initially use saved payment information from Google Wallet, with support for PayPal payments coming in the future. This means that consumers will be able to seamlessly make purchases without having to enter their payment information every time. As Google plans to roll out additional features such as related product recommendations, loyalty and rewards, and custom shopping experiences on Google in the coming months, retailers will remain the merchant of record. According to Richard Crone, CEO of Crone Consulting, "The product detail pages are the fuel that they need to feed their agentic commerce engine." This highlights the importance of retailers making their inventory discoverable by agents.
Industry Collaboration
The development of the Universal Commerce Protocol was a collaborative effort between Google and several retailers, including Shopify, Etsy, Wayfair, Target, and Walmart. As Vanessa Lee, Shopify Vice President, stated, "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." Walmart, in particular, has been actively involved in the development of the protocol, with John Furner, President and CEO of Walmart U.S., stating, "The transition from traditional web or app search to agent-led commerce represents the next great evolution in retail. We aren’t just watching the shift, we are driving it."
Payment Company Endorsements
The Universal Commerce Protocol has received endorsements from several payment companies, including Adyen, American Express, Stripe, MasterCard, and Visa. As Pablo Fourez, chief digital officer at Mastercard, stated, "Open, interoperable protocols are the spark for agentic commerce. As this ecosystem evolves, Mastercard is leaning in with the industry to advance protocols that embed trust, security, and responsibility from day one." This support from payment companies is crucial for the success of the UCP, as it will help to establish trust and security in the agentic commerce ecosystem.
Challenges and Opportunities
While the Universal Commerce Protocol offers many opportunities for retailers and consumers, it also presents some challenges. As Richard Crone noted, "That whole concept of driving the customer outside of the merchant’s control has unprecedented disintermediation costs and channel conflict risk." This means that retailers may lose the last touch point with their customers, which can account for 33% to 76% of upsell and cross-sell opportunities. However, the UCP also provides retailers with the opportunity to increase sales and discoverability by supplying their product data to Gemini and Shopify for off-site sales.
Conclusion
The Universal Commerce Protocol is a significant development in the world of e-commerce, offering a common language for agents and systems to work together. With the support of retailers and payment companies, the UCP has the potential to revolutionize the way consumers purchase products online. As Google continues to roll out additional features and support for the protocol, it will be interesting to see how the e-commerce landscape evolves in the coming months. As Vidhya Srinivasan stated, "UCP enables all agents to interact easily," and it will be exciting to see the opportunities and challenges that this new protocol presents.
https://www.americanbanker.com/payments/news/google-shopify-unveil-new-agentic-protocol-for-retailers