Most of us pay online with credit cards, stored credit and more. Ecommerce is a gazillion-euro (pound, rouble, yen ... ) industry. Many people don't use cash, and increasingly merchants don't accept it. The world is online. So what problems can W3C's Web Payment group solve?
Payment online is often complicated, fragmented and expensive. We manage multiple accounts, and pay sometimes enormous fees for them. Accepting money is often difficult, especially across currencies and countries.
Payment systems could be simpler, more efficient and more accessible. We don't know which solutions will be adopted, but there are some key points we clearly need to consider:
01. Simple technology
A solution must be simple to implement for users and vendors. Increasing complexity decreases uptake; forgetting this means failure.
02. Costs, available services and competition
If transactions cost 30 per cent, transferring funds is unattractive and selling goods requires high margins to be viable. Accepting credit cards costs money, and has other requirements. Currency exchange can be costly or risky for consumers or small merchants.
But handling money involves work. If the process is unprofitable, few providers will bother, in turn contributing to limited services and high costs. Enabling merchants and buyers to easily choose and change payment handlers will promote competition on service and price.
03. Individual transfers matter
Countries receiving significant remittances, or those with a large informal economy, need person-to-person transfers. Many current payment systems make that difficult or expensive.
04. Law, security and privacy
Almost everyone worries about payment security. Neither cash nor electronic systems are perfect, but minimising the risk of fraud and theft matters to us all.
Security and tax services are designed to ensure money is not being hidden or funding illegal activity. People are increasingly concerned about privacy, so bypassing legal controls won't fly – but nor will reporting requirements for kids buying sweets.
05. Getting the right players to the table
Ensuring proposals have a realistic probability of adoption is a key challenge. There are some very big players involved in the situation, with real outcomes at stake.
'Reducing costs' sometimes means reducing somebody's income, and those 'somebodies' may work actively against such changes. Picking the changes that produce an overall increase in wealth, by providing more or better-distributed business value than they destroy is difficult.
So is balancing the sometimes competing goals of businesses, governments and people's varying understanding of the 'common interest'. There are no guarantees of success, even with everyone cooperating.
There is plenty of work to be done before millions of 'unbanked' people trade stocks or currencies, governments collect appropriate taxes on the sale of a small handmade doll, or you and I negotiate a price and buy that doll from the maker directly online, without middlemen.
Some changes won't happen, others will surprise us. Shifting from cash to digital currencies has complex, far-reaching consequences. But the game is afoot ...
Words: Chaals Nevile
Chaals Nevile is a well travelled multilinguist who works on web standards for Yandex. You can get in touch with him @chaals.
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