Organizing Web Payments Use Cases

Ian Jacobs

Copyright © 2015 W3C ® (MIT, ERCIM, Keio, Beihang)

Organizing Web Payments Use Cases



Scope of This Model

Key Terminology (1)

An exchange of value (here, "Funds").
Activities surrounding and including a Payment (e.g., discovery of an offer, negotiation of terms, selection of Payment Instrument(s), delivery, etc.).
The source of funds in a Payment. In this deck, primarily a Consumer.
The recipient of funds in a Payment. In this deck, primarily a Merchant.

Key Terminology (2)

Payment Scheme (also just "Scheme")
A set of rules and technical standards for the execution of Payments that have to be followed by Payers, Payees, and the institutions that support them. Examples: Visa, Mastercard, Bitcoin, PayPal, ACH, SEPA.
Payment Instrument (also just "Instrument")
A mechanism that follows a particular Payment Scheme. Examples: corporate Visa card, personal Visa card, a bitcoin account, a PayPal account.
Payment Processor
The entity (or entities) that carry out the Payment according to the relevant Scheme. Examples: Stripe,, Atos, FedACH.

Four Phases

  1. Negotiation of Purchase Terms
  2. Negotiation of Payment Instruments
  3. Payment Processing
  4. Delivery of Product/Receipt

Each Phase Has Multiple Steps

Steps for Negotation of Purchase Terms

Steps for Negotation of Payment Instruments

Steps for Payment Processing

Steps for Delivery of Product/Receipt

Phases and their Steps Summary

@@Diagram to be updated since now have more phases and steps@@

Each Step Has Multiple Use Cases

P1: Discovery of Offer

  1. Different Contexts
    • From a Web site
    • Within a mobile application (Web, Native, or Hybrid) such as an in-app payment.

P1: Agreement on Terms

  1. Degrees of Knowledge about Customer Identity
    • Payer must share real world identity
    • Payer must share some (possibly virtual) identity
    • Payer is pseudonymous (e.g., through token)
  2. Frequency Variation
    • One-time payment
    • Subscription / recurring purchase (with fund limits)
  3. Machine-readable negotiation.

P1: Application of Marketing Elements

  1. Parametric for recommended instrument.

P2: Selection of Payment Instruments

  1. Manual selection
    • Number of Payment Agents
    • Number of Payment Instruments
    • Coupon and Non-Coupon cases

P2: Selection of Payment Instruments (Continued)

  1. Assisted Selection
    • Transaction fee optimization
    • Default / automatic selection of Payment Instrument
    • Preferential display of Payment Instrument options
  2. Selection Context (Payer-side, Payee-side)

P3: Initiation of Processing

  1. Payer-initiated processing
  2. Payee-initiated processing

P3: Verification of Available Funds

  1. Proof of Funds
  2. Proof of Hold

P3: Authorization of Transfer

  1. Proofs / Guarantees
    • Of Payment
    • Of Instrument (Hold/Possession)
    • Of Funds in Escrow
    • Of Funds Transfer by Payment Processor
  2. Immediate Access to Funds

P3: Completion of Transfer

  1. Delay Variation
    • Nearly immediately (e.g., credit card since brand assumes risk, PayPal, Ripple, Bitcoin)
    • After several days (e.g., 3-7 for ACH, SEPA)

P4: Delivery of Receipt

  1. Frequency variation
    • One-time digital proof of purchase
    • Recurring receipts after recurring payments

Steps Without Use Cases (in this deck)

Complementary Materials for Payment Professionals

Next Steps if Supported

Still Todo

Person-to-Person Phases?

  1. Input of Transfer Terms (amount, currency, Payee identity)
  2. Negotiation of Payment Instruments (bitcoin, mpesa, wechat)
  3. Funds Transfer
  4. Acknowledgment of Transfer (aka the receipt)

Privacy Considerations