Mastercard Says the Checkout Revolution Will Be Optimized … by AI

Digital commerce is growing at a staggering pace. Online transactions have more than doubled over the past four years, placing a new urgency on ensuring seamless checkouts.

For businesses, checkout is where revenue is won or lost. For customers, it’s where experience defines loyalty. Yet checkout remains a hotspot for friction, abandoned carts and dissatisfied users.

PYMNTS sat down with Sumeet Bhatt, senior vice president, digital solution optimizations, at Mastercard; and Sherri Haymond, co-president, global partnerships at Mastercard, to hear about how artificial intelligence (AI) isn’t just refining the payment process — it is reimagining it, and turning one of eCommerce’s thorniest pain points into a streamlined, strategic advantage.

“AI and real-time enriched data represent a leap forward for the payment industry,” Haymond said, highlighting the technology’s promise to enhance approval rates and transform the customer experience.

With AI, vast datasets can be analyzed in seconds to recommend the most relevant payment options for each customer’s checkout journey, reducing errors and optimizing transaction routing.

For merchants, the stakes are high: Over 42% of consumers report they won’t return to a merchant after a failed transaction. This fallout underscores how false declines or cumbersome payment processes can damage customer relationships and bottom lines.

Solving the Checkout Conundrum

While digital marketplaces and online commerce platforms offer convenience, they also introduce significant complexities. What’s the problem? It’s not just insufficient funds or fraud concerns. Payments today go through a labyrinth of processors, gateways and acquirers, each with its quirks. Along the way, critical transaction data can go AWOL, leaving issuers scratching their heads and merchants losing sales.

“There are countless factors that can disrupt a transaction,” Haymond said, noting that these range from insufficient funds to incorrectly coded transaction messages.

Merchants often rely on multiple acquirers, gateways and orchestration platforms, each contributing to an intricate chain of transaction processing. Haymond said data and transaction details can become fragmented across this chain, making it difficult for issuers to confidently approve payments.

She summed it up: “If the data isn’t accurate or some of it’s missing, it makes approving transactions very, very challenging.”

But, as Bhatt said, Mastercard is at the forefront of tackling these challenges with its AI-driven Payment Optimization Platform, promising not only to enhance approval rates but also to transform the customer experience.

“Merchants own how they route transactions,” he said, “but Mastercard’s unique position allows us to see the full ecosystem of payment data.” This perspective enables Mastercard’s AI to analyze transaction patterns, issuer preferences, and fraud indicators in real time, enriching authorization messages to increase the likelihood of approval.

The platform’s standout feature is its ability to address one of the most common causes of payment declines: insufficient funds. By using network-level data, Mastercard can predict when a customer’s account is likely to have sufficient funds and strategically reattempt the transaction. Bhatt said this approach can drive incremental revenue while reducing unnecessary transaction retries.

“This is the holy grail of optimization,” Haymond said.

Unlocking Efficiency

By simplifying the web of transaction data and fostering collaboration across stakeholders, AI-powered payment optimization moves beyond the role of a tool to become a strategy.

Mastercard’s own platform doesn’t just benefit merchants — it also alleviates pressure across the entire payment ecosystem. For merchants, it offers a single integration point for accessing Mastercard’s suite of solutions, including advanced tokenization and fraud detection tools. For issuers, the enriched transaction data streamlines decision-making, allowing them to approve more legitimate transactions without compromising security.

That’s the kicker: Even declined transactions get a second chance. For instance, if your account runs low on funds, Mastercard’s AI queues the transaction and retries it at just the right moment.

Bhatt called it the “closest signal to open-to-buy,” boosting approval rates and sparing merchants the headache of manually reattempting transactions.

By simplifying the checkout process, reducing friction and tailoring the payment journey, businesses can turn one of the most complex aspects of eCommerce into a competitive differentiator.

Looking ahead, one thing is clear: The checkout experience will never be the same.