Web Payments Workshop - Session 1

Minutes for 2014-03-24

  1. Overview of Current and Future Payment Ecosystems
  2. Alternative Currencies - Ven and HubCulture
  3. National Banking Infrastructure - United States Federal Reserve
  4. Web Developers - Yandex Money
  5. International Infrastructure - World Bank
  6. Card Processing - Worldline
  7. Remittances and the Underbanked - Bloomberg
  8. General Discussion about Financial Infrastructure
Daniel Appelquist
Manu Sporny
Daniel Appelquist, Manu Sporny, Charles McCathie Nevile, Stan Stalnaker, Bryan Sullivan, Virginie Galindo, Ken Isaacson, Wendy Seltzer, Evgeny Vinogradov, Jörg Heuer, Ricardo Varela, Harish Natarajan, Olivier Maas, Prakash Hariramani, Dave Birch, Erik Anderson, Axel Nennker, Joseph Potvin, Hannes Tschofenig, Adrian Citu, Alexander Gee, Connie Theien, Emil Johansson, Jeff Jaffe, Michel Leger, Louise Bennett, Ernesto Jimenez, Dave Raggett, and 75 others for a total of 103+ people
Manu Sporny is scribing.

This page contains minutes for an official W3C workshop event that have been cleaned up and reformatted by the Web Payments Community Group. The W3C and the Web Payments Community Group are two separate organizations. Readers should understand that while the workshop was an official W3C event, the operation of the Web Payments Community Group is not officially sanctioned by W3C's membership. More information on joining W3C (membership fees) and/or the Web Payments Community Group (free) can be found on the respective websites.

Topic: Overview of Current and Future Payment Ecosystems

Charles McCathie Nevile: Ok, welcome to the first session. You didn't come to hear me talk, so without further ado, on to our panelists who will give us an overview of where we are with payments on the Web today.

Topic: Alternative Currencies - Ven and HubCulture

Stan Stalnaker: Hello, I work for Hub Culture - one of the first social networks. We operate a digital currency, It's been moving into financial markets
Stan Stalnaker: I want to talk about the idea of reserves, social contract, and identity.
Stan Stalnaker: These are core to payments. The size of where we see digital currency - by 2017 2.5 billion unbanked coming online - low incomes, not profitable to find banking solutions for them.
Stan Stalnaker: 2018 Bots doing around $1T in transactions - humans not playing day to day in transaction.
Stan Stalnaker: 2020 - 50 Billion connected devices
Stan Stalnaker: Social connections are important, virtual currency allows us to create/maintain accounts relative to connections.
Stan Stalnaker: A few things in Ven that are valuable - Ven is 100% asset backed - wide variety of currencies - it's stable... 50% less volatile than other currencies.
Stan Stalnaker: It's global, it's secure - you don't use credit card / banking system to move it around. zero transaction cost.
Stan Stalnaker: We introduced "carbon" into asset - so actual money backing currency builds in natural protection for nature. This is our answer to "social contract" concept.
USE CASE: Bots that execute financial operations on behalf of users.
Stan Stalnaker: Even though Ven isn't fiat - it is a ledger of value and recorder of value.
Stan Stalnaker: These currencies can have positive benefit to society.
Stan Stalnaker: We think we'll do $1B in transactions this year - it's traded in the global markets.
Stan Stalnaker: Social network that runs Ven is an open source set of APIs. Apps on core platform are moving towards open source so that others can innovate/build around it.
Stan shows Hubs that show Ven.
Stan Stalnaker: We're working w/ partners - authorities that can issue/redeem Ven.
Stan Stalnaker: We're working on identity - HubID - KYC and AML solution for digital currency on the Internet - can be used by anyone.
Bryan Sullivan: Kyc? aml?
KYC == Know Your Customer
AML == Anti-Money Laundering
Stan Stalnaker: We're creating open source crypto vaults that are issuing identity to individual uses on the Web. You own this ID - self sovereignty on the Web.
Stan Stalnaker: We don't sell the data that's connected to underlying users - we work off of a transaction model. Data is safe and not being looked at.
Stan Stalnaker: In return for this, we can give you a unique profile/badge - more data you put into that vault, it generates an "aura" on the Web. They only have to look at your HubID to know how authenticated you are.
USE CASE: Personal vault can host information/assets and issue ids useful for various things (e.g. payments?)
Stan Stalnaker: Size of your network, bank number - you own this stuff yourself. No one can access this data w/o your knowledge.
Stan Stalnaker: In this way, you have much more information, much more granular control.
Loud ringing drives Stan off of the stage. Chaals is being brutal w/ speaker timing.
USE CASE: Managed access to personal identity/attributes as economically valuable assets in a payment system

