Microsoft is partnering with PayPal to launch Copilot Checkout, a new feature that allows shoppers to complete purchases directly within the AI assistant's chat interface. The move, announced at the NRF 2026 retail conference, marks a significant entry by Microsoft into the AI-driven commerce landscape.

The integration is designed to create a more seamless shopping experience by eliminating the need for users to navigate away to a retailer's website to check out. According to Microsoft, shopping journeys involving Copilot are 33% shorter and result in a 53% increase in purchases made within 30 minutes of interaction. This positions Copilot as a powerful tool for reducing friction and capturing high-intent buyers.

This development is part of Microsoft’s broader strategy to embed AI across the entire retail workflow. The company also introduced Brand Agents, a tool for Shopify merchants that uses a brand's product catalog to answer customer questions within Copilot. By handling the transaction directly, Microsoft and PayPal are positioning themselves at the center of the customer journey, potentially disintermediating the direct relationship between retailers and shoppers.

The launch signals a growing trend toward 'agentic commerce,' where AI platforms are not just for discovery but also for transaction. According to a forecast from eMarketer, AI platform-driven e-commerce sales are expected to reach $20.57 billion this year, highlighting the nascent but rapidly growing opportunity that Microsoft is targeting.

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https://newsroom.paypal-corp.com/2026-01-08-PayPal-Powers-Microsofts-Launch-of-Copilot-Checkout