Web Payments at W3C
Making Payments Easy on the Web
Payment is an essential element of trade and commerce, and the explosion of e-commerce in the last two decades has led to sales on the Web topping $1 trillion in 2012 . However, behind these impressive numbers, the payment landscape is quickly changing, and new challenges are appearing. For instance, the average shopping cart abandonment rate is 72% across all devices, and 97% on mobile. A variety of factors are limiting the potential of ecommerce, from the high level fraud related to credit card payments, to the fragmentation of payment solutions available on the Web but not available on all merchant sites or on all devices.
At the same time, there is a growing interest from businesses to find alternatives to business models based on advertisement. These alternatives include e.g. in-app payments, or micropayments that are today challenging due to a variety of factors such as heterogeneity and number of payment options to support, or the inability for existing payment systems to cope with very small payments.
In order to address these issues, and for greater interoperability in the area of payments, the vision behind this activity is to enable: 1) Users to choose their preferred payment solutions across all their devices; 2) Merchants to transparently support a growing number of payment solutions; 3) Developers to monetize applications more easily; 4) New payment solution providers to enter the market more easily with innovative solutions and payment schemes; 5) Society to decrease online fraud; 6) New payment models such as micropayments & paywalls to take-off.
E-commerce on the Web still increasing, particularly on mobile
Cart abandonment rate on e-commerce sites is very high especially on mobile
A study showed that the average shopping cart abandonment rate is 72% across all devices, and 97% on mobile. A study published by Business Insider in August this year reported that $4 trillion worth of merchandise will be abandoned in online shopping carts this year, and about 63% of that is potentially recoverable.
Online fraud is high, and likely to grow if no increased security for the transactions
The online fraud rate is 10 times higher than the physical credit card fraud rate. In 2012, the card-present fraud rate was 0,09% representing $4 billion out of $4.35 trillion in sales while the online fraud rate was 0,9% representing $1.9 billion out of $220 billion in sales in the US and online fraud is growing at a much faster pace according to FICO. (see references)
More than 264 million people in the world cannot buy on the Web due to interoperability issues
Today, the vast majority of the population in countries in Africa, South and South-East Asia, and Latin America, are not banked but they have access to online payment solutions through mobile money. GSMA estimates that 264 Millions of people have a mobile money account. Due to the lack of interoperability, it is not possible for the vast majority of these potential customers to buy online.
Diverse market players are developing unsuccessfull technical solutions
To address the various issues affecting Web payments, various players, from mobile operators to big Internet companies to banks have tried since a couple of years to develop new approaches based on Digital Wallet. However, due to lack of interoperability, and due to a lack of coordination and cooperation between the various actors involved in the transaction chain, any of the proposed solutions have really taken off.
Merchants and customers are requesting new payments options
There is a growing interest from both merchants and customers to have more flexibility in the way they receive payment or pay. In particular, the role of elements such as loyalty cards or coupons in commerce is important and should be integrated in mainstream payments on the Web.
The Open Web Platform offers tremendous potential as the driver behind the transformation of the Web Payments industry. The platform forms the foundation of how online and in-store payments can be made easy on the Web in the future. To help affected parties shape this transformation and maintain a competitive advantage, we have established the Web Payments Interest Group that focuses on the needs of the various stakeholders involved in Web Payments.
With the creation of the Web Payments Interest Group, W3C has brought stakeholders together to not just face these challenges but to help set the direction in which technological progress is made. While the groups do not create Web specifications directly, the expertise of the members will result in requirements for the relevant existing Working Groups or the creation of new specific Working Groups.
Now is the time you can influence how Web Payments evolve.
More and more banks, finance processors, finance regulators, card networks, e-commerce companies, telecom operators, multiple service operators (MSOs), hardware vendors, browser and software vendors and other participants are shaping the way Web Payments are developed on the Web.
Web Payments Roadmap
The Web Payments Interest Group is expected to develop a roadmap on Web payments that will identify and review existing, relevant technical standards for payment systems in terms of e.g. risk management and governance; Identify existing and possibly future issues and challenges of Web payments, from technical and business perspectives; Identify a set of scenarios that are in the scope of Web Payments work, including payments in brick and mortar stores with mobile devices, off-line payments, micro-payments, integration of issues such as “floor-limits” and “stand-in” for specific transaction scenarios, etc.
These scenarios will highlight the interfaces between payment systems and applications as well as the complete transaction flow.
The topic of Wallet is one of the core elements of the Web Payments Interest Group. The work in this area consists of identifying the role and the place of a digital wallet in the payment process in the different scenarios identified in the roadmap (e.g. online and onsite payments). This includes the investigation of Wallet at the customer end as well as at the merchant end (connected to merchant's checkout/payment option). The objective is to define an open framework that encourages innovation in digital wallets and leverage interoperability with merchant sites. The expected output includes the identification of the functionalities of wallets and the interactions with the different stakeholders, the identification of needs for standards, and the identification of requirements to enable integration of new payments schemes and ancillary services, such as loyalty cards or coupons.
Identity, Authentication, and Security
The Web Payments Interest Group identifies and reviews existing, relevant technical standards for authentication, secure transactions and identity provision and identify potential improvement to Web user-agents to enable improved authentication using various technologies from multi-factor authentication to secure-elements, to smartcard-based authentication.