Web Commerce Interest Group

X9 August Newsletter features W3C Payments Work

Posted on September 7, 2016 by David Ezell

The payments industry is changing rapidly: on the one hand, existing mechanics are being reworked to embrace new use cases, while on the other new technologies such as tokenization and mobile payments are emerging. Industry professionals are beginning to recognize the importance of the work of the Web Payments groups at W3C. While electronic payments are certainly not a new thing, Web Payments is being recognized as part of the overall payments processing standards picture.

Understanding between established payments groups and the W3C payments groups is important. Targeting our payments colleagues in the United States, the X9: August Newsletter features a discussion of W3C and a very broad picture of what Web Payments is about. And for those of us in W3C, the newsletter also gives a synopsis of ongoing X9 activities in both the payments and near-payments space.

X9 is the accredited group from the United States that provides representatives to the International Standards Organization (ISO). ISO has been establishing standards and practices in payments for decades, for example ISO20022, ISO8583, and more recently ISO12812 (Summary by Alan Thiemann).

Web Payments Interest Group sees Standardization Opportunities: Blockchains, Claims, and Loyalty

Posted on July 31, 2016 by David Ezell

The Web Payments Interest Group met at MIT on July 1, 2016, discussing near-term opportunities for standardization, moving important new work forward and reviewing exciting future possibilities and challenges in the world of Web Payments.

The Mission of the Web Payments IG is to perform a steering function for Web Payments at W3C. The IG helps identify standardization opportunities to improve payments on the Web. One way that it does so it by helping to identify standardization work that will improve e-commerce for all users and stakeholders, particularly buyers and sellers in payment transactions. To this end, the IG tracks industry trends and standards, and identifies new potential work from emerging requirements.

Some of the highlights of our discussions at MIT:

Blockchains and related topics from the “Blockchains and the Web” workshop that took place the day before the IG meeting. Although the Blockchain Workshop agenda did not focus on payments use cases, the IG has discussed blockchains previously and discussed potential overlap with other user cases.
An Interledger Payments (ILP) Community Group report provided the Interest Group with an update about the CG’s progress in developing a protocol to facilitate payments across disparate payment systems.
Digital Offers have gained new focus from IG membership. From a merchant perspective, digital offers are an important marketing aspect for any payment system. We heard about use cases from the retail industry, as well as work already underway on digital offers in the “mobile space.” The IG decided to form a task force that includes additional industry experts to: 1) consider additional use cases and 2) potentially charter a Community Group to further incubate the ideas, attempting to identify commonalities and synergies between payments and digital offers that can lead to further standardization.
Verifiable Claims has been one of the most active work items on the IG’s agenda. The Verifiable Claims Task Force presented their findings: W3C management should consider taking this work to the W3C Membership as a proposal for a Working Group. The task force’s supporting work includes use cases, a proposed data model plus a high-level architecture, a “primer”, a FAQ, commitments to the work, and a draft charter for the proposed Working Group. The Interest Group accepted the findings of the task force, and resolved to request that W3C management propose a draft charter to the Membership.
We discussed improving the Interest Group’s process of transitioning technologies from discovery to incubation to standardization. The group’s focus was on making the process more effective and responsive to the needs of our membership.

In addition to these topics, the chairs shared the results of IG input which showed continued interest in a number of areas, including:

Making sure security/identity practices on the Web fulfill the needs of payment. The approval of the Verifiable Claims work is one indicator of this interest. While any standardization work would probably be done in other segments of the W3C, the IG has indicated a continuing wish to stay focused and knowledgeable, contributing when necessary.
Investigate further additional topics such as micropayments, B2B, and M2M payments.
Monitoring of industry regulatory requirements such as PSD2 (Europe).
Monitoring the work of related payment standards such as ISO20022 and ISO12812[11], including discussions of terminology alignment.

