This week’s Today in Payments dives into how AI is reshaping the holiday shopping experience, with PayPal launching new integrations with Mastercard and ChatGPT to power agentic commerce. New surveys reveal record-high consumer interest in gift cards, growing use of BNPL, and rising reliance on AI for finding deals and comparing products. Meanwhile, Zelle is going global—using stablecoins to expand its peer-to-peer payments network across borders while maintaining its focus on security and speed.
Welcome to Today in Payments, I’m your host, Patti Murphy, here with your weekly dose of payments notes.
The Strawhecker Group (TSG) and the ETA have released their 6th annual Consumer Holiday Spending Survey. In addition to questions about holiday budgets, consumers were also asked about their use of emerging payment technologies.
Key takeaways for acquirers, processors, and their sales partners include:
Customize solutions to merchant needs—which often vary by geography.
Urban shoppers are more interested in new technologies such as tap-to-pay, digital wallets, and buy now, pay later (BNPL), though this may require additional merchant education.
In contrast, merchants in rural areas—especially smaller ones—benefit more from loyalty solutions.
Small business loyalty remains strong.
54% of rural consumers say they prefer shopping at small businesses whenever possible.
Security matters.
One in three consumers said they would feel more comfortable using newer payment technologies if they believed they were more secure than traditional methods.
Three in ten said clarity in terms and conditions would also increase their comfort level.
Holiday spending is holding steady.
Roughly half of consumers plan to spend about the same on gifts as last year, while 15% say they’ll spend more.
Half plan to spend over $500—up from 39% last year.
Payment preferences influence where people shop.
48% of consumers say they try to stay loyal to small businesses, and 38% say they’d be more likely to shop with a small business if it offered their preferred payment and checkout options.
PayPal also released its 2025 Holiday Shopping Survey, revealing that 77% of consumers plan to use AI tools to assist with their holiday shopping. Most consumers are using AI for product discovery:
34% to find the best deals
30% to compare products
26% for gift ideas or recommendations
The report also found that BNPL has gone mainstream, with half of consumers planning to use it this holiday season.
And while e-commerce remains strong, in-store shopping is making a comeback:
64% of consumers said they plan to shop in-store this year, and 41% plan to shop both in-store and online.
Speaking of PayPal, the payments giant made waves this week with two major AI announcements.
First, it announced a partnership with Mastercard to integrate Mastercard Agent Pay, the card brand’s agentic payments platform, into the PayPal wallet. Agent Pay leverages tokenization—the same technology behind mobile contactless payments and secure card-on-file experiences—to deliver personalized, secure transactions.
The move highlights the rise of “agentic commerce,” where AI agents act on behalf of consumers to find and purchase products automatically.
Second, PayPal revealed a partnership with OpenAI, allowing ChatGPT users to make purchases directly through the PayPal platform. This integration positions ChatGPT not just as a tool for information, but as a fully transactional platform—allowing consumers to complete purchases without ever leaving the chat window.
For merchants, it means access to ChatGPT’s massive weekly user base of over 800 million people.
As I covered earlier this year in Green Sheet, agentic commerce presents enormous opportunities for ISOs and agents. My friend and industry expert Richard Crone estimates the space could generate an $850 million uplift in future revenues. New revenue streams may include tokenizing SKU-level content, attaching manufacturer-funded offers, and enforcing least-cost routing before the AI agent completes the transaction.
Early Warning Services, the bank consortium behind Zelle, is taking the P2P network global—using stablecoins to support faster, more reliable cross-border payments.
Stablecoins, which are pegged to fiat currencies like the U.S. dollar or euro, are now the most widely traded form of digital currency. According to blockchain analytics firm Artemis, the supply of stablecoins has skyrocketed to $300 billion, up from just under $10 billion five years ago. In August alone, $122 billion in stablecoin payments were settled.
Early Warning’s plan is to offer international stablecoin transfers to all Zelle-participating financial institutions. That includes the seven big banks that own the consortium, plus more than 2,300 U.S. banks and credit unions already offering Zelle.
The expansion announcement comes as Zelle reports record growth:
2 billion payments sent in the first half of 2025
$600 billion in total dollar volume—a 23% increase from the same period last year
180 million payments to small businesses, a 31% increase year over year
Early Warning also emphasized its continued focus on fraud prevention, stating that just 0.02% of all Zelle transactions result in a reported fraud or scam.
That’s all for Today in Payments. Stay tuned for your weekly dose of payments notes.