The World Wide Web Consortium (W3C) is working to develop open standards that will enable companies and individuals to make secure payments over the web. Today (Wednesday 15 October) it launched a Payments Interest Group, which it hopes will attract industry participants from banks and card providers, e-commerce companies, merchants, the suppliers of browsers and digital wallets, telecoms operators and other interested parties, including regulatory bodies.
The W3C says its payments platform will cover "international low-value remittances, general retail payments, bill payments, and utility payments. The group will study the current gaps in Web technology regarding usability, security, and privacy, and recommend new work to fill those gaps."
It has no plans to develop its own digital wallet, and so on. However, it will develop open standards that enable different products to interoperate. It recognises that some industry giants already have payments systems — including Apple and Google — but the W3C aims to attract thousands of smaller suppliers. If the open "web commerce API" is strong enough, most companies will want to use it, if only to save development time.
The W3C has already spent about four years organizing discussions about web payments, but it’s a very complex area. It requires a range of technical developments including signed HTTP messages, secure messaging, identity credentials and digital receipts, as well as a payments infrastructure. Some of this work is being done by different groups, including the cryptography and NFC working groups.
The W3C says there are problems with the systems in use today. One is poor usability: it reckons that "the average shopping cart abandonment rate is 97 percent on mobile devices". Another is fraud. It says: "The rate of fraud in 'card not present' transactions (such as those common for transactions via Web sites) is 10 times higher than that when physical cards are used. These risks must be addressed if online commerce is to flourish."
The W3C system will include the facility for in-app payments. The web is becoming less important to smartphone and tablet users, who tend to prefer apps. The app stores also attract developers who see them as a way to monetize their work.
The W3C sees a payments system as a way to redress the balance. The attraction for developers will be that apps they deploy on the web should work across multiple platforms, which avoids the need to develop for several incompatible systems. It also frees them from the restrictions imposed by platform controllers such as Apple, Google and Microsoft. See: W3C boss Jeff Jaffe explains how the web will beat smartphone apps and keep growing