I’m a pragmatic idealist and try to not allow cynicism to bleed in so much that it prevents us from trying to make progress where we can. In the particular case of Web Payments, we’re talking about empowering billions of people with a financial infrastructure that’s built with the same principles that are of the Web. Openness, transparency, permission-less innovation (as long as it’s legal), connected-ness, etc. Now, I know that you’d like to see that too but also believe that there are too many entrenched interests to allow that to happen. Hopefully the rest of this response will give you some extra information that you most likely did not have before. I’d like to focus on five points:
- There is no monolithic “the banks”. It’s actually a much richer ecosystem than most people realize (6,000+ different banks in the US alone, 9,000+ international banks in the world). The banks do compete for customers and marketshare. There are people internally that are fighting to bring their banks into the modern age.
- The way to get standards developed isn’t to try and convince large organizations to do the right thing, it’s to convince them that they’ll be wiped out if they don’t (and then show them the technology that’s going to do it). You not only have to go top-down, but bottom-up as well. That is, we need to convince people with an audience (like you), that this is worth doing and that you actually do have the power to affect change.
- The people in government that care about this sort of thing are smarter than you think, and there are many of them that want to see improvements in global financial networks.
- The problem is systemic. It’s not because there are a bunch of evil people working at banks to prevent this from happening, it’s that the incentives are misaligned. The key here is creating a set of incentives that are aligned with the banks and large corporate interests.
- Assuming your cynicism, what’s the worst possible outcome? A better web.
First point:
Of course they don’t want to be a part of something that reduces their lock-in. They do, however, want to be involved in something that could become an existential threat to them (or enable their competitors to gain an advantage over them). They want to do this because they want to control the outcome. HSBC and Apple are two very different organizations with very different motivations. There is almost nothing but upside for Apple if the effort is successful, and there is almost nothing but downside for HSBC if the effort is successful and they aren’t ready for it. If they both participate, at least there is a neutral outcome. If neither of them participate, we have proven that there are many more other organizations that will participate and will use the technology developed in the Web Payments work to their advantage. In other words, the cost of not participating is too high at this point.
There are over 6,000 banks in the US today. There are over 9,000 international banks. These are large organizations and there are a lot of them, and each of them is trying to differentiate themselves from the other. The reason they move so slowly isn’t because they don’t want to change, it’s that technology isn’t their forte, they have to ensure the stability of the global financial system, and they have loads of regulations that they have to follow.
To say that none of those organizations are motivated to do something that’ll make them a leader of the pack when it comes to ease of use, or speed of transactions, online payments, is a very difficult argument to make.
Second point:[quote=“sil, post:28, topic:2053”]
I freely admit nothing but cynicism on this point. Having worked a bit on web standards generally, it’s pretty common to feel disillusioned sometimes about how the big players flatly refuse to work together when they see competitive advantage in not doing so, and wading through the murk of self-interest can sometimes be pretty disheartening.
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Disheartening, yes, but that’s what for-profit beasts do. It’s not cynicism to think that, it’s reality. It helps to treat large corporations like machines that have pretty simple programming; they’re predictable over a large range of inputs. The real question is: what set of inputs could be fed in that would provide a predictable outcome. At the core, it’s a really fascinating engineering problem. In general, most large organizations react predictably when a technology is discovered that would provide powerful competitors with a real advantage if it were not adopted. For example:
- A technology that would enable customers to do seamless, immediate transactions over the Web regardless of the payment type (credit card, ACH, Bitcoin, etc.).
- The ability to identify customers using cryptographic means, thus meeting regulatory burdens of “Know Your Customer” without paying the $325/customer/year tax that banks pay today.
- A mechanism that delivers a customer directly to their bank instead of to a 3rd party payment processor, thus strengthening the relationship the customer has with their bank (instead of, for example, the relationship that the customer has w/ the 3rd party payment processor).
Any financial institutions would be foolish to not adopt the technologies above if their competitors could do the same. However, let’s assume that banks don’t adopt the technologies. Ask yourself what would happen if large technology companies adopted that technology instead? Do you see the existential threat this creates for the banks? Assume the technology companies do nothing with the technology above. Do you see the multi-hundred-billion dollar opportunity that the technology companies pass up if they cede the technology advances to the financial industry? There are good incentives in place for both technology companies, and banks to participate. Fear and greed are two great motivators when it comes to large organizations.
Third point: [quote=“sil, post:28, topic:2053”]
I’m not confident in government either; while I don’t want to go on about “banksters” here, if the last ten years have a message for us then it could well be that given a choice between large financial institutions pursuit of the status quo and what’s better for their customers, the institutions have a great deal of power to not change anything even when forced to.
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Populism is fun! 
It’s fun to go on about how ineffective our governments are at controlling the banks. Yes, we all wish that the governments of the world would have seen the disaster of the past 10 years coming. We wish they would have done more for us commoners. If only we had better governments!
Yes, it’s true that large banks have a great deal of power to not change, even when forced to. Could it be that we’re not providing our governments with the proper tools to force that conversation to happen? What would happen if we built a new financial system into the Web that was friendly to governments, regulation, and enabled thousands of new competitors into the market. Do you think governments would be in a better position to “convince” the large financial instritutions to change?
The fact is that the US Federal Reserve and the European Commission came to the Web Payments Workshop and made a slew of public statements about what changes they want to see happen. Those changes were aggressively pro-citizen. I was floored by a number of the statements made by the European Commission; they came out swinging. The fact is that these government bodies are providing feedback to the Web Payments Steering Group chartering process. The fact is that the US Federal Reserve has taken a great interest in this work and the meetings that I’ve had with them have demonstrated that they really know what they’re doing. Their technologists are very bright people, and I say that having worked with luminaries in the Web world. Will this be enough? Who knows, but we have some of the best people involved from the governmental side of things. These are people that have built software systems that regularly, without error, move trillions of dollars around the economy on a yearly basis. They’re good people to know.