Topic: National Banking Infrastructure - United States Federal Reserve

Ken Isaacson from US Federal Reserve takes the stage, these are the slides for this talk: http://www.w3.org/2013/10/payments/slides/session1_fed.pdf
Ken Isaacson: I lead Future Payment team - national US Fed effort. Improves the payment system in the US.
Ken Isaacson: Fed has multiple responsibilities - provide financial services to depository institutions - that's where this intiative is being led.
Ken Isaacson: Supervisors - we don't represent the monetary policy or regulatory side.
Ken Isaacson: One of the things we do is every 5 years, we update our strategic direction - essence of refresh is to improve safety, speed, and efficiency of the system, from end to end.
Ken Isaacson: Renewed focus on speed - make payments faster.
Ken Isaacson: End-to-end - Fed has focused more on inter-bank - now we're focused on end users.
Ken Isaacson: We put out a public consultation to have the Fed put some ideas out there on the problem in the US - what we can improve - desired outcomes.
Ken Isaacson: Desired outcomes - strategic industry engagement, ubiquitous real-time payment capability, improved efficiency, cross-border payment improvements, enhanced payments safety and security.
Ken Isaacson: Multiple work streams feeding into the Fed - three other work streams.
Ken Isaacson: Fed's retail payment study - important to figure out where we are.
Ken Isaacson: Data of 2012 released publicly in 2013 - 122B total in ACH payments
ACH == Automated Clearing House (bank-based payments)
Ken Isaacson: Breakdown - less checks, about the same ACH, more credit card, much more debit card, pre-paid card...
Ken Isaacson: Highest areas of growth are Debit Cards / Prepaid.
Ken Isaacson: Public consultation paper - asked anyone to give input on how we could improve.
Ken Isaacson: 200 Responses - bottom line - agreed on gaps/opportunities that US Fed put out there.
Ken Isaacson: Fed should become more active, non-banks want to get involved, desire for faster payments, unfairness in risk management.
Ken Isaacson: End-user research - 1,200 consumers - resuls are here
Ken Isaacson: 69%-75% Prefer instant or one-hour payment systems.
Loud ringing drives Ken off the stage.
Charles McCathie Nevile: Thank you for staying to your time :)... Next speaker is Evgeny from Yandex.

Topic: Web Developers - Yandex Money

The slides for this presentation are here: http://www.w3.org/2013/10/payments/slides/session1_yandex/
Evgeny Vinogradov: Yandex Money is the payment system provider for Yandex - huge search engine/shopping company in Russia.
Evgeny Vinogradov: This is a payment service provider perspective. We need a standard?
Evgeny Vinogradov: We want to decrease the friction for user payment, we want to improve security, the standard could help both of these things.
Evgeny Vinogradov: We want to provide interoperability - let's talk about markup.
Evgeny Vinogradov: One parameter, lots of parameters - markup can help user. Browser - start email app.
USE CASE: Invoke payment service via URI scheme.
Bryan Sullivan: Sounds like the earlier vision for web intents, in which "pay" was one of the actions I recommended be on the roadmap
Evgeny Vinogradov: We want to have a standard like mailto: but in the payments area. We want to help someone that wants to pay via this link markup - payto:mybankcom/payto.xml?item=BigBook&sum=10$account=28394728&someotherparams=foo
Evgeny Vinogradov: Who can process the payment?
Evgeny Vinogradov: The benefits is this is just a simple link
Evgeny Vinogradov: Stuff like this is the sort of stuff we can expect from a standard.
Evgeny Vinogradov: Once you click the link, the payment process begins.
USE CASE: Simple URI system - simple payment markup that developers get right.
Evgeny Vinogradov: Once we initiate the transaction, we need to know where the money comes from.
USE CASE: Enable customer-based selection of payment processor.
Evgeny Vinogradov: The source of money can be different, changed during the payment process, this can be complicated infrastructure for banks/payment processors.
Evgeny Vinogradov: We also need to be concerned about the confirmation mechanism (how does a buyer say they have the money, seller has the goods)
USE CASE: Switch payment method in the middle of a transaction.
Jörg Heuer: Would you be able to incorporate user loyalty cards / coupons in your solution?
Evgeny Vinogradov: We don't want to restrict it to just loyalty cards - maybe not for first version.
Ricardo Varela: This is more a suggestion of an intent-based payment mechanism? Was this a proposal?
Evgeny Vinogradov: This is an idea, it's supposed to make it easier.
Bryan Sullivan: Re invoking payment via a URI, is a well-known resource essentially equivalent to a uri scheme in this case / for this purpose? that's something to be considered at qa technical level I guess
USE CASE: Allow loyalty cards, coupons, etc. as a payment mechanism.
Charles McCathie Nevile: Next up is Harish.