The Interest Group welcomes new participants to ensure that we are representing diverse industry and regional needs. Our next face-to-face meeting will take place in Lisbon 22-23 September during W3C’s TPAC. Face-to-face meetings are a great opportunity to get involved, so please contact the W3C staff if you are interested. If the logistics allow, we hope to see you there!

Web Payments Interest Group Face-to-Face in Boston

Posted on May 26, 2016 by Ian Jacobs

The Web Payments Interest Group is planning its next Face-to-Face meeting in Boston on 1 July. For the next several weeks the group will build its agenda. The meeting follows the 2-day W3C Workshop on Blockchains and the Web, which is open to all.

As Fraud moves to the Web, Web Payments Gains Visibility

Posted on November 20, 2015 by David Ezell

NACS Daily reported today that Card-Not-Present Fraud Jumps 30%, according to BankInfo Security. This increase in fraud on the web and in other CNP situations has been long predicted: as EMV is deployed in card present scenarios, fraud will move inevitably to more vulnerable targets. The retail industry is beginning to see that the Web Payments Activity is working to provide solutions.

NACS (the Association for Convenience & Fuel Retailing) is a W3C member.

Sapporo Meeting of the Web Payments Interest Group

Posted on November 9, 2015 by Ian Jacobs

The Web Payments IG met 26-27 October in Sapporo as part of W3C’s annual TPAC meeting. We had strong attendance and discussed results after our first year, as well as next priorities. A meeting summary includes synposes of our discussions and links to presentations.

We plan to focus on the following topics over the next few months, developing proposals that I expect we will discuss at our next face-to-face meeting currently planned for the end of February 2016:

Identity and Credentials
Interledger payments
Ecommerce
Security needs (e.g., beyond the strong authentication working groups in development)
Relationship to ISO work, especially ISO20022
Reviving the Capabilities document effort

Many people in the Interest Group also participated in the first meeting of the Web Payments Working Group.

W3C Launches Web Payments Working Group

Posted on October 21, 2015 by Ian Jacobs

In August I wrote a post on the W3C Advisory Committee Review of a draft charter authored by this IG for a new Working Group. Today, W3C launched the Web Payments Working Group to make payments easier and more secure through standard APIs that will help streamline the checkout process.

The group first meets next week at TPAC 2015, as does this Interest Group. The Working Group will be looking at initial proposals and devising its initial work plan. The Interest Group will be exploring input from a variety of stakeholders and seeking consensus on what topics may be the next candidates for standardization. I’ll post again after the meeting with the results!

We welcome you to get involved with the Web Payments Working Group!

Web Payments Working Group Charter In Review

Posted on August 5, 2015 by Ian Jacobs

Today the W3C Membership began review of a draft Web Payments Working Group Charter. The review ends 15 September, and if all goes well, the group will launch by the end of September and will really get down to work when they meet face-to-face during TPAC 2015.

The charter reflects decisions made by the Web Payments Interest Group in June. It has been refined since then through review by the Interest Group and W3C management to sharpen the definitions, scope, and deliverables.

In the proposed Web Payments API specification, the Web Payments Working Group will standardize a set of messages and a message flow for the initiation, confirmation, and completion of a payment. The specification will encompass two steps that are common in many eCommerce payment scenarios:

Payment initiation: The merchant (payee) communicates information about the “offer” and accepted digital payment schemes to the payer via a Web application. If the customer (payer) wishes to accept the offer, the payer selects a digital payment instrument from the payer’s digital wallets that is compatible with what the payee accepts, and agrees to pay.
Payment completion: Payment processing then happens, either on the payee side or the payer side depending on the selected digital payment instrument.

The Working Group is not creating any new digital payment schemes, but rather integrating existing and emerging schemes more efficiently and securely into Web applications. A standardized message flow should make it easier to automate payments, which will improve the overallsecurity and user experience of making payments on the Web.

The Interest Group has published a FAQ with more information about the anticipated benefits of the future standards, a diagram illustrating the high-level message flow, and some examples of how different payment approaches can be addressed through this flow.

