UK retailers invest in agentic AI as payments lag, says TLT

December 15, 2025

TLT, a law firm, has published new research revealing that almost half of the UK’s largest retailers are already investing in agentic AI as part of their payments strategies, despite widespread uncertainty around infrastructure readiness, liability and regulation.

According to the research, 49% of retailers are investing in agentic AI within their payments strategies. Of these, 29% are combining agentic AI with loyalty-linked payments, while 20% are focused solely on AI-led payment innovation.

Early use cases include autonomous replenishment, AI-driven selection of optimal payment methods and dynamic pricing decisions, all of which signal the emergence of increasingly autonomous purchasing journeys.

Beyond AI, retailers are doubling down on broader payment innovation. Digital wallets are prioritised by 50% of respondents, while Buy Now Pay Later (BNPL) is viewed as a key technology by 45%, particularly in fashion and beauty. Open Banking adoption remains fragmented, with just 15% fully integrated, 25% piloting and 32% planning adoption. Meanwhile, only 10% of retailers are prioritising digital assets or blockchain-based payments.

However, infrastructure and governance are lagging behind innovation. Only 15% of retailers believe their payment contracts and systems are currently equipped to handle AI-mediated transactions, while nearly half remain unclear about liability for AI-enabled payments.

Regulatory uncertainty was cited by 70% of respondents as the sector’s biggest challenge, with concerns centred on BNPL regulation, AI transaction guidance and obligations under the Data Use and Access Act.

Fraud prevention also remains a critical issue, with 29% of retailers planning to deploy AI-based fraud detection tools.

TLT partner Alex Williamson said, “These findings demonstrate that retailers are innovating rapidly but require greater certainty around compliance frameworks to scale new payment technologies more confidently.

“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. As innovation accelerates, payments ecosystem players have an important role to play in providing certainty, resilience and clarity.

“Success will depend on deep collaboration between retailers, PSPs, banks and FinTechs. The future belongs to those who see beyond the transaction and have contracts and compliance frameworks in place to leverage new technologies confidently in order to maximise their payments and related data opportunities, while better serving their customers.”