Web Payments at W3C
Making Payments Easy on the Web
Payment is an essential element of trade and commerce, and "digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015. 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 69% across all devices, and even higher 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
Gartner predicts that "by 2017, US customers' mobile engagement behavior will drive mobile commerce revenue to 50 percent of u.s. digital commerce revenue." The trends are similar worldwide, and mobile commerce is gaining on other forms of ecommerce. What do we need to do to make Web payments easier on mobile devices?
Cart abandonment rate on e-commerce sites is very high especially on mobile
A review of cart abandonment studies suggests the average shopping cart abandonment rate is around 69% across all devices, and higher on mobile devices. A study published by Business Insider in August 2014 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. According to a 2015 Lexis Nexis study, annual fraud costs reached $32 billion in 2014, a 38 percent increase over 2013. Online fraud is growing at a much faster pace according to FICO.
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 million 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.
In addition to the Web Payments Working Group (WPWG) and Web Payments Interest Group (WPIG), a number of groups at W3C —both formally chartered groups and community-driven initiatives— are doing work at W3C directly related to payments, or that will improve the Web overall including payments. Below we list some of these groups. Please note that Community Groups are not formally chartered W3C groups; they are community-driven discussions some (but not all) of which may lead to W3C standardization efforts.
Furthermore, the Web Payments Interest Group is gathering use cases, including through discussions with other W3C groups (e.g., automotive, Web of Things).
- Web Payments Community Group, which holds pre-standards discussions around Web Payments topics. The Community Group has proposed work to the Web Payments Working Group.
- Web Platform Incubator Community Group, which provides a lightweight venue for proposing and discussing new web platform features. The Community Group has proposed work to the Web Payments Working Group.
Identity / Verifiable Attributes
- Credentials Community Group, which discusses credential storage and exchange systems for the Web. Some of their ideas are being discussed in the Web Payments Interest Group via the Verifiable Claims Task Force (as of January 2016).
- Web Cryptography Working Group, which is defining an API that lets developers implement secure application protocols on the level of Web applications, including message confidentiality and authentication services, by exposing trusted cryptographic primitives from the browser.
- Web Application Security ("WebAppSec") Working Group, which is developing standards to ensure that Web applications are delivered as intended, free from spoofing, injection, and eavesdropping.
- Web Authentication Working Group (PROPOSED DEC 2015), chartered to reduce the use of shared secrets, i.e. passwords, as authentication credentials, facilitating instead multi-factor authentication support as well as hardware-based key storage while respecting the Same Origin Policy.
- Hardware Security (HaSec) Working Group (IN DISCUSSION), which would develop hardware-based web security standard APIs to provide Web Applications with access to secure services enabled by hardware modules.
Clearing and Settlement
- Interledger Payments Community Group, which seeks to connect the many payment networks (ledgers) around the world via the Web. The group's vision is an open, universal payment scheme built on Web standards that allows any payer to pay any payee regardless of the payer's choice of payment instrument or the payee's account.
- Financial Industry Business Ontology (FIBO) Community Group, which is developing extensions to schema.org related to financial industries.
- Web Bluetooth Community Group, which is developing a specification for Bluetooth APIs to allow websites to communicate with devices in a secure and privacy-preserving way.
- Web NFC Community Group, which is creating a Near Field Communication API that is browser-friendly and adheres to the Web's security model.
- W3C Payments Seminar (Tokyo, Nov 2015)
- Face-to-face meetings (TPAC Sapporo, Oct 2015)
- IG Face-to-face meeting (New York, June 2015)
- IG Face-to-face meeting (Utrecht, Feb 2015)
- IG Face-to-face meeting (TPAC Santa Clara, Oct 2014)
- Web Cryptography Next Steps Workshop (Mountain View, Sep 2014)
- Web Payments Workshop (Paris, March 2014)