The Web Payments Interest Group also updated its Web Payments Use Cases 1.0 Working Draft one week ago. Now that the Interest Group has successfully delivered a draft charter for review, it will shift discussion to an overall Web payments architecture and prepare key topics for its next face-to-face meeting in October.

Payments Charter Progress and Roundtable Roundup

Posted on June 26, 2015 by Ian Jacobs

The Web Payments Interest Group is close to reaching agreement on charter text for a Working Group that will develop W3C’s first Web payments standards. The current plan is for the Membership to review a draft charter in August, for W3C to launch the Working Group in September, and for participants to first meet face-to-face in October during W3C’s TPAC 2015 meetings in Sapporo, Japan.

A primary role of the Web Payments Interest Group is to gather industry use cases and requirements, analyze what standards (existing or not) would contribute to satisfying those use cases, and where necessary, spawn Working Groups to develop those standards. To that end, the group published a draft set of use cases in April. Since then, the group has identified a set of technical capabilities needed to fulfill those use cases, and discussed charters for groups to develop specifications for those capabilities.

Last week approximately 40 people from the Interest Group met in New York, hosted by Bloomberg, to review and prioritize the use cases and determine the level of consensus to standardize the following capabilities: payment scheme integration into the browser, strong authentication, strong identity and credentials, and settlement. It was tremendously useful to have developers in the room from browser vendors, merchants, telcos, banks, and payment service providers to walk through payment flows and prospective APIs and data formats.

After 2.5 days, we reached the following conclusions:

There was consensus for a new Payment Architecture Working Group that would facilitate integration of current and emerging payment schemes into the browser. The initial scope will be limited to what is necessary for a “minimum viable payment.” A draft charter is still in discussion but the group reached consensus on a set of use cases that the charter should address.
The Interest Group also discussed plans for two authentication-related Working Groups whose charters are in development within the W3C Team. One will focus on secure authentication of entities (users, systems and devices) to enable high-security Web applications; this group would be launched in collaboration with the FIDO Alliance. The second will work on a set of Hardware-Based Web Security standard services providing Web Applications usage of secure services enabled by hardware modules (TEE, secure elements, and other secure enablers). The Interest Group will provide input to those groups based on payments requirements.
The Interest Group did not reach consensus to launch a Working Group on Identity and Credentials (see credentials agenda plan). We expect to continue to reach out to (international) stakeholders in the financial services, education, and healthcare industries to bring more use cases to the table.
The Interest Group discussed a proposal from Ripple Labs to create a Settlement Community Group to explore how to use the Web as a means to bridge disparate payment networks and move toward a distributed settlement paradigm.

A meeting summary provides more detail and includes links to the full meeting minutes (to be made public on 29 June).

Industry Feedback at Roundtable

Given our proximity to Wall Street, we decided to organize an industry Roundtable as the last session of the face-to-face meeting. We solicited feedback on the Interest Group’s plan and discussed priorities and direction with numerous financial services organizations (some in the Interest Group, some not):

American Express
Apple
Barclays
Bill & Melinda Gates Foundation
Bloomberg
BPCE
Camara Interbancaria de Pagamentos (CIP)
Canton Consulting
Capital One
Citi
City of New York
Deutsche Bank
Deutsche Telekom
Digital-Bazaar
Dwolla
Electronic Transactions Association
French Treasury Office
Gemalto
Google
GS1
GSMA
HSBC
Knowbility
MasterCard
Monegraph
Mozilla
NACHA
NACS
NIC.br
Oracle
PayGate
R3CEV
Rabobank
Ripple Labs
Target
Santander
SWIFT
US Federal Reserve
Visa
Wells Fargo
Worldpay

Among the topics discussed:

