Payment Negotiation: JEPI

After 18 months of tracking and studying the work in the electronic commerce community, W3C joined forces with CommerceNet to address an area that we believe will be critical to the growth of commerce on the Web by the 1997 Christmas season. This is the time between shopping and payment, when the mechanism for payment is chosen. In the real world, there is a complicated process which takes place as indicated by the following scenario:

You approach the cash register and see decals indicating that the merchant will accept payment by MasterCard and Visa. It is, of course, understood that you can pay in the local currency. You ask whether the merchant will accept a check and they tell you that they do not, unless you have a check guarantee card that you do not own. So you ask if they will accept American Express. They admit that they do, but then reveal that they will give you 2% off if you use MasterCard or Visa; or 5% if you pay cash. You decide to pay cash, but ask if there is a discount for AAA members. They admit that there is, but not on top of the 5% cash discount. But they do give United Airlines Frequent Flyer Miles.

This is, admittedly a bit more complicated than usual for consumer payment. It is, however, very similar to negotiations that happen in inter-corporate purchasing arrangements. The JEPI project is intended to enable "automatable payment negotiation," where the computers perform some negotiation (finding out what capabilities they have in common) and the user makes the final selection decision. Technically, it hinges around creating specifications for a pair of negotiation protocols

  1. A general purpose negotiation protocol based on PEP (Protocol Extension Protocol). This allows a Web client and server to ask one another what extension modules they support, negotiate parameters for these extensions, and ask the other end to commence using an extension if possible. This work is being folded into the specifications of HTTP 1.2 through the IETF processes.
  2. A specific extension module, UPP (Universal Payment Preamble), used to negotiate over the payment instrument (check, credit card, debit card, electronic cash, etc.), brand (Visa, MasterCard, American Express, etc.), and payment protocol (SET, CyberCash, GlobeID, etc.). This work is being done primarily in the JEPI project, but will probably be turned over to another party for formal Standardization when the project is complete.

JEPI was originally envisioned as a six month project, with eight participants (two each for Web servers, Web browsers, payment systems, and merchants). This proved to be overly ambitious, and the first demonstration of the JEPI technology is expected in mid-November 1996, one year after the project was first launched. Instead of eight participants distributed as expected, the project team consists of:

Browser vendors. Microsoft.
Server vendors. IBM and Open Market.
Payment systems. CyberCash and GCTech
Merchants. Xerox and British Telecom.
Additional Design Input. Digital Equipment Corporation and VeriFone.

As a result of feedback from the initial project, we expect a second phase to begin early in 1997. The detailed design of the second phase has not yet begun, and will be undertaken with advice from the newly elected Process Editorial Review Board. At this time, we expect that the second phase will try to meet four major goals:

  1. Encompassing a larger number of payment systems, including direct billing systems, electronic cash, micropayment, and electronic checks.
  2. Incorporating hardware security tokens (smart cards or PCMCIA cards).
  3. Establishing common APIs. This was not done in the initial project because of both time constraints and the lack of multiple browser implementations.
  4. Involvement by a larger number of European and Japanese companies, as well as serious interaction with the financial services industry. We expect this to occur partly because of the interest generated by the original project, but also largely because the second phase is more clearly scoped and will be structured to allow for serious input from users of technology in addition to the creators of the technology.