UK Retailers Accelerate Agentic AI Adoption in Payments Despite Infrastructure and Regulatory Gaps: TLT Report

UK retailers are rapidly adopting agentic AI within their payments strategies, even as concerns grow around infrastructure readiness, legal liability and regulatory clarity. According to new research published by law firm TLT, nearly half of the UK’s largest retailers (49%) are already investing in agentic AI to modernise how payments are processed and optimised.

UK Retailers Accelerate Agentic AI Adoption in Payments Despite Infrastructure and Regulatory Gaps: TLT Report

Agentic AI Gains Traction in Retail Payments

The report reveals that 29% of retailers are combining agentic AI with loyalty-linked payment systems, while 20% are focusing exclusively on AI-driven payment innovation. These early investments highlight a shift toward more autonomous, data-driven purchasing journeys.

Current use cases include:

• Autonomous stock replenishment

• AI-led selection of optimal payment methods

• Dynamic pricing decisions

• Automated checkout and purchasing flows

Together, these developments signal the rise of self-directed, AI-enabled commerce, where transactions increasingly happen with minimal human intervention.

Digital Wallets and BNPL Remain Top Priorities

Beyond AI, UK retailers continue to invest heavily in broader payment innovation:

• Digital wallets are prioritised by 50% of retailers

• Buy Now, Pay Later (BNPL) is seen as critical by 45%, especially in fashion and beauty

• Open Banking adoption remains uneven:

  • 15% fully integrated

  • 25% piloting

  • 32% planning adoption

• Only 10% currently prioritise digital assets or blockchain-based payments

Infrastructure and Governance Lag Behind Innovation

Despite rapid experimentation, payments infrastructure and contracts are struggling to keep pace. Just 15% of retailers believe their existing systems and payment contracts are capable of supporting AI-mediated transactions.

Even more concerning, nearly half of respondents remain unclear about liability when AI systems initiate or manage payments — a major risk as automation increases.

Regulation and Liability Are the Biggest Barriers

Regulatory uncertainty emerged as the single biggest challenge, cited by 70% of retailers. Key concerns include:

• Future BNPL regulation

• Lack of clear AI transaction guidance

• Compliance obligations under the Data Use and Access Act

Fraud prevention also remains high on the agenda, with 29% of retailers planning to deploy AI-powered fraud detection tools to combat increasingly sophisticated threats.

Industry Leaders Call for Stronger Collaboration

Commenting on the findings, Alex Williamson, partner at TLT, said retailers are innovating faster than compliance frameworks can adapt.

He noted that while AI, digital wallets, BNPL and embedded finance are reshaping consumer expectations, only a small fraction of retailers feel confident their legal and contractual foundations are fit for purpose.

Williamson stressed that deep collaboration between retailers, payment service providers (PSPs), banks and fintech firms will be essential to unlock the full value of agentic AI while ensuring resilience, compliance and consumer trust.

The Future of Retail Payments

As agentic AI becomes more embedded in retail payments, success will depend not just on innovation, but on clear regulation, robust contracts and shared accountability. Retailers that align technology with governance will be best positioned to scale AI-driven payments confidently and deliver seamless customer experiences.