PayPal To Become Key Payment Option In Google’s New AI-Driven Checkout
PayPal has confirmed it will integrate with Google’s Universal Commerce Protocol (UCP), an AI-powered framework designed to streamline interactions between consumers, retailers, and payment providers.
The company will soon appear as a payment choice within Google’s new checkout system, according to a press statement released over the weekend.
How Will UCP Change Online Shopping
Google unveiled UCP during the National Retail Federation’s annual convention in New York, positioning it as an open, agentic commerce standard.
The protocol is designed to allow AI systems to assist with product discovery, checkout, and post-purchase support while enabling merchants and payment providers to interact seamlessly.
Vidhya Srinivasan, vice president and general manager of Google Ads & Commerce, explained:
“Instead of requiring unique connections for every individual agent, UCP enables all agents to interact easily.”
The protocol is platform-agnostic, aiming to reduce one-off integrations and support multiple credential providers.
UCP builds on Google’s previous agentic commerce protocols, including Agent Payments Protocol (AP2), Agent2Agent, and Model Context Protocol (MCP), and the company plans to expand its capabilities with loyalty programs, personalised recommendations, and tailored shopping experiences.
Why PayPal Is Joining UCP
PayPal executives described the protocol as a way to remove barriers that have limited agentic commerce adoption.
Prakhar Mehrotra, SVP and Head of AI at PayPal, said:
“Protocols like UCP turn agentic commerce into something merchants can actually adopt at scale. Interoperability is what allows retailers to connect at once and reach many environments, while maintaining trust, transparency, and control.”
Michelle Gill, general manager of small business and financial services at PayPal, added:
“The next generation of commerce will be defined by how well we build open, trusted infrastructure that serves everyone. Supporting and collaborating with Google on UCP shows how a trusted payments experience layer makes agentic commerce a reality for consumers.”
PayPal has long acted as a reliable infrastructure layer for online payments, connecting hundreds of millions of consumers and tens of millions of merchants globally, while offering fraud protection and buyer-seller safeguards.
The company believes these foundations will be increasingly important as AI agents take on larger roles in shopping.
Who Helped Build UCP
UCP was developed with input from major retailers and e-commerce platforms, including Shopify, Etsy, Wayfair, Target, and Walmart.
Vanessa Lee, vice president at Shopify, highlighted the company’s experience in building large-scale checkout systems:
“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.”
Some analysts caution that agentic commerce may not succeed without active coordination between consumers, merchants, and payment providers.
Richard Crone, CEO of Crone Consulting, warned that if checkouts move off merchant sites, “the merchant loses the last touch point…The product detail pages are the fuel that they need to feed their agentic commerce engine.”
PayPal Expands Its European Presence
Alongside its UCP integration, PayPal has participated in a €12 million Series A funding round for Amsterdam-based payments firm Klearly, bringing the company’s total funding to €20 million.
Klearly serves over 4,000 merchants and plans to expand deeper into Italy and Belgium.
In the United States, PayPal has strengthened its physical presence in New York City with a 10-year lease covering 261,000 square feet at 345 Hudson Street and 555 Greenwich Street in Hudson Square, near Google and Disney offices.
345 Hudson Street (left) and 555 Greenwich Street (right) in Hudson Square
Will UCP Redefine Commerce Infrastructure
PayPal sees UCP as a chance to enhance trust and efficiency in the emerging agentic commerce landscape.
Ashish Gupta, VP/GM of Merchant Shopping at Google, stated:
“For agentic commerce to scale, it’s critical for the industry to align on a common set of standards. We are proud to have PayPal endorse the Universal Commerce Protocol as the foundation for that future.”
With the new integration, AI-driven shopping experiences could become more seamless, giving consumers smarter product suggestions while allowing merchants and payment providers to maintain oversight and reliability.