The Interest Group’s strategy is to focus initially on a simple payment scenario. This will be the basis for future work on the broader topic of ecommerce (e.g., loyalty programs and coupons).
Roundtable participants emphasized the need for solutions to manage identity, authentication, and authorization. They cited a spectrum of identity needs for different types of transactions, including anonymous (for cash-like transactions) to strong identity necessary to satisfy know-your-customer and anti money laundering regulation. It was pointed out that improved standard authentication techniques may ultimately lower regulatory cost.
Participants recognized consumer protection and online privacy as important requirements. It was pointed out that some authentication approaches can improve privacy if the minimum information necessary for a transaction is shared only with the necessary parties.
We discussed several use cases that may be added to the Interest Group’s list, including the Brazilian Boleto (and analogous instruments elsewhere in Asia and Europe), payments to multiple parties, subscriptions, and smart contracts.
There was some discussion about the value of Web payments standards to foster innovation (and thus lower costs for consumers and merchants through competition), and simplify and secure the user experience, (and thus lower the rate of shopping cart abandonment).
Although the Interest Group’s initial focus has been basic ecommerce interactions, there was also interest among Roundtable participants in mobile peer-to-peer payments, especially to empower unbanked populations.
Many participants expressed the importance of alignment with existing ISO and other international standards to encourage interoperability end-to-end.

Next Steps

The top priority for the next few weeks will be for the Interest Group to incorporate changes into the draft Payment Architecture Working Group Charter and prepare for Membership review of the charter.

The Interest Group will also continue:

to identify the next set of standardization priorities for topics such as identity and credentials, security, and Web settlement. This includes working to bring stakeholders on board to contribute use cases and advance the work.
to flesh out a description of a payments architecture and a set of modular capabilities that can be composed to fulfill a variety of use cases.
to formulate detailed requirements (based on analysis of use cases and capabilities) as input to various W3C Working Groups.
to liaise with other organizations, understand relevant standards, and encourage alignment with those standards.

We have much to do and need more people to get involved to advance the work at the pace that industry demands.

Building the Value Web with Open Standards

Posted on April 28, 2015 by Evan Schwartz

The Value Web

Today’s payment networks are disconnected and far from interoperable. We can move money within a bank, within one card or peer-to-peer network, or within some countries with relative ease. But try sending an international payment, or settling across networks, and it will take days or cost a small fortune, if it’s possible at all.

The Web can fix this problem. Originally designed to link disparate document systems housed in universities, the Web is the great connector. Information travels across the world in fractions of a second; why isn’t the same true for money? As one of the main standards bodies for the Web, the W3C has a massive opportunity to use the Web’s technologies and connectivity to bring interoperability to payments.

The W3C’s Web Payments Interest Group is discussing two approaches for improving the user experience, speed and security of payments.

The first approach, which has been the primary focus of the Interest Group thus far, is to build an abstraction layer on top of the existing and future payment systems to hide their differences from users and developers as best as possible. This layer could help payer and payee discover what payment methods they have in common and pass the rest of the interaction off to the chosen network. However, we would still be left with significant variance in speed, security, and the information required for authentication, payment authorization, and regulatory compliance. This approach requires users (or their agents, such as web browsers) and merchants to adopt the new system but it can bring some nearer-term benefits. It would not, however, seek to modernize the underlying payment systems.

A more ambitious approach is to drive for transformative change using Web technologies and standards: interoperability of networks, greater speed and security, and lower costs. The goal is to fundamentally improve clearing and settlement, or how money actually moves between networks and around the world. Payers and payees would never again have to wonder whether they have a particular payment method in common, but can simply send money from one to the other via the Web. “I have Visa but you only accept digital gold (or MasterCard, PayPal, Bitcoin, cell phone minutes, or fractions of some company’s shares)? No problem! Done.” People store value in many different places, currencies and instruments. The Web can connect all of them.

Web standards for financial transactions between networks and institutions can make money move with the same ease and speed information moves today. There are some interbank messaging standards that exist today, such as ISO 20022, but there are no standards or “Web rails” that are simple, open, and expressive enough to link banks, card networks, PayPal, Alipay, airline miles, cryptocurrencies, etc. The Web can enable seamless payments between all of these. Governments and companies around the world are already realizing the power that open APIs and Web protocols have to make financial systems more dynamic and efficient. Standards are the key to linking our disconnected systems.