Topic: International Infrastructure - World Bank

Harish Natarajan: I'm from The World Bank, payment system deliveries group. Let's focus on public policy perspectives - safety and efficiency is a goal.
Harish Natarajan: We care about affordability - 2.5B who don't have access to payment services can't afford costs.
Harish Natarajan: We want access - goal should be to expand access.
Harish Natarajan: Moving to electronic is not necessarily an objective - there are costs there - things like excessive use of credit cards may not be ideal
Harish Natarajan: There have been studies done on what a good electronic payment mechanisms can do for a country... Brazil did a study that showed that they could save a almost 0.7% of GDP, huge savings.
Harish Natarajan: Cost of cash is about $70B to businesses - that's in US.
Harish Natarajan: Government payments - small amount of cash distribution to families in Brazil could be reduced by 80% if moved to electronic.
Harish Natarajan: The average global cost for representative amount of international remittances was above 11% in 2007, In 2009 the World Bank in association with other stakeholders championed a global effort to bring prices down by 5% points in 5 years
USE CASE: National incentives for using web-based payments due to beneficial effects upon economy.
Harish Natarajan: Moving towards electronic payments - wide disparity
Harish Natarajan: Number of cashless transactions is still high
Scribe missed slide #6.
Harish Natarajan: Here are the factors that matter: infrastructure is bad, competition and cost is bad, government and corporate payments are not being addressed, risk management mechanisms are not adequate.
Harish Natarajan: This is a chart that shows percentage of population that has access to payment network (slide 8).
Harish Natarajan: 2010 - We looked at diff payment instruments being used.
Harish Natarajan: Top payment instrument by volume.
USE CASE: Ensure access to payment systems by non-traditional channels, where barriers exist for traditional channels
Harish Natarajan: Check usage is substantial in low-income countries. Direct debit are lower in those countries as well.
Harish Natarajan: This shows that traditional electronic payment instruments are also not being used for payment needs in those countries.
Harish Natarajan: Here are a few trends - technology and new payment needs are key drivers for innovation.
Harish Natarajan: There is a greater involvement from non-banks in retail payments - these are not banks.
Harish Natarajan: Pre-paid products are also on the rise - lots of different types of emoney - this is at an early stange.
Harish Natarajan: Business model, card payments - greater usage of authentiation mechanisms - biometric, 2 factor, etc.
Harish Natarajan: Broad shift toward near-realtime in traditional payment systems - examples in Mexico, India, etc.
Harish Natarajan: The objective - universal financial access by 2020.
Harish Natarajan: Access could be possible by 2020.
Charles McCathie Nevile: Olivier is next from Worldline.

