Web Payments: The Architect, the Sage, and the Moral Voice

Three billion people use the Web today. That number will double to more than six billion people by the year 2020. Let that sink in for a second; in five years, the Web will reach 90% of all humans over the age of 6. A very large percentage of these people will be using their mobile phones as their only means of accessing the Web.

TL;DR: In 2015, the World Wide Web Consortium (The Architect), the US Federal Reserve (The Sage), and the Bill and Melinda Gates Foundation (The Moral Voice) have each started initiatives to dramatically improve the worlds payment systems. The organizations are highly aligned in their thinking. Imagine what we could accomplish if we joined forces.

The Problem

With the power of the Web, we can send a message from New York to New Delhi in the blink of an eye. Millions of people around the globe can read a story published by a citizen journalist, writing about a fragile situation, from a previously dark corner of the world. Yet, when it comes to exchanging economic value, the Web has not fulfilled a promise to ease the way we exchange information.

While it costs fractions of a penny to send a message around the globe, on average, it costs tens of thousands of times that to send money the same distance. Furthermore, two and a half billion adults on this planet do not have access to modern financial infrastructure, which places families in precarious situations when a shock such as a medical emergency hits the household. Worse, it leaves these families in a vicious cycle of living hand-to-mouth, unable to fully engage in the local economy much less the global one.

The Architect

What if we were able to use the most ubiquitous communication network that exists today to move economic value in the same way that we move instant messages? What if we could lower the costs to the point that we could pull those 2.5 billion people out of the precarious situation in which they’re operating now? Doing this would have dramatically positive financial and societal effects for those people as well as the people and businesses operating in industrialized nations.

That’s the premise behind the Web Payments Activity at the World Wide Web Consortium (W3C). The W3C, along with its 400 member organizations, standardized the Web and is one of the main reasons you’re able to view this web page today from wherever you’re sitting on this planet of ours. For the last five years or so, a number of us have been involved in trying to standardize the way money is sent and received by building that mechanism into the core architecture of the Web.

It has been a monumental effort, and we’re very far from being done, but the momentum we’ve gained so far is more than we predicted by far. For example, here is just a sampling of the organizations involved in the work: Bloomberg, Google, The US Federal Reserve, Alibaba, Tencent, Apple, Opera, Target, Intel, Deutsche Telekom, Ripple Labs, Oracle, Yandex… the list goes on. What was a pipe dream a few years ago at W3C is a very real possibility today. There is a strong upside here for customers, merchants, financial institutions, and developers.

The Sage

At one time, the US had the most advanced payment system in the world. One of the problems with being the first is that you quickly start accruing technical debt. Today, the US Payment system is among the worst in the world in many categories in which you rate these sorts of things. For the last several years, the US Fed has been running an initiative to improve the state of the US payment ecosystem.

Two of the US Fed’s strengths are 1) pouring through massive amounts of research on our financial system and producing a cohesive summary of the state of the US financial system and 2) its ability to convene a large number of financial players around a particular topic of interest. Their call for papers on ideas around improving the US payment system resulted in 190 submitted papers and a coherent strategy for fixing the US payment system. Their most recent Faster Payments Task Force has attracted over 320 organizations that will be attempting to propose systems to fix a number of the US payment systems rough spots.

If we are going to try to upgrade the payment systems in the world, it’s important to be able to make decisions based on data. The research and convening ability of the US Fed is a powerful force and the W3C and US Fed are already collaborating on the Web Payments work. The plan should be to deepen these relationships over the next couple of years.

The Moral Voice

The Bill and Melinda Gates Foundation just announced the LevelOne Project, which is an initiative to dramatically increase financial inclusion around the world by building a system that will work for the 2.5 billion people that have little to no access to financial infrastructure in their countries. This isn’t just a developing world problem. At least 30% of people in places like the United States and the European Union don’t have access to modern financial infrastructure.

The Gates Foundation has just proposed a research-backed formula for success for launching a new payment system designed to foster financial inclusion, and here’s where it gets interesting.

The Collaboration

Building the next generation payments system for the world requires answering the ‘what’, ‘how’, and ‘why’. The organizations mentioned previously will play a crucial role in elaborating on those answers. The US Fed (the sage) can influence what we are building; they can explain what has been and what should be. The W3C (the architect) can influence how we build what is needed; they can explain how all the pieces fit together into a cohesive whole. Finally, the Gates Foundation (the moral voice) can explain the why behind what we are building in the way that we’re constructing it.

I’ve had the great pleasure of working with the people in these initiatives over the past several years. Aside from everyone I’ve spoken with being deeply dedicated to the task at hand, I can also say from first-hand experience that there is a tremendous amount of alignment between the three organizations. It’ll take time to figure out the logistics of how to most effectively work together, but it is certainly something worth pursuing. At a minimum each organization should be publicly supportive of each others work. My hope is that the organizations start to become deeply involved with each other where it makes sense to do so.

The first opportunity to collaborate in person is going to be the Web Payments face-to-face meeting in New York City happening on June 16th-18th 2015. W3C and US Fed will be there. We need to get someone from the Gates Foundation there.

If this collaboration ends up being successful, the future is looking very bright for the Web and the 6 billion people that will have access to Web Payments in a few years time.


Got something to say? Feel free, I want to hear from you! Leave a Comment

  1. Did are representative from the Gates Foundation participate at the Web Payments face-to-face meeting in NY on June16-18?

  2. Did a representative from the Gates Foundation participate at the Web Payments face-to-face meeting in NY on June16-18?

  3. Eric Larson says:

    Some of the most well respected developers in the industry are building browsers at Google and Microsoft. As a 20 year web developer who has dabbled in W3C and IETF standards I have a lot of confidence in their abilities. If you want to influence standards you should consider working for one of these companies and earning the respect of these experts.

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