HSBC joins Asia AI payments group on liability rules

The Emerging Payments Association Asia has launched an AI and Agentic Payments Working Group with HSBC to develop industry standards and liability frameworks for agentic commerce across the Asia Pacific.

The initiative brings together banks, payment networks, fintechs and technology platforms as more companies in the region handle transactions initiated by artificial intelligence agents rather than people.

Industry participants are trying to address a gap in existing payment rules. Across much of the Asia Pacific, current frameworks do not clearly define who is responsible when an AI agent makes a payment outside its mandate, how those agents should be identified and authenticated across borders, or how disputes should be handled when software initiates a transaction.

The move comes as agent-led payments shift from testing to commercial use. In May, HSBC partnered with Mastercard to enable end-to-end business-to-business agentic commerce transactions for two Singapore-based clients. Alipay's AI Pay recorded more than 120 million autonomous transactions in a single week in February, while Mastercard completed a live consumer-authenticated agentic payment in the Asia Pacific in March.

That activity has raised questions for financial institutions, merchants and regulators about fraud controls and liability. Systems designed to monitor human behaviour may struggle to distinguish between a legitimate software agent acting at machine speed and a compromised account, increasing the risk of false positives or missed fraud.

Regulatory gap

The International Monetary Fund has noted that current liability regimes assume human intent and direct causation, an approach that is harder to apply when an autonomous system makes decisions independently. That creates legal uncertainty in cases such as flight bookings, invoice settlement or subscription renewals executed by an AI agent.

Other jurisdictions are already moving to address similar issues. In Europe, work is underway through PSD3, the EU AI Act and an emerging "Know Your Agent" framework focused on identity and transparency in financial services.

The financial stakes could be significant if liability is not clarified. Analysis of the UK's authorised push payment fraud reimbursement model, under which sending and receiving payment service providers split liability equally, suggests that a similar model for agentic AI could expose providers to substantial costs due to the speed and scale at which software agents can approve transactions.

Against that backdrop, the new working group plans to draft common standards for agent identity, authentication and authorisation. It also aims to define trust and liability models for cases in which an agent exceeds its instructions or a payment fails.

Participants will also examine commercial structures for agentic commerce and coordinate with regulators across the Association of Southeast Asian Nations and Asia-Pacific Economic Cooperation economies. The group plans to produce practical toolkits, briefings and operational guidance for member organisations.

Camilla Bullock, Chief Executive Officer of Emerging Payments Association Asia, described the issue as immediate rather than theoretical.

"AI agents are transacting across Asia Pacific right now, at scale, at machine speed, and without the regulatory architecture to protect businesses and consumers from real risks around liability, identity and fraud. Every organisation in this industry is trying to solve these problems independently, in isolation from the regulators and governments who will ultimately write the rules.

The EPAA AI & Agentic Payments Working Group brings the right organisations together to define the standards, infrastructure and frameworks that agentic commerce demands, and takes those positions directly to the regulators and governments across ASEAN and APEC. The organisations that help build these frameworks now will shape how agentic commerce works across Asia Pacific for the next decade," Bullock said.

Industry response

HSBC is the group's founding member and has already been involved in pilot transactions in the segment. Those early tests showed how automated business payments could be completed end-to-end with controls in place.

"Our ambition is to be the most trusted bank globally, and nowhere is this more true than in payments. The same level of customer trust must carry through to the new business models that are being developed as automation and agentic AI reshape commerce. Our pilot agentic commerce transactions have demonstrated how B2B transactions can be executed end-to-end with control, transparency, and risk management from the start. We look forward to working with other members of the working group to build the foundations required for agentic commerce to take flight," said Nicholas Soo, Managing Director and Asia Head of Payment Products, Global Payments Solutions at HSBC.

Asia Pacific is expected to be the fastest-growing market for agentic commerce globally, with projected compound annual growth of nearly 45% through 2031, according to market estimates cited by the association. That growth, combined with fragmented national rules across the region, helps explain why payment companies are trying to agree on a common approach before regulators impose separate standards market by market.

The working group will operate at both committee and broader membership levels, with places open to member organisations from across the regional payments sector. Its remit spans technical standards, legal accountability, fraud controls and industry engagement with policymakers as AI-led payment activity expands.