Revolutionizing Online Payments: The W3C Initiative
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Paying for things online can be cumbersome. Even the man who invented the web, Tim Berners-Lee, says he frequently throws up his hands. “Sometimes I will think that I bought something and I press the button, ‘Buy this,’ and I don’t realize it didn’t go through,” Berners-Lee said in a recent interview. “We are long overdue for a payments-user-interface for the web.”
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Responding to the frustrations of Berners-Lee and hundreds of millions of online shoppers, the web’s governing body, the World Wide Web Consortium, or W3C, has brought together the giants of the internet, including Google, Facebook and Apple, to fix the clumsiness of paying for things online. Now, a new global standard for online payments – a sort of Amazon one-click payment system for the entire internet – is being completed by the consortium and its members. Google, one of the authors of the standard, recently introduced it in certain new versions of its Chrome browser. Other browser companies have said they intend to follow.
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The standard will provide a uniform way for users to input their credit cards and payment systems to any web browser so they can be used for any purchase on the web. After the card details are entered once, they will automatically be called up as choices for all future transactions. This will be somewhat like the existing auto-fill functions that browsers have. But with the new standard, all the data fields will be filled in invisibly, requiring just one click. On the security side, rather than sending along all the credit card details, the browser will generate a one-time payment token that will avoid leaving your credit card number in countless databases around the world.
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Numerous efforts to modernize the payment system have failed to take off. And this one could fizzle out too, if online merchants, web browsers or consumers fail to adopt the new standard. The new standard will also face competition from the Amazons and PayPals of the world, as well as from the credit card networks, all of which want to be the primary destination for payments, rather than just one option. But payment analysts are hopeful about the new effort because it will not require consumers or merchants to use a new method of payment.
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Instead it will be equally open to any existing card or payment app, and it will channel them into a single place that most consumers already use ( the web browser ( where everything can be stored and used. “Instead of simplifying the world, we have been fragmenting it into a million apps,” said Eric Shea, a payments consultant at Kurt Salmon Digital. “If we can get back to that single integrated solution that everyone has on their phone and their desktop, that is the way to move forward and get adoption.” Dave Birch, who works for Consult Hyperion, has been working on electronic payments for more than two decades, said the web browser stood the best chance of providing a unified and more secure portal for payments. Neither PayPal nor Amazon has participated in the W3C effort and they are likely to continue to provide an alternative to customers who don’t want to enter their details into their browser.
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But the W3C has managed to bring in about 40 of the biggest players in online commerce, including Apple, Microsoft, Facebook and American Express as well as Chinese companies like Alibaba and Tencent. All met in Portugal to put the finishing touches on the specifications. “We wanted to remove what we joking call the NASCAR effect of checkout, where you see five or seven logos for the different cards and payment methods you can use,” said Zach Koch, the top Google executive on the project. “This is really fast, where a user can say, “Tap, tap, buy.” The fees from transactions will still go to existing financial institutions like credit card companies and banks, unless customers choose a new online payment method like ApplePay or SamsungPay, which take a piece of each transaction. But the bigger goal behind the W3C project is to create a standard, seamless and secure way to pay for things electronically in a future that will most likely include virtual reality stores, chat-based transactions and machines making payments to other machines (an autonomous car paying for a parking spot, for instance).
