World Wide Wonga

Why can’t any merchant talk to any wallet to take any payment mechanism? Because it’s really complicated.

Wouldn’t it be great if, when you wanted to buy something out on the Internet somewhere and you were looking at it on your mobile phone or on your laptop or on your telly there was a button in the corner and you could just click on the button and… That’s it.

Suppose that you could choose how you want to pay (a debit card, Bitcoin, Avios points or whatever) and the system just took care of it for you.

Suppose that the people running the website didn’t have to sort this stuff out for you when you went to their website. It’s a nice idea.

It’s a nice idea that people have had for a long time.

I can tell you a first-hand just how hard it is to make that actually happen. Approximately a gazillion years ago (a gazillion web years is equivalent to around twenty of our Earth years) I used to sit on a working group on behalf of one of our financial services clients looking to develop what became known as the Internet Open Trading Protocol (IOTP), possibly better known to you as the Internet Engineering Task Force (IETF) Request for Comment (RFC) 2801. It took years (and I do mean years) to get a rudimentary standard together so that retailers and service providers and schemes and banks and others could all agree on how it should work.

Why was it so hard to sort this out? Well, when you get into the nuts and bolts of how this stuff works, there are a lot of challenges. What if the retailer only wants to take debit cards and not credit cards, for example? How does his website tell your digital wallet that and how does your digital wallet decide to replace your default credit card with a particular debit card? What if you don’t want to use your debit card at websites outside of your own country? What if the merchant wants to offer you a lower price in return for using electronic money with no chargeback rights? How do you send remittance information and payments advice? It seems like it should be easy, but it really isn’t.

Think of everything that needs to be standardised! The “invoice” from the merchant, the “payment advice” from the payment service, the “receipt” from the merchant confirming that payment has been received.

The standard was eventually published in 2000, but nobody ever actually implemented it, so we never got standard digital wallets that could interact with any website to make purchases using any payment instrument that the consumer wanted.

An unkind observer might wonder why it is that two decades after the Netscape IPO we are still typing our credit card numbers into webpages! We’ve tried standards for filling out web forms, electronic wallets stored on our PCs, wallets in the cloud and all sorts of other things but if I look at the last few things that I’ve bought online I have either paid using the stored payment credentials I have at Amazon or PayPal and at least once in the last day I didn’t buy something that I wanted to buy because the service provider didn’t take either of these and I am just too lazy to take my wallet out and type my card details in for the millionth time. If it was easy, it would have been done.

My personal suspicion is that it is the mobile phone that is going to put a stop to this because that is where the security and personalisation come together. So you click to buy something and Apple Pay pops up on your phone and you put your finger on and it… done. Quite appealing, I think. However, whether your digital wallet is in your telly or in your phone, we still need standards to connect it to retailers and other service providers and I suppose it would be nice if those standards were set by the web community and not by Apple, Google, Samsung, Amazon or any other one of the top technology players.

Well, the industry is having another go. The World Wide Web Consortium (W3C), the body led by Tim Berners-Lee that develops web standards, has kicked off a web payments working group and they are going to have another go at defining a standard web payment interface in an attempt to boost online commerce. They plan to put together standards for the messages to go between payers and payees, the APIs needed to connect web browsers to the customers payment methods (I think the assumption is that these payment methods will be held in a digital wallet of some kind) and the use of payment cards as they evolve.

The idea of working together to deliver a set of open standards into the marketplace is a good one. If any website that you went to could access your digital wallet, and you could store whatever payment types you wanted inside a digital wallet (anything from Barclaycard to Bitcoin), there is no doubt in my mind (provided issues around security and privacy are dealt with properly of course, as I am sure they will be) that there is potential to grow online commerce substantially. I’ve been thinking this since the dawn of the web and I hope the W3C can finally make it happen.

An edited version of this piece appeared in Financial World magazine (December 2015).