The World Wide Web Consortium (W3C) is calling upon industry stakeholders like banks, credit card companies, payment solution providers, technology companies, retailers, etc. to join the new Web Payments Interest Group. W3C is driving a new initiative to integrate payments seamlessly into the Open Web Platform and leverage the unique ability of the Web to bridge ecosystem diversity and reach users everywhere across devices. This would eventually open up new business opportunities, improved user experience for online transactions, reduce fraud, and increase interoperability among traditional solutions and future payment innovations.
E-Commerce is thriving and predicted to reach $1.471 trillion this year, an increase of nearly 20% from last year. According to Forrester research, a third of those transactions will take place on a mobile device. A number of obstacles stand in the way of stronger growth on devices:
- Usability - while shopping online, users add products to their shopping carts, but they rarely make final purchases. Small screens, small keyboards, the requirement to create an account, sharing personal information with unknown merchants are some reasons behind average shopping cart abandonment rate being 97% on mobile devices.
- Fraud - stories of massive credit card number theft have demonstrated the inadequacy of current system of sharing sensitive information and the high costs involved. The rate of fraud in "card not present" transactions is 10 times higher than that when physical cards are used.
W3C is of the view that strengthening support for payments has the potential not just to improve usability and reduce the risk of fraud, but also create new opportunities for businesses and consumers in areas such as couponing, loyalty programs, virtual currencies, etc. Web based mobile payments can make "brick and mortar" transactions more secure and convenient. Although we are seeing innovation in mobile payment systems, the lack of standards makes it more difficult to adapt to new approaches. Fragmented regulatory environments further complicate the payments landscape.
To overcome these challenges, W3C has chartered the Web Payments Interest Group. Global stakeholders from all parts of the industry will enumerate use cases and scenarios. The group will study the current gaps in Web technology regarding usability, security, and privacy, and recommend new work to fill those gaps. The Interest Group will also liaise with other organizations in the payment industry that are using Web Technologies to foster alignment and interoperability on a global scale.
The Interest Group will focus on digital wallets, which is an effective way to reduce fraud and improve privacy by having users' sensitive information only with payment providers instead of the merchants. Lack of standards for processing payments makes it difficult to implement wallets and gain the benefits of automation. While the Web Payments Interest Group will create a framework to ensure that Web applications can interface in a standard ways with all current and future payment methods.