From fighting fraud to fueling personalization, AI at scale is redefining how commerce works online

This article was first published in Business Insider.

• The global digital payments market is continuing to experience intense growth.

• AI-integrated payments technology will be indispensable in the next wave of digital commerce.

• Companies are now prioritizing AI efforts to deliver both improved fraud detection as well as greater customer value.

Data and real-time intelligence are critical for every business. In banking alone, three-quarters of financial institutions are investing in new technology to meet customer needs, and 90% prioritize technology that makes transactions faster and more accurate. But without systems to intelligently harness the resulting data flows, organizations risk information overload.

At the same time, the total transaction value of the global digital payments market is expected to reach $20 trillion in 2025, intensifying the need for smarter, safer transaction management. One solution is to combine this data with AI to unlock new customer value, create efficiencies and insights, as well as better safeguard commercial transactions. Companies that are lagging in the AI transition often struggle to know where to direct their efforts or are discouraged by the difficulty of deploying AI at scale in ways that are effective and secure. However, leading companies provide an example they can learn from.

Some of the companies leading the AI transition have spent decades tackling these challenges and have successfully embedded AI into their operations to tackle fraud, personalize customer experience, and guide responsible innovation. One prominent example is Mastercard, which uses AI to secure over 159 billion transactions annually and prevent billions of dollars in fraud losses.

"At Mastercard, we're harnessing the power of AI to make commerce smarter, safer, and more personal — whether through real-time insights, advanced fraud detection, or enhanced personalization," said Matthew Driver, executive vice president of Services for Asia Pacific at Mastercard. "The rapid pace of digitization, combined with breakthroughs in AI and compute, is unlocking innovation at scale. But innovation must be grounded in responsibility. That's why we embed transparency, accountability, and ethical design into every AI solution — ensuring trust in the digital economy, for everyone, everywhere."

Securing transactions at scale

Fraud is escalating in complexity, but AI is proving to be an indispensable line of defense. Using real-time analytics, AI platforms can scan more than a trillion data points, helping financial institutions score billions of transactions annually. By embedding generative AI, these tools have seen fraud detection rates improve by as much as 300% in some models.

This approach, where AI is tightly integrated with transaction infrastructure, demonstrates how fraud prevention can be both fast and scalable. For example, Mastercard's AI platform is now trusted by 74 of the top 100 US banks and over 2,000 clients globally. Like similar systems, it acts as an "invisible shield" against fraud, enabling transaction monitoring on a scale that would be impossible through manual intervention alone.

Elsewhere, intelligent retry systems now help merchants respond to the estimated 22% of online payments that are wrongly declined. By analyzing network behavior, these systems can recommend the optimal time to retry a transaction, improving approval rates and reducing consumer friction.

Across commerce, AI is also being applied to areas such as cybersecurity threat detection and supply-chain resilience, expanding its role beyond payments alone.

AI-powered customer experiences

Intelligent systems are also improving customer experiences in other ways. From retail to banking, companies are deploying conversational AI tools that translate natural language into tailored product recommendations, mimicking the intuitiveness of in-store interactions.

One such tool from Mastercard, Shopping Muse, allows consumers to search retail inventories using phrases like "beach formal" or "dress shirts." Drawing on behavioral data and contextual cues, the platform delivers hyper-personalized results and deepens customer engagement. Mastercard has also introduced Agent Pay, a pioneering agentic payments technology that integrates with agentic AI to revolutionize commerce. Agent Pay delivers smarter, more secure, and more personalized payment experiences to consumers, merchants, and issuers.

Reflecting the importance of diverse perspectives, Mastercard has established a global network of AI Centers in the US, Canada, India, and the UAE. This broad R&D footprint helps advance AI use cases in commerce while drawing on a wide range of talent and ideas.

To manage innovation at scale, some organizations are introducing structured intake systems to gather and assess AI use cases across the business. These can run into the hundreds, so cutting-edge businesses prioritize those that align with enterprise goals and deliver measurable business value.

Scaling AI responsibly

With greater capability comes a need for stronger oversight. Leading adopters of AI, particularly in sensitive areas such as payments, have introduced governance frameworks prioritizing privacy, transparency, accountability, and fairness. These are often sponsored by senior leadership and result in clear commitments around individual data ownership, control, benefit, and protection.

In addition to internal controls, companies are increasingly working with public bodies to shape responsible AI standards. Mastercard's 2023 partnership with the UAE government to accelerate national AI adoption is one such example and demonstrates the value of aligning commercial innovation with public policy.

As organizations grapple with data sprawl, regulatory pressure, and rising consumer expectations, those with clear AI strategies are gaining ground. Their experience shows that AI works best when embedded into core processes, supported by robust infrastructure, and governed with care.

The next phase of digital commerce will be led by those who can combine innovation with trust and ensure their AI capabilities enhance not only performance, but also the human experience. Business leaders would do well to identify high-impact use cases, invest in scalable infrastructure, and foster internal expertise to keep pace with the technology's rapid evolution.

Mastercard's experience demonstrates how embedding AI thoughtfully can help organizations navigate this shift by building faster, smarter, and more personalized commerce and by enshrining privacy by design at the core, ensuring a safer, more secure and trusted digital economy for everyone.