Fourth point: [quote=“sil, post:28, topic:2053”]
However, I can think of no example, none, where the world of finance has seen a long-term attack on their current base and has attempted to solve it by being better rather than through attempting to legislate it out of existence.
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You’re not looking hard enough. Here are just a few public examples: Simple’s acquisition by BBVA. The fact that most major banks now have a team focused on innovation and funding financial startups (almost none of them did in the 1990s-early 2000s). Finance’s quiet involvement in FIDO Alliance. Fidor Bank’s use of the Ripple protocol and underwriting of Bitcoin trading. Finnish banks like Nordea, Osuuspankki, and Tapiola onboarding Bitcoin as a supported currency. The state of New York in the US creating a new license for Bitcoin gateways.
One of the issues with your argument is that you keep thinking of the “world of finance” as one homogeneous entity. It’s not. There is so much variation in there and there are banks that are trying to become better.
The problem with our banking infrastructure is systemic. We haven’t provided the proper systems to the financial industry that would enable them to move foward while also ensuring that the regulatory landscape can be addressed. Bitcoin did great on the first requirement and then seriously screwed up on the second requirement. The Web Payments work is an attempt to try and at least put our best technological foot forward in a way that’s responsible and inclusive of all parties that this affects.
Fifth point: [quote=“sil, post:28, topic:2053”]
I hope my cynicism is misplaced. I truly do.
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I think it’s misplaced, but let’s do something crazy for a second and assume that it’s not. Let’s assume that this whole initiative is going to fail horribly. We never end up with a simpler way to transmit money around the Web. If you take a look at the Web Payments specifications page, you’ll find a slew of technologies:
https: //web-payments.org/specs/ (added space due to URL posting restrictions)
In order to get Web Payments to where we want it to be, it requires that we invent entirely new technologies. For example, JSON-LD was invented because we needed a way to transmit offers for sale, payment requests, and digital receipts for the Web Payments work. It just so happens that Google, Yandex, Microsoft, and Yahoo! adopted JSON-LD in a big way earlier this year because it turns out that it helps web developers express machine-readable locations, events, product reviews, and other things we search for using search engines. We didn’t know they were going to use it for that when we created JSON-LD, but are pretty happy that it ended up being useful for something else.
We’re also wrapping up work on HTTP Signatures, which helps developers digitally sign HTTP requests and identify the client in a single HTTP call (and provide message integrity). No more OAuth round-tripping to get a token to make a call. No more shared secrets. The simple 6 page spec can be used for machine-to-machine communication where you need to authenticate yourself while you’re making a request. This is important for the Internet of Things work that’s going to be happening over the next 5 years. We need HTTP Signatures so that payment clients and payment processors can ensure that payment requests are coming from people authorized to use a particular financial account. It’s a general technology that Joyent (corporate sponsor of node.js and a big cloud hosting provider) is already using in production, so even without the start of the official Web Payments work, Web Payments technology has already benefited another industry.
Other technologies we’re working on include digital signatures for JSON-LD, Secure Messaging (signed linked data messaging), digital receipts, high-stakes credentialing (proving that you are who you say you are, digital government IDs, proof of age, proof of shipping address), and many more pieces that, even if the Web Payments work fails, will be useful to the broader Web.
The Web Payments work is worth doing any way you look at it, even if we fail to achieve the end goal of simpler payments for the Web.
So, now that I’ve lost just about everyone that started reading this thread, here’s why you should get involved. Seriously, if you’ve read this far, you’d fit into the Web Payments Community Group really well. 
The number of people that work on any Web standard is fantastically small. I don’t think many Web professionals truly understand that. The core of most specifications that you know about were created by maybe 3-5 people. There are exceptions like HTML5, but really, the vast majority of specs were created by a handful of people and of those people probably around 50% of them were new to standards development. There are few things on this planet that allow you to have the sort of impact that working on a Web standard does. The ratio of ‘significantly contributed to a standard’ to ‘positively affected by a Web standard’ is close to 1:500,000,000. It’s a really rewarding experience.
So, the first thing you should consider doing is lurking on the mailing list to see if you’re interested in what we’re talking about:
http://lists.w3.org/Archives/Public/public-webpayments/
If you are interested, you should consider reviewing the use cases and seeing if there is something that’s missing that you would like to see added to the Web platform (wrt. Web Payments):
https: //www.w3.org/community/webpayments/wiki/CategorizedWebPaymentsUseCases
(added space due to URL posting restrictions)
All of our calls are open to the public, anyone can join and participate (we record the audio for all calls and have detailed minutes):
https:// web-payments.org/minutes/
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So, what can you do? Well, what are you good at doing? Chances are very good that we need your help. If you’re a graphic designer, we need a logo and our web pages to be redesigned. If you’re a programmer, we need implementations of the specs and test suites to be written. If you’re a decent technical writer, perhaps you’d like to improve some of our documentation? If you are a speaker, why don’t you do a talk about Web Payments at your next local meet up. If you have a community, let people know what we’re doing and point them to the links above. If you’re a systems architect, perhaps you could join us on the calls or critique the specifications. Whatever your technical skill set is, chances are that we need it.
Everything that you do, no matter how small, is something that brings this brighter future that we’re trying to reach for within grasping distance. Join us and be a part of opening up the global financial network to the 2.4 billion people that use the Web today, and the next billion people that are going to be coming online in the next decade.