Agent transactions need authorization and liability rules

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 32:47

   So, I mean, this is exactly what these open standards are solving for. So let's take an example where I instruct my agent. In fact, this is a real example. I was looking for a hotel for a trip we're making for my daughter's gymnastics tournament. And I said, go and find a hotel in San Diego and don't spend more than, you know, $500. So the first question when that agent is provisioned is to your question is like, is this a real card?

2. 33:16

   That's a sole problem. The second one is, is the request for the agent a valid request? And the way that this works with the networks is that agent actually has to be registered with Visa or MasterCard or Amex. And so there's a whole sort of mechanism there. The third question is like, is the agent of sound mind? Like, did it get it right? Was it drunk? You know, exactly. Did it hallucinate? And so that part, I don't think we fully understand yet, because if there's a mistake that the agent makes and the cart network did everything right, they validated that this is your agent and your instruction.

3. 33:56

   In fact, part of the way these new standards work is you give it context. You say, I'm buying a hotel, this is a hotel reservation at this amount. It's hard for me to know if you got the actual dates right. If there's an error there, then that dispute mechanism is sort of unresolved. But I think we will get to that point, and probably the agents will have to take on some responsibility. Well, it's this idea of delegated authority.

4. 34:23

   Yeah. But it's how do you, like, who is liable? How does this change? I mean, it might be something where if two agents are competing for your business, like, hey, Terry, please use me. I'm Muse, or please use me. I'm Instinct. What is one of the value adds that I'm going to give you? I will take on because if the merchants are smart they're not going to be like I don't give a crap that like you got the wrong hotel room or you did this it's like you told you gave your card you delegated authority to either an AI agent or your human assistant or your wife or whatever like it I don't care I need to know if I'm accepting payments for something that there's no excuse at the end I mean this was called for uh for those that know this term friendly fraud once upon a time, there's this concept of I can buy something. We used to see this at Trial Pit. I spent $10,000

5. 35:13

   on virtual gems. My wife and I share the, I didn't actually do this just for disclosure, but let's just say I did. I spent $10,000 on virtual gems for some stupid game. The credit card bill comes due at the end of the month. I'm like, honey, I never spent $10,000. That wasn't me. I don't know. And you refuse the transaction, not because you didn't get the service that was offered but because it's so embarrassingly terrible and merchants had to deal with this all the time and in many cases like the the the banks would say well if it's a ten dollar transaction it's not even worth fighting it we'll just give it to the consumer every time which created moral hazard but delegated authority gets really tricky here i mean maybe if i can ask a different question because this is probably the more important one um you saw that amazon recently

6. 35:58

   blocked Muse.