W3C For Immediate Release

W3C Launches Web Payments Initiative

Opportunity for Industry to Reduce Fraud, Improve Usability, and Encourage Innovation



15 October 2014 — The World Wide Web Consortium (W3C) announced today a new initiative to integrate payments seamlessly into the Open Web Platform. W3C calls upon all industry stakeholders —banks, credit card companies, governments, mobile network operators, payment solution providers, technology companies, retailers, and content creators— to join the new Web Payments Interest Group and leverage the unique ability of the Web to bridge ecosystem diversity and reach users everywhere, on any device. The result will be new business opportunities, an improved user experience for online transactions, reduced fraud, and increased interoperability among traditional solutions and future payment innovations.

"The Federal Reserve is working with diverse participants and organizations to improve the payment system in ways that make it safer, faster, more efficient and accessible for everyone," said Claudia Swendseid, Senior Vice president at the Federal Reserve Bank of Minneapolis. "We appreciate W3C's efforts in this regard and look forward to participating in the new Web Payments Interest Group."

Big Challenges, but Big Potential for Global E-Commerce

E-Commerce is thriving and predicted to reach $1.471 trillion this year, an increase of nearly 20% from last year. According to Forrester research, one third of those transactions will take place on a mobile device. And yet, a number of obstacles stand in the way of even stronger growth on those devices.

The first is usability. People shopping online add to their shopping carts, but they rarely complete their purchases. Small screens and small keyboards, combined with the usual requirement to create an account and share personal information with unknown merchants are some of the reasons that the average shopping cart abandonment rate is 97% on mobile devices.

A second reason is fraud. High-profile stories of massive credit card number theft have demonstrated both the inadequacy of today's approaches to sharing sensitive information and their high cost. The rate of fraud in "card not present" transactions (such as those common for transactions via Web sites) is 10 times higher than that when physical cards are used. These risks must be addressed if online commerce is to flourish.

"Today, payment details being stolen has outpaced all other consumer concerns worldwide to shop on-line," said Michel Leger, Ingenico Group. "Bringing together all stakeholders into this Interest Group is the opportunity to create open standards that will minimize online fraud, increase consumer confidence and improve shopping experience. Working all together will enable us to do it right."

Because the Web is so widely available, strengthening support for payments has the potential not just to improve usability and reduce the risk of fraud, but also to create new opportunities for businesses and consumers in areas such as coupons and loyalty programs and crypto-currencies. Through mobile applications, the Web can also make "brick and mortar" transactions more secure and convenient. Although we are seeing innovation in mobile payment systems, the lack of standards makes it more difficult to adapt to new payment approaches (e.g,. crypto-currencies) or new payment providers. Fragmented regulatory environments further complicate the payments landscape.

Integrating Payments into the Open Web Platform

To deepen our understanding of these challenges and integrate solutions into Open Web Platform, W3C has chartered a Web Payments Interest Group, chaired by Erik Anderson (Bloomberg) and David Ezell (Association for Convenience & Fuel Retailing).

Global stakeholders from all parts of the industry will enumerate use cases and scenarios, for topics such as online payments, off-line payments, "floor-limits," the role of regulations on technology, international low-value remittances, general retail payments, bill payments, and utility payments. The group will study the current gaps in Web technology regarding usability, security, and privacy, and recommend new work to fill those gaps. Because a successful integration of payments into the Web requires extensive cooperation, the Interest Group will also liaise with other organizations in the payment industry that are using Web Technologies to foster alignment and interoperability on a global scale.

The Interest Group will first focus on digital wallets, which many in industry consider an effective way to reduce fraud and improve privacy by having users share sensitive information only with payment providers, rather than merchants. In addition, wallets can simplify transactions from mobile devices and make it easier to integrate new payment innovations. To be successful, all parties involved in a transaction must agree to use the wallet system, but systems to date have not demonstrated the level of interoperability required for broad adoption. Lack of standards for processing payments makes it difficult to implement wallets and gain the benefits of automation. While the Web Payments Interest Group is not chartered to develop new payment methods, it will create a framework to ensure that Web applications can interface in a standard ways with all current and future payment methods. Mobile use cases play an important role in this work, but the framework will encompass the full range of devices people use for online payments.

The new Interest Group will be the focal point for W3C's work on Web payments, but discussions have happened and will continue to happen in many venues within W3C, including:

Learn more about W3C's work on Payments on the Web, supported in part by the European Union through the HTML5Apps project.