The Value Web Task Force within the W3C’s Web Payments Interest Group is exploring the case for using Web standards for inter-network payments and developing proposals for what these standards could look like. We are actively seeking banks, networks, clearinghouses, central banks, regulators, cryptocurrency companies, and others who share the vision of a more connected and efficient global Internet of Value.

If you are interested in getting involved, join us in the W3C’s Web Payments Interest Group. For more information email [email protected] with the subject tag [value web] or reach out to standards+w3c@ripple .com.

First Draft of Web Payments Use Cases

Posted on April 16, 2015 by Manu Sporny

What does the future of electronic commerce look like in the year 2020? Thanks to a new document published today by the W3C Web Payments Interest Group, we can get a sneak peek at that future.

The first public working draft of the W3C Web Payments Use Cases just went live. The document elaborates on the future of payments by suggesting what should be possible with the Web Platform in the coming years. Using the use cases, the W3C group will outline a roadmap for specific technical working groups and technologies that should be built into the Web Platform by 2020.

This is the first document that the Web Payments Interest Group has produced, and it did it in record time. It took roughly 3 months to put the first public draft together after the group found its footing. The Web Payments group at W3C consists of an impressive assortment of veterans in the payments and technology space. Many of them are newcomers to the W3C. These organizations include the US Federal Reserve Banks, Bloomberg, Rabobank, Google, Oracle, NACS, Target, Alibaba, Yandex, and a varied group of W3C veteran organizations such as Intel, Verisign, AT&T, Gemalto, and others (72 people in total from 36 organizations). The group has jokingly been referred to as the “The Avengers of Payments”, referring to a Marvel comic series where a group of people come together to tackle problems that no single one of them can face alone. No one in the group takes themselves that seriously; the title is always good for a chuckle.

However, the group does take the work it is doing quite seriously as it has the potential to not only make payments easier, faster, more secure, and more innovative but also lead to a more egalitarian future for those in the world that do not have access to basic financial infrastructure.

There are many people around the world that today’s financial system does not reach. These people are called the world’s unbanked (or underbanked). The unbanked often live pay cheque to pay cheque, do not have access to savings accounts or low-fee cheque cashing services, lines of credit, or a way of saving for their future. Being unable to plan for one’s financial future often results in a focus on the short-term, which creates a vicious cycle of not being able to escape one’s situation. Not being able to participate in the financial system creates unintended inequities that create waste and result in a net loss for society. Addressing this inequity is just one of the outcomes driven by the goals of the group.

The use cases document starts out with a gentle introduction and then goes into basic payment terms before proposing a payment flow that is common to most transactions on the Web. The payment flow includes phases such as 1) Negotiation of Payment Terms, 2) Negotiation of Payment Instruments, 3) Payment Processing, and 4) Delivery of Product/Receipt and Refunds. The end of the document then maps how payments today fit into this common flow proposed by the group.

The document is written to be approachable by most anyone with a basic web, technical, or business background. It is cohesive, but there is still much that needs to be done on the document. A backlog of at least 200+ use cases exist from larger payment industry bodies and standards like ISO20022 and ISO12812, X9, the GSMA, and non-profits like the Bill and Melinda Gates Foundation.

The first public working draft of the W3C Web Payments Use Cases are offered to the public for comment as a part of the standard W3C process. Please take a moment to read through the document and send your feedback to the group, as this is going to influence what the Web is going to be capable of by the year 2020.

What’s next? The Interest Group will increase its attention on describing a Web payments architecture capable of fulfilling the use cases. We will then look at what’s needed to create that architecture, and later this year, we anticipate that W3C will propose to the Membership charters for Working Groups that will begin to work on new standards by the end of 2015. Now is a great time to get involved to help build the future Web payments architecture!

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