Topic: Card Processing - Worldline

Olivier Maas: Where do you draw the line between Web Payment and non-Web payment? We've talked about cash and non-cash payment mechanisms. What is current, what is past? It's not clear.
Olivier Maas: Basics of payment is a buyer and a seller. Let's say buyer has a smartphone and seller has a POS (Point of Sale)
Olivier Maas: Let's say they want to do an EMV payment.
Bryan Sullivan: EMV = https://www.emvco.com/
Olivier Maas: So, EMV offline payment is done - POS terminal won't go online to query about issuer/account - this is an account present transaction
Bryan Sullivan: EMV = Europay Mastercard Visa
Olivier Maas: What does this have to do w/ Web Payment? It's not even online, it's offline.
USE CASE: Secure Element-based offline payment.
Olivier Maas: These are secure elements, the cloud is involved - let's go one step further.
Prakash Hariramani: Actually he is talking about non secure element based payment where payment credentials are in the cloud
Olivier Maas: On the POS terminal, there was no PIN input - that was done on the buyer's side.
Olivier Maas: There is an app on the tablet for the seller. Let's go one step further, let's get rid of the tablet - let's say everything happens in the web browser of the buyer - wallet app.
Olivier Maas: So, there is a SE in the browser on their mobile phone - the idea was to give you some thoughts about where we draw the line.
Olivier Maas: In both cases, we're doing EMV card not present transaction. So, cloud - phone - cloud?
Olivier Maas: EMV is well suited - but where are we going.
An unknown voice from the crowd asks: "Do card schemes agree w/ this card not present mechanism?"
Olivier Maas: They said they'll support this architecture - they're going to publish a SE transaction spec soon.
Olivier Maas: Offline EMV authentication - this has been around for 10 years - nobody uses it - what's the barrier?
Olivier Maas: It's been adopted by some banks during the pilot, not on the wide scale - total cost of ownership is too expensive.
Dave Birch: Costs are pushed onto merchant - surely these are cheaper if that weren't the case?
Bryan Sullivan: CAP = Chip_Authentication_Program http://en.wikipedia.org/wiki/Chip_Authentication_Program
Olivier Maas: There are many reasons this solution hasn't been adopted widely.
Jörg Heuer: I don' t think big difference is offline - we don't expect everhything to be online, always.
Olivier Maas: Technically, EMV is "offline", but you need to be "online" to perform it.
USE CASE: Browser-mediated offline transactions.
Chaals next up is Erik Anderson from Bloomberg.

Topic: Remittances and the Underbanked - Bloomberg

Erik Anderson: I'd like to talk a bit about remittances - 1.1B people live below $1.25/day
Erik Anderson: There are a lot of people in different parts of the world that don't have access to financial networks/services.
Axel Nennker: E.g. Mastercard does not care (much) about the channel how their service is reached. Can be over the web.
Erik Anderson: Remittances are growing - $400B today - these are people trying to send money back to their family. How are you going to get $20 to your mom in Brazil when it costs $30 for the wire transfer?
USE CASE: Sending money to family internationally via low-cost methods.
Erik Anderson: The countries where you need the money the worst are the most expensive to send it to.
Erik Anderson: South Africa to Malawi - 23% to send the money - people provind gthe services get that money.
Erik shows very complex slide showing how money flows.
This is just for US -to Mexico.
Erik Anderson: Every one of these steps, someone takes a percentage of this money.
Erik Anderson: Let's just go from the person to US Feds to person.
Erik Anderson: We should also look at cryptocurrencies.
Erik Anderson: Out of all 7 stages that your money goes through, each one of these people makes money.
Erik Anderson: Saving 5% per year is 15B extra to those familities.
Erik Anderson: Many places in Africa have bypassed traditional telephone lines, they have mobile phones - computers in their pocket.
