Consortium looks at payment infrastructure

Even as retailers and banks move forward with Apple Pay and CurrentC, another group has joined forces to take a deep look at the infrastructure of web payments.

The World Wide Web Consortium, a consensus-based standards-setting body, has launched a Web Payments Interest Group whose goals include simplifying e-commerce and trying to make sure no one company dominates the system.

Target joined in October. The Federal Reserve Bank of Minneapolis is coordinating participation by the other regional Federal Reserve Banks. Representatives from Bloomberg and the National Association of Convenience Stores are chairing the group.

It's still the early stages, but the goal is to create common standards, terminology and interoperability for online merchants and shoppers, and develop a far superior system.

The vision, said Claudia Swendseid, senior vice president at the Federal Reserve Bank of Minneapolis, is for multi-screen checkouts or detailed registrations to go the way of the dinosaur. Instead of having online merchants pull from a consumer's credit card or bank account, shoppers could push the money to the merchant with the push of a button.

"It's a lot easier to just pick the stuff I want to buy and push a pay button then pick the stuff I want to buy and then go through three or four more steps to 'check out,' " she said.

Big parts of the financial system already operate under uniform, agreed-upon standards. For instance, checks follow standards set by a group called X9. But even as companies jockey for position in web payments, they are mostly just front-end interfaces that use the existing debit and credit card system. Think PayPal and Apple Pay.

The working group will look at cryptocurrencies like Bitcoin, traditional payment with credit and debit cards, person-to-person transactions and other transfers of value like coupons and loyalty programs. It will look at digital wallets, tokens and identity, authentication and security.

The charter of the working group sets its end date as September 2017.

Swendseid views web payments in the future as core infrastructure — like the Internet or highways — and it will be important for payments to be maintained in such a way that the infrastructure isn't owned by "a limited set of proprietary interests," she said.

"That's really why the World Wide Web was set up, W3C, it was set up to ensure that no one company or no few companies would own the web," she said.