About the World Wide Web Consortium

The World Wide Web Consortium (W3C) is an international consortium where Member organizations, a full-time staff, and the public work together to develop Web standards. W3C primarily pursues its mission through the creation of Web standards and guidelines designed to ensure long-term growth for the Web. The Open Web Platform is a current major focus. Over 400 organizations are Members of the Consortium. W3C is jointly run by the MIT Computer Science and Artificial Intelligence Laboratory (MIT CSAIL) in the USA, the European Research Consortium for Informatics and Mathematics (ERCIM) headquartered in France, Keio University in Japan, and Beihang University in China, and has additional Offices worldwide. For more information see http://www.w3.org/

Media Contacts

Ian Jacobs, <ij@w3.org>, +1.718.260.9447

Testimonials from W3C Members

Bloomberg

We are entering a transformational moment in time in the field of payment technologies as there are more options then ever offering frictionless & borderless transactions. Adapting existing payment standards, as well as old and new technologies to work in a browser environment will help connect more than 1 billion people to the "Internet of Money." We must work together to achieve this goal and make a difference for everyone. Bloomberg is a proud supporter of these efforts.

Justin Erenkrantz, Head of Compute Architecture at Bloomberg

Gemalto

We are pleased to support W3C's initiative as this will boost and facilitate online digital payments by providing a smooth & secure integration of payment functions within web merchants' portals. Our solutions encompasses mobile Payments, mobile Banking and Mobile ID, across a comprehensive portfolio of devices and multiple security frameworks.

Philippe Cabos - Product Director - Mobile Wallet & Secure Applications at Gemalto

GRIN Technologies

The exponential growth in online payments is only exceeded today by the growth in connected devices. GRIN Technologies, Inc, the Connected Life Company, is pleased to participate in the future development of Web Payments standards at W3C and are looking forward to working with others to create the digital wallet of the future. We recognize the challenges and welcome the opportunity to participate in the development of a healthy, secure payments ecosystem, enabling a future where everyone's life is connected.

Daniel Austin, CEO & Founder, GRIN Technologies, Inc.

Ingenico Group

Payment is all about security, universality and increasingly cross channel - in store, on line and mobile. Our new OS is the place where security and open world meet. Web-based technologies are the backbone of tomorrow’s payment eco-system, enabling consumers to enjoy a seamless, open whilst secure, purchasing experience. We look forward to actively participating in the new Web Payments Interest Group, leveraging on our 30-year expertise in payment services.

Michel Leger, Executive Vice President Global Sales, Strategy and Marketing

NACS

W3C serves a critical role in defining the future of commerce - both online and on the go," says Gray Taylor, Executive Director of PCATS, the Convenience and Petroleum Industry's technology organization, and Payments Consultant to the National Association of Convenience Stores (NACS). "The importance of mobile commerce to our membership motivates us to support the efforts of W3C in payments, and we will continue to do so. The Web Payments Workshop was a great example of how W3C can use its well-known brand to bring together the industry thought leaders to solve hard problems on the web, and the creation of the new Web Payments Interest Group is essential to carry the momentum forward. W3C's IP policy and focus on open and transparent standards will enable the consumer to have a feature rich and consistent experience as mobile commerce evolves, and we at PCATS and NACS are excited to continue participation in this valuable work.

Gray Taylor, Executive Director of PCATS, the Convenience and Petroleum Industry's technology organization, and Payments Consultant to the National Association of Convenience Stores (NACS)

Rabobank

As an innovator in the payments industry, Rabobank is well aware of customer needs for web payments. If standards are drafted from either a customer, a technology or a retail perspective only, they would be lacking many ingredients to be a global success for all customer segments and service providers worldwide. Therefore, it is important for Rabobank and for many banks for that matter, to be involved in this process at W3C from the beginning.

Evert Fekkes, Business Information Manager, Rabobank Nederland

Yandex (English)

We sat down with the major players in the Russian payments market to discuss the idea of the emerging standard that the W3C is going to start developing and we received a lot of positive responses. The emergence of a unified set of rules is an important issue for businesses, who waste lots of resources every time they want to integrate with new payment solutions. The lack of industry standards also hinders the development of payment projects that are truly 'cross-border'. A unified standard for online payments would help reduce risks associated with fraud, save businesses time and resources wasted on technical integration, lay the groundwork for entirely new products, and make sending and receiving payments online as easy as sending and receiving email thanks to 'mailto'.

Evgeny Vinogradov, Head of Analytic Services at Yandex.Money

Yandex (Russian)

Мы обсуждали с крупнейшими игроками российского платежного рынка идею появления единого стандарта, который сейчас будет разрабатываться в W3C, и получили много позитивных откликов. Появление единых правил для онлайн-платежей – насущный вопрос для бизнеса, которому каждый раз приходится преодолевать сложности интеграции различных платежных решений, из-за чего появление по-настоящему трансграничных платежных проектов затруднено. Единый стандарт для онлайн-платежей поможет снизить риски мошенничества, сократить время и затраты на техническую интеграцию, создать почву для появления принципиально новых продуктов и сделать отправку и получение денег в интернете таким же простым, как отправка и получение почты благодаря «mailto».

Евгений Виноградов, руководитель отдела аналитических сервисов Яндекс.Денег