Erik Anderson: FinCEN needs to come up w/ creative solutions to handle currencies.
Erik Anderson: Everyone that sends value must be licensed - etc - high cost of compliance. They have thousands of compliance officers to meet regulator.
Erik Anderson: Anonymity is Evil (stay with me)
Bryan Sullivan: Wow talk about your value judgements!
Erik Anderson: We should put the regulations in the protocols.
Erik Anderson: Underground economy that people are trying to send this stuff to - these folks live on $1.25/day
USE CASE: Enable financial regulation (e.g. reporting above a certain value) to be implemented directly in payment protocols
Erik Anderson: System D - people were classified into standard money users - kid selling koolaid and someone else running drugs categorized into same area.
USE CASE: Enable Zero-trust transactions.
Dave Birch: Anyone read FATF recommendations? It's quite good. Those recommendations say to target higher value transactions.
Dave Birch: So, we should reduce these costs - any oppotunities to remove these?
Erik Anderson: What gets reported when - $10K in the US, China - it's probably $100. We need to put financial regulations into the code - don't focus on compliance officers. Cheaper to put it in code than hire an army of compliance officers.
Erik Anderson: Put the regulatory call-outs in the technology - that's a use case.
Erik Anderson: So, let governments know what they need to know while keeping out of their business.
Joseph Potvin: Put code is law - is that Lawrence Lessig's work?
Erik Anderson: Yes, that idea has been floated around the cryptocurrency world - so yeah.
Chaals thanks the panelists for their presentations.
Bryan Sullivan: Code is law - http://codev2.cc/
Dave Birch: Banks thought that things were fine, everyone else didn't.
Dave Birch: How is the US Fed going to weight those comments? In the EU, the government had to step in and mandate it.
Ken Isaacson: Our perspective is an end-to-end perspective. So, we have our high-level objectives. If there's something in the public interest, we want to support that.
Ken Isaacson: Many people said that the only way this is going to happen is to do a mandate - that may be where we're headed.
Ken Isaacson: So, regulators are watching, but we're operating w/in the constraints of the law.
Wendy Seltzer: Anonymous does not equal Evil - we should think about customer/end-user interests. We should look at which attributes of identity are necessary where; users' interests may differ from regulators'. Focus on disaggregating when we need to do it.
Erik Anderson: Depending on what government you need to go into will shape the regulation.
USE CASE: Leveraging variable degrees of identity/anonymity per requirements of the payment transaction.
Hannes Tschofenig: Does this new system need to work w/ legacy infrastructure - payment systems in Africa don't necessarily. These countries may catch up - they jump an entire generation of technology.
Hannes Tschofenig: I'm not quite sure I get the message.
Erik Anderson: We want a bridge - we can't replace everything in a day - Ripple will talk about it during panel 3.
Daniel Appelquist: I want to get back to International Remittances - it's an area that we ran into a lot of trouble when integrating into BlueVia - if you want an end user to pay from Brazil to Estonia - then that's a huge issue.
Daniel Appelquist: There are startups coming into the space that are doing better...
Erik Anderson: The problem w/ startups is that they're not top-down. Lots of financial institutions, govt. needs to be involved. W3C standards are a better solution. There are a lot of big players in this room that are going to be a part of it.
Erik Anderson: Then again, startups are paving their way too - while others are taking a passive stance.
Harish Natarajan: Broadly, what we're seeing is Visa/mastercard for international payments - aside from SWIFT, there is no such infrastructure. Earthport does some of this, so does Western Union.
Harish Natarajan: US Federal Reserve - international payment framework.

