W3C Working Group Tackles new, models for internet payment

Anyone who has shopped online will note that our payment options seem to be increasing. Beyond the typical credit card options, buyers now enjoy the option of payment through Paypal, Google Wallet, and Apple Pay. A less common but growing segment of the ecommerce market is that of nonproprietary crypto-currency payment methods – the most notable method being payment through Bitcoin.

On October 21, 2016, the premiere web standards advocacy group World Wide Web Consortium (W3C), an Affirming Partner of the OpenStand Principles, publicly announced the formation of the Web Payments Working Group (WPWG). The intended function of this group is to help streamline the online ‘check-out’ process for users across all browsing platforms, making all kinds of payments easier and more secure on the web. The WPWG plans to develop and promote multiple digital currency formats, including Bitcoin. According to its website “[The standards from this group] will support a wide array of existing and future payment methods, including debit, credit, mobile payment systems, escrow, and bitcoin and other distributed ledger technologies.”

The solution that WPWG has proposed goes beyond the strategy of creating a web browser plugin such as that employed by virtual wallets like Chrome’s KryptoKit. Rather, the WPWG’s approach would build the architecture for payments into the underlying protocol of the Internet itself. “It is challenging today for merchants to offer new payment options to consumers because of the many proprietary solutions and number of different APIs that they have to deal with,” explained Mark Horwedel, CEO of Merchant Advisory Group (MAG). “Open standards from W3C will help payment providers and merchants lower costs of payment management, improve consumer choice and transparency, and create new opportunities to introduce value-added services.”

If you have ever browsed a vendor’s website, placed an item or two into your cart, and then left the site without completing the purchase, you’re not alone. According to Baymard Institute, an independent web research organization, 68% percent of ecommerce transactions are abandoned at method of payment. Other research, performed by digital marketing company Listrak, estimates as many as 90% of web transactions end the same way. In eCommerce “shopping cart abandonment” rates may be reduced by standardized payment protocols. According to a statement from W3C, “W3C Web Payments standards can help some of the issues related to shopping cart abandonment regarding usability and security, through standard messages and message flow for the initiation, confirmation, and completion of payments.” W3C asserts that, in the future, users will be able to choose a preferred payment instrument for a particular transaction, and the messages between Web application and payment service providers will be mediated by the browser on the user’s behalf.

The development of proposed functionality of this new payment standard is incredibly complicated and fairly ambitious. For example, there is the need to establish a standardized process and protocol that allows a user go in and adjusted browser’s payment settings, connecting a credit card and/or Paypal, virtual wallet and/or other crypto-currency like Bitcoin. Then, when the user needs to pay for something online, the  browser must be able to discern the payment methods at the user’s disposal and attempt to pay with whatever your preferred resource happens to be, communicating to the user along the way. All of the transactional complexity should be largely hidden from the user, who would ideally see only a simple pop-up message that reads something like, “Are you sure you wish to charge $10.99 to your Bitcoin wallet?” as well as a confirmation that says “Thank you. Your transaction was processed.” The complexities that must be managed include the nuances of processing international purchases, currency conversion and more.

Needless to say, this level of integration will require high levels of expertise, dedication, and cooperation. Thankfully, the developers of WPWG possess those qualities and estimate that a working model should be completed in 2016. From there, the WPWG will pursue the development of a widely-adopted standard. W3C CEO Dr. Jeff Jaffe has commended the work that WPWG is doing and reemphasized the importance of standardized and integrated ecommerce protocols: “The industry has looked to digital wallets as a way to improve security and usability, as well as to support marketing initiatives. And yet, users have not yet wholeheartedly embraced them… when you buy something, you should have a standard way to match the payment instruments you have with the ones accepted by the merchant, in a way that integrates smoothly with the merchant’s checkout flow.”