US giants dominate AI payments race amid Wall Street jitters
US giants continue to lead the charge in the payments industry’s AI acceleration even as the sector gets swept up in Wall Street’s tech jitters.
Visa led a three-horse race followed by Mastercard, then Paypal in the Evident AI’s inaugural index for the payments sector.
The three towered above their peers, thanks largely to consistently high-ranking performance across Evident’s four pillars of maturing AI: talent, innovation, leadership and transparency.
“Companies who invested early – like Visa and Mastercard – have gained a clear advantage over their peers, both in AI capabilities and the value their deployments are realising,” said Alexandra Mousavizadeh, co-founder and co-chief executive of Evident.
The report pointed to Visa storming ahead after a handful of large, multi-year deployments that centred on the security of its ecosystem. Meanwhile, Mastercard was hailed for its use cases in fraud detection.
Greg Ulrich, chief data and AI officer at Mastercard, previously told CityAM the payments network is “attacked perpetually” by fraudsters.
As attackers leveraged new tech to advance attacks, Ulrich said the threats were “keeping us on our toes”.
Still, the bullish AI sentiment hasn’t saved either of the payments giants from being swept up in a number of Wall Street’s major sell-offs in the last year.
Shares in Mastercard sank beneath $500 after a six per cent plunge on Tuesday following a bleak research note that suggested unemployment could rise to 10.2 per cent amid AI-fueled layoffs. Visa also slid around 4.5 per cent following the report.
The firms typically serve as bellwether’s for consumer spending and sentiment, but as investors looked to slash their exposure to any stock that could face a margin squeeze amid the AI narrative, Visa and Mastercard were caught in the crossfire.
UK questions payments sovereignty
American Express and Stripe came in fourth and fifth place on the ranking. None of the 12 firms analysed on the ranking came from the UK.
Mastercard and Visa – along with fintech juggernaut Revolut – have come under fresh pressure in the UK after losing a legal battle against the watchdog over its plans to introduce a cap on card fees for overseas transactions.
The payment firms brought a judicial review to the High Court following a decision by the Payment Systems Regulator (PSR) in December 2024, confirming that it would consult on the fees cap.
These fees, which banks charge retailers to process payments, surged fivefold following the UK’s departure from the European Union, rising from 0.2 per cent to 1.15 per cent for debit cards and 0.3 per cent to 1.5 per cent for credit cards.
The payments watchdog had previously said fees were rising to an “unduly high level,” whilst firms have hit back, claiming the PSR did not have the power to introduce a cap.
The saga spiked questions around the sovereignty of the European payments ecosystem, with US giants holding the power to hike costs for firms.
Over the last month, UK bank bosses are said to have held a meeting to establish an alternative to Visa and Mastercard, amid growing fears around sovereignty and the power President Donald Trump has to turn off US-owned payments system.
The meeting – as reported by The Guardian – comes after the Payments System Regulator revealed around 95 per cent of UK card transactions are made using systems owned by Mastercard or Visa.