Topic: General Discussion about Financial Infrastructure

Hannes Tschofenig: Role of standards may be different here - you can always add more roles as people do - we may want to start fairly simplistic w/ very few standards.
Hannes Tschofenig: Maybe we don't need so much standardization.
Charles McCathie Nevile: Organisation to track new transfer systems - http://datauthority.org/
Stan Stalnaker: DAT Authority is important - reguator industry organization - related to cutting edge technologies - crypto, digital, digital asset transfer systems - Washington later this month. Look at it.
Stan Stalnaker: That could be a good link to what's happening here.
Ricardo Varela: It's nice to think that standards are going to solve that stuff - but W3C can standardize protocols, it's the financial operators that need to implement this stuff.
Ricardo Varela: At BlueVia, we were thinking of doing these transfers w/in ourselves. But when we do that, law comes into play - if Visa/Mastercard have effectively a monopoly, how can business entities play the role of money transmitter?
Ricardo Varela: If you have a facebook coupon, and transfer to facebook in spain - no banks, no western union, now multiply that by several million transactions.
Adrian Citu: Adrian from SWIFT - payment, ISO20022 - a lot of what you're trying to do is already done by SWIFT in some cases.
Adrian Citu: We could start w/ ISO standards and see where that takes us.
Jörg Heuer: My assumption is that people want to know the money is there - US Fed - need more info (scribe missed the rest)
Ken Isaacson: How fast you received the money is not as important as convenience. When asked all other things equal, most everyone said "Yes".
Ken Isaacson: Consumers - speed of debiting is more important than crediting. With corporations - they care more about getting the money faster.
Ken Isaacson: But that's not always the most important factor.
Harish Natarajan: What's the expectation of the consumer. P2P transfer - they expect it to be near real-time. For a business, they want confirmation of payment.
USE CASE: Realtime purchases involving prerequisite reception of funds from international sources (e.g. family).
Charles McCathie Nevile: Fast transactions - remittances Australia - Spain - market case of buying something.
Charles McCathie Nevile: Different use case - I want to mix the sources of payment, don't have anything big enough to cover. Nearly all of that money should get to who I'm trying to pay. How easy/hard is that today - is it important?
USE CASE: Mixed sources of payment for a single transaction, using multiple payments with minimal transaction overhead.
Jörg Heuer: I'm wondering if we're misled about the topics - Credit Cards are great, I can choose to pay much later.
Jörg Heuer: People taking money out is a good thing.
USE CASE: Selection of payment method based upon desired payment speed and cost.
Jörg Heuer: There is innovation there, we need to encourage that - we shouldn't say one way or another. We need a wide variety of things around payment.
Evgeny Vinogradov: Let's talk about small payments - payments should "look" fast. It should seem fast, even if the money moves more slowly. Backend speed doesn't need to increase, front-end speed should only be necessary.
Alexander Gee: We did some studies in the EU - You can't compete against credit card - test groups, active online buyers - speedy debiting was an advantage. Overspending on credit card was a bad thing wrt. customer thoughts.
Alexander Gee: Single transaction would be nice, efficiencies to be driven there.
Connie Theien: On the merchant side - different point that we've heard - merchants need feedback - many retailers have business cycle where they're taking in revenues on weekend. They'll use credit/debit - but they have huge swings in liquidity - big credit facilities to help offset these swings.
Connie Theien: So big input on Thu-Sun, but they don't get money until Tues.
Emil Johansson: Are the merchants willing to pay for earlier service?
Connie Theien: About 1/3rd of consumers say faster payments would be okay if it costs more.
USE CASE: Option to get faster payment if you pay more.
Connie Theien: About 75% of businesses said they'd like that.
Ken Isaacson: It varies by use case - sometimes some of the antiquated systems - ACH - doesn't have any of those features.
Ken Isaacson: So, you need to look at each use case to determine if there is a gap or not.
Charles McCathie Nevile: So, people want a wide variety of options, but asking people what they want doesn't mean that they'll tell you what they need.
Charles McCathie Nevile: What are people already spending their money on in an array of services.
Jeff Jaffe: Jeff, W3C - we've heard a number of different comments on what people would like to see. Some done by companies, some by regulators, innovators.
Jeff Jaffe: What's the role for Web standards - what do panelists want to see in web standards.
Olivier Maas: The trend is to mix payment, shopping experience, first payment provider - Alipay - escrow type of payment - it's cultural. In China, people don't trust seller. Every culture has its own way of making payments.
Olivier Maas: We need to create a basic mechanism that enables all of these use cases happen. We shouldn't focus on commerce use case.
USE CASE: Selection of payment service based upon ability to handle escrow for untrusted merchants.
Olivier Maas: If we try to support all shopping use cases, it won't work.
Harish Natarajan: From a data standards perspective - I think payment systems community is working on it. There are existing standards.
Harish Natarajan: The intent to pay and how to pay is a good area to focus.
Harish Natarajan: The interactions between new payment mechanisms - how do you exchange new payment info.
Michel Leger: Payment is about trust, security, convenience - Web technology should focus on bringing trust/convenience.
Michel Leger: People need to be comfortable w/ payment online. Complexity of payment online - fragmentation of market.
Michel Leger: We want technologies to ease integration of payment w/ nice user experience.
Daniel Appelquist: +1 To focus on trust / convenience
Michel Leger: Web technology is right technology.
Michel Leger: Payments/business integration - payment is separate from everything else business related.
Michel Leger: We want payment to be integrated w/ business application.
