ExecSummary

STATUS: This work has largely been superseded by the Interest Group Vision. Notes:

* We may want to express goals from different audience perspectives (customers, merchants, banks, developers)

Intro

ECommerce is thriving and continues to expand. However fragmentation of payment systems is limiting the growth potential as are problems —both real and perceived by consumers— such as fraud and usability.

Because the Web is ubiquitous, strengthening support for Web payments has the potential to create new opportunities for businesses and consumers. Mobile devices are already transforming the industry by supplanting physical payment cards in proximity payments, voucher distribution, and identification when people authenticate to a scanner, point of sale, or access gate. Although we are seeing innovation in mobile payment systems, the lack of standards makes it more difficult to adapt to new payment approaches or integrate new payment providers. Fragmented regulatory environments further complicate the payments landscape.

To achieve greater interoperability among merchants and their customers, payment providers, software vendors, mobile operators, and payment networks, the W3C Web Payments Interest Group, launched in October 2014, is developing a roadmap for standards to improve the interoperability of payments on the Web.

Goals

Our goals for a more interoperable Web standards framework for payments are:

• Increased user choice. We seek to enable people to pay with their preferred payment instruments (that are also accepted by merchants) and to increase the choice of payment instruments available to users.
• Improved user experience. We want to improve the user experience in a variety of ways. These include reducing the need to provide data as part of a transaction (helpful on mobile in particular), simplifying payment user interfaces, harmonizing checkout experience across ECommerce sites, and making it easier to make payments from a wide range of devices, such as computers, portable devices, televisions, eBooks, and automobiles. Taken together, we expect these improvements will lower the rate of "cart abandonment."
• Greater security. We seek to increase confidence in the Web as a platform for conveniently and securely concluding transactions. By improving Web security and fostering an ecosystem that makes it easy to integrate more secure payment instruments, we expect to see a major reduction in payments transaction fraud (such as stolen card numbers or compromised virtual currency wallets). We are interested in approaches (such as tokenization) that reduce the need for customers to share sensitive data with merchants or other parties, at the same time as we want to make payments a seamless experience for all parties.
• Minimal standardization. We seek to require as little new technology and as few standards as possible, in order to minimise the barriers for rapid, widespread adoption.
• Rapid, widespread adoption. The framework must be adopted by a significant part of the global market in order to be a viable platform for development. Interoperability with existing industry standards will play an important role in broad adoption. In addition, for global adoption we will need to take into account diverse payment preferences (such as credit cards, e-cash, electronic direct debit, etc.).
• Regulatory acceptance. One important aspect of widespread adoption is acceptance by many regulatory frameworks around the world. For example, It must be possible to report legally-required information about transactions above a certain value to relevant authorities - although it should be possible to conduct a legal, pseudo-anonymous transaction without more burden than today. We note that regulators have varying approaches in determining what sequence of a payment transaction constitutes a contract between buyer and merchant.
• Innovation. Standards generally lower barriers to entry and foster innovation. The framework should enable providers to develop new services (e.g., discounts, coupons, context-sensitive offers) and customise and extend existing services to match their needs on top of standard protocols and formats. These standards should also encourage innovation in emerging areas such as payments in automotive settings and the Internet of Things.
• Lower Costs. Standard APIs and data formats should lower the cost of providing and adopting new payment solutions, and in changing payment providers.
• Transparency. The framework should enable the parties in a transaction to understand the costs of a transaction (e.g. exchange, handling fees, taxes, etc.) and what (personal) data is going to be exchanged or was exchanged and created in hindsight.
• Automatability. A standard framework should enable automatic payments to be made and understood by individuals and organizations, but also the software and devices to which they have delegated authority. For instance, it should be possible to authorize a car to pay for road tolls and parking up to a certain limit without needing constant confirmation. Machine-readable data plays a role in automatability.
• Portability. Users and merchants should be able to port money and data easily from one system to another - whether moving a list of regular bills to be paid between payment systems, or getting cash in exchange for credit in a particular system.
• Monetization. Web developers will be able to integrate payments smoothly into a variety of user experiences on the Web, including in-app payments, downloads, and subscriptions.

Benefits for Various Audiences

Many of the above goals will lead to benefits for a multiple audiences, such as greater security and greater interoperability, leading to a greater overall volume of payments through the Web. Here are a few benefits from various perspectives.

• Users. We want to make it much easier to use one's preferred payment instruments with any merchant, on any device. Standards will give users more options to pay both by fostering innovation and by making it easier to adopt a wider variety of payment solutions. We anticipate that users will be able to make payments more quickly, and more securely. We will see greater consistency in ecommerce solutions across merchants, platforms, and devices. A standard payments framework for the Web will support existing and new payment methods. Extending the current financial system to include unbanked and underbanked will also improve the financial health of those individuals and lead to long-term societal improvement.
• Merchants. Today each merchant must add code to their sites or applications for each new payment solution. A user-centric payment architecture means that merchants will have to implement less (thus lowering cost), as users access secure payment schemes that will work with any site that accepts that scheme. By making the payment experience more consistent and easier across sites, merchants will improve the customer experience and speed up payments. In addition, merchants will be able to provide branded value added services such as loyalty coupons and special marketing offers that are visible to users as payment options. Merchants may also be able to reduce payment network fees. Web payments will enable merchants to reduce their own liability by making it less necessary to store sensitive or PCI-DSS compliant data.
• Mobile Operators. Mobile operators will also have new opportunities to broaden their customer relationship by becoming a payment agent provider. Standards will also facilitate carrier billing. Operators will also have new opportunities to provide value-added services to mobile users (e.g., location-based partnerships or enhanced security through device capabilities) in a way that is scalable across merchants.
• Banks, Card Issuers, and Networks. These financial institutions will have new opportunities to strengthen relationships with their customers and offer them more frequent and safe opportunities to use their payment instruments for ECommerce. Lower cost of extending banking services to new customers; 3 billion people expected to come online in next 5 years.

Proposed but not agreed yet

Person-to-person

A system should enable simple, small payments between two individuals, as well as so called "business to consumer" transactions. (Question: would our work be useful in reducing compliance costs?) If we include this, we should be sure to mention that this is one opportunity to provide financial services to more people (in all regions of the world).

Convergence between online and brick-and-mortar.

This is mentioned in charter, and architecture should bear this in mind, but it is not the current focus of work.

Topics of interest the group but not first priority

• Streamlined cross-platform exchanges of value.
• Making it easier to move value between different networks.

Acknowledgments

• Thanks also to Ted Bissell for feedback and suggestions.