Almost half of the UK’s top retailers are already investing in “agentic AI” to revolutionise their payment systems, yet only a small fraction possess the infrastructure or contractual frameworks to support it safely, according to new research.
The Retail Agility Report from law firm TLT, which surveyed the top 100 UK retailers, reveals a sector in the midst of a rapid technological shift. While 49 per cent of retailers are pouring capital into agentic AI—autonomous systems capable of executing tasks like replenishment and payment selection—just 15 per cent believe their payment contracts are ready for AI-mediated transactions.
The rise of autonomous payments
The report highlights that retailers are moving beyond simple automation toward more complex, autonomous use cases. Approximately 29 per cent of those surveyed are investing in a combination of agentic AI and loyalty-linked payments, while 20 per cent are focusing exclusively on agentic AI.
Early applications of this technology include autonomous stock replenishment, dynamic pricing, and AI-driven selection of payment methods to optimise costs or customer preference. However, this innovation is outpacing governance. Nearly half of the retailers surveyed admitted they are unclear about where liability lies when an AI agent makes a payment or purchasing decision—a critical blind spot for fraud teams and financial institutions.
BNPL and digital wallets dominate
Beyond AI, the research points to a broader diversification in payment methods as retailers try to reduce friction at checkout.
- Digital wallets remain the top priority, with 50 per cent of retailers investing in the technology.
- Buy Now Pay Later (BNPL) continues to surge, prioritised by 45 per cent of respondents, particularly in the fashion and beauty sectors where flexibility drives conversion.
- Open Banking adoption remains fragmented; while 25 per cent are piloting solutions and 32 per cent plan to adopt them, only 15 per cent have fully integrated Open Banking into their stacks.
In contrast, enthusiasm for crypto and blockchain payments remains low, with only 10 per cent of retailers prioritising these methods.
The ‘innovation gap’
The speed of adoption has created what the report describes as an “innovation gap,” where technical capability exceeds regulatory certainty. A significant 70 per cent of retailers cited evolving regulation as a major challenge.
Specific concerns include incoming BNPL rules, guidance on AI-driven transactions, and obligations under the Data Use and Access Act (DUAA), which is set to underpin the UK’s Open Finance framework.
Alex Williamson, partner, payments at TLT, warned that success will depend on closing the gap between innovation and governance.
“Digital wallets, BNPL, embedded finance and AI are reshaping consumer expectations but only 15% of retailers feel they have contracts fit for these technologies, and liability around AI-enabled transactions remains unclear for most,” Williamson said. “Success will depend on deep collaboration between retailers, PSPs, banks and FinTechs.”.
As commerce becomes more autonomous, fraud detection is also becoming a battleground. The report notes that 29 per cent of retailers plan to deploy AI-based fraud detection to distinguish between legitimate agent-driven transactions and malicious bots. This will require systems capable of real-time behavioural analysis that can parse both human and machine purchasing patterns.