Evgeny Vinogradov: The important thing that a standard can bring to us is a good user experience.
Evgeny Vinogradov: Why do they want my phone number to any service that asks for it?
Evgeny Vinogradov: The security mechanics - everyone should be able to implement it.
Joseph Potvin: These standards need to be explicit about rights/responsibilities - what rights do they have? How can one impose stuff on other merchants.
Joseph Potvin: Many merchants complain that many things are imposed on them by credit card companies.
Ken Isaacson: In Australia - they mapped out payments use cases - then made a determination on whether it should be in cooperative space. One potential approach could be to do that. Where is the boundary between cooperative/competitive.
Stan Stalnaker: On the Internet, the things that we now have, like blogs - are along side the media players - we have this whole forest of new things that have appeared. 2005-2015 is happening in finance.
Stan Stalnaker: It's important that we take an open approach to standards.
Louise Bennett: Louise Bennet, BCS - follow up on rights/responsibilities. It's vital from business/consumer perspective - where is the liability. Some of the panel were talking about regulators, when is the regulator going to impose of something on the standard. At what point is a regulator going to say that KYC is required?
Louise Bennett: Do we know what the regulator is going to impose?
USE CASE: Rights & responsibilities of a transaction being associated with the context of the transaction, and conveyed to parties in the transaction.
Erik Anderson: KYC - anonymity is going to be hard to give up - it's going to have to happen - they're going to have to happen. I built a lot of the systems that people in this room works, but before I start building something, I need to know the standards before I do that, though.
Erik Anderson: One person in XRP, another in Bitcoin, how are they going to interchange? Without those standards, we can't build anything on top of them.
Ernesto Jimenez: I see this as where we draw the line wrt. what we can standardize.
Ernesto Jimenez: I'm interested in payments, not necessarily in cryptocurrencies. This is very much aligned w/ Yandex - This is like supporting existing technologies for money - more convenient.
Dave Birch: Anonymity is Evil - so I'm going to agree on that - US printed $22B in non small bills.
Dave Birch: Number of US currency in circulation is very large. If you kick down the door of a mexican drug dealer, you don't find Bitcoin, you find small USD bills.
Bryan Sullivan: Anonymity is evil = cash is evil? Both are suspect concepts IMO, and their equation is suspect squared
Charles McCathie Nevile: I think we need to be aware of the case where I order sushi to my house - it works on a very high-trust system. I fill in a form, sends a form to someone 2km from my house, they bring it to my door, and then they expect me to hand over some cash.
Charles McCathie Nevile: Building systems that ignore that would be bad. Let's not restrict things people are doing. I'd like standards that take a layered approach, there are some basic things we do, and there are some basic things we need (like security) that should be in there from the beginning.
Charles McCathie Nevile: The bottom layer of the standards need to be solid. We want future standards to bild on top of the base layer. We don't want to prevent further standardization. We want competition/innovation to give us more.
Bryan Sullivan: This might be cash being an aspect of anonymity - we're trying to collect use cases.
Dave Raggett: Are zero-trust transactions on the table?
Ricardo Varela: 20% Of electronic transactions in Brazil are done by a printed system - you pay in a bank/shop - 20% of digital transactions are anonymous.
Dave Raggett: Yes, it is definitely on the table, Chaals.
Jörg Heuer: If your technology is based on anonymity, you can still have people identified on layers above. But it is close to impossible to anonymize on higher levels if it hasn't been built in to the system from the ground.
Charles McCathie Nevile: Building regulation into code - we should think about whether we want to deanonymize all transactions immediately - we will create a digital underground mechanism.
Bryan Sullivan: Trying to clarify the sentiment here, it seemed that people are equating anonymity with zero trust, which perhaqps is not necessary, but the role of identity/anonymity of zero-trust transactions is a key question, if that type of transaction is to be on the table as a use case (which I think it should, at least from the perspective of some participants in a transaction, if not all)
Charles McCathie Nevile: Who is tracking my transaction? Can I influence that?
Charles McCathie Nevile: An identity at global scale is a big identity scheme to roll out.
Someone named Sergio made this point: "US printed $27 billion in non-$100 bills, lowest since 1981."
Hannes Tschofenig: When some of you use privacy - and it appears there is a black/white - that's a bad characterization. We need to figure out which player sees what in the transaction.
Sergio added: "So the US is printing record amounts of $100 bills, which are used primarily for criminal purposes"
Bryan Sullivan: Personally I like $100 bills...
Sergio adds: "Ergo the US is in favour of anonymity for criminal transactions but not for legitimate transactions - seems a crazy policy to me."
Stan Stalnaker: A couple of quick points - founding ethos of Web - anyone can contribute. With payments in particular, with identity - it has to be in a careful way so that founding principles can be held in place. We could accidentally put us on the road to totalitarianism, there needs to be constant churn in power structures. We don't want to lock in power structures that are detrimental.
Bryan Sullivan: Though getting change for them is sometimes problematic
Stan Stalnaker: There is much more at stake than just a payment transactions, we need need to preserve human freedom on the Web.
USE CASE: Take the change for your $100 bill through a web payment.
Olivier Maas: Anonymity is meaning less and less - there is room for anonymity. No system has made it through, but we can't wipe it off of the Agenda.
Wendy Seltzer: [For more on anonymity, see Financial Crypto, PETS Symposium]
Clapping to thank panelists and audience, session 1 adjourns.