Interledger Payments

Goals

The Interledger Protocol (ILP) is a mechanism by which payments can be made between any two entities irrespective of the payment networks they are connected to or the ledger systems upon which they hold their accounts.

The goal of the ILP activity within the Web Payments IG is to propose new standards development work that should be undertaken by a Working Group to enable Interledger Payments on the Web.

Problem Statement

• For a payer to make a payment to payee today requires that the two parties establish a common payment network to facilitate the payment.
• Payment networks traditionally have a common technical foundation upon which legal and regulatory systems are established to protect the interests of all stakeholders.
• Traditionally the underlying payment infrastructure introduces risks arising from non-performance of any counterparty which must be mitigated in the legal and regulatory layers of the system.
• ILP attempts to address some of these risks at the infrastructure layer so that the legal and regulatory layers above can be more flexible and the system itself is more open.

Deliverables

ILP has a number of building-blocks which require standardization for the protocol to gain wide adoption.

@@IJ: the sections below I presume are deliverables of the CG or ultimately a WG. What are the deliverables of this task force? What about a WG Charter?

Conditional Transfers

Most crucial of these is the ability for any ledger to be capable of executing **conditional transfers**. A conditional transfer is a transfer between two accounts on the ledger that was escrowed at the request of the sending account holder and released, upon presentation by the receiving account holder, of a receipt that proves a predetermined condition has been met.

For the receipt that is exchanged between participants to be usable by any ledger system the format of this receipt should be standardized.

While the integration into a ledger will predominantly be done by a connector and may be entirely proprietary, it may be useful to standardize a high level process flow for conditional transfers and also define a standard API for these using Web technologies.

Connector Query Interface

The entities that facilitate payments between two ledgers are connectors. These entities hold accounts on both ledgers and offer an exchange between the two. This spread, as well as the characteristics of the connector are what differentiates one connector from another that is able to facilitate a payment between the same two ledgers.

To allow participants to evaluate the payment paths available to them it will be valuable to have a common interface to connectors from which the available spreads and other characteristics of the connector can be queried.

Dependencies

The majority of the work on Interledger is being done in the Interledger Payments Community Group.

Success Criteria

• Establishing a standard for conditional payments including a published technical recommendation and at least two implementations
• Publishing a standard for a connector query interface and reference implementation code

Concerns

None at this time.

Milestones / Timelines

TBD