Re: The case for registration as a technical specification

On 13 July 2015 at 16:23, Zach Koch <zkoch@google.com> wrote:

> There's a lot happening in this thread, so I apologize in advance for
> cherry picking out quotes and responding, but it seems like the cleanest
> way to do it.
>
> As a general comment, the concept of a "wallet" and a "payment instrument"
> is becoming more and more muddled. I think this is worrisome, which I
> comment on more below. I thought of a wallet as something much dumber (i.e.
> just an aggregator of payment instruments).
>

I don't think it should be muddled but the PayPal case confuses things. I
think there is a misunderstanding which I'll try to clarify.

The wallet can't just be an aggregator otherwise you have to define an
instrument for every payment service provider and merchants have to
explicitly support each of them. See my comment on Coinbase below.


>
> I don't agree. PayPal hold a number of sources of funding (PayPal balance,
>> credit cards etc) which are each payment instruments. I can see the
>> argument that your PayPal account could advertise itself as a payment
>> instrument but that takes away the ability of the payer to choose which
>> instrument to use each time they pay out of their PayPal wallet.
>
>
> I agree with David. PayPal is best thought of as a (set of) payment
> instrument(s). This notion of Visa, MC, PayPal etc all being wallets does
> not, IMO, lead to a good user experience. You're asking users to think
> about and understand the difference between Wallets and the various payment
> instruments they support.
>

+1 PayPal is best thought of as a set of payment instruments (a wallet).

I am not suggesting that MC or Visa are wallets (not sure how you read that
from my response). I am suggesting they are payment instruments in the
PayPal wallet.

BUT PayPal can be an instrument too because you can have a PayPal balance
without needing to have any cards loaded in your PayPal wallet (someone
sent you money).

So, as a user I can have my PayPal wallet loaded with a balance of $10 and
also have a bunch of cards registered in there. If I visit merchant A
website and he only supports VISA as a payment instrument my wallet
supports the payment because it is holding a VISA payment instrument (note
the merchant doesn't explicitly support PayPal as a payment instrument).
When I visit merchant B website and she supports VISA, MC, Amex and PayPal
my wallet can prompt me to use the instrument that I'd like to use for this
transaction. Because the merchant explicitly supports PayPal I can use my
PayPal wallet's balance and not one of the other registered instruments.


>
> It also means that the merchant has to explicitly support PayPal as a
>> payment instrument. If the merchant supports VISA cards as payment
>> instruments and you have a VISA card in your PayPal wallet then you should
>> be able to complete the payment.
>
>
> Maybe, but I'm not sure PayPal would agree with you.
>

If a merchant accepts card payments via some other gateway (not PayPal) and
I have my credit card loaded on PayPal I can't use that PayPal wallet to
pay today. I have to enter my card details directly into the website and
PayPal are not involved.

If we have this standard in place then my PayPal wallet can send my VISA
card details to that merchant's gateway (in whatever form the VISA scheme
dictates) and I can complete the payment. This is the advantage of the
standard we are proposing. I think PayPal would like the world where
merchants don't have to explicitly support PayPal and yet users can still
use a PayPal wallet.

This is the goal, decouple the wallet and instrument to some extent so that
merchant's don't have to support wallets just payment instruments. Then the
user's can use whatever wallet they choose and still be able to pay at most
merchants.


>
> We are explicitly aiming to create a standard that allows some kind of
>> aggregation so the line between wallets (which are effectively aggregators
>> of instruments) and instruments does become a bit of a grey area.
>
>
> This is a big red flag to me and worries me that what you'll end up with
> is a muddled and confusing user experience. We need to draw a clear line
> between a "wallet" and a payment instrument.
>

It will only be confusing for users with complex requirements. Most users
will pick a single wallet that supports all the payment instruments they
have.

I'd see it as a kind of heirarchy where the browser only needs to interface
with a single wallet which the user configures as their default wallet. If
that wallet doesn't support some obscure payment instrument that they want
to use then instead of putting that instrument into their default wallet
they can have a second wallet which does support that instrument and put
the second wallet into wallet their default wallet.

There is no easy way to get away from the browser or other user agent
having a single entry point to kicking off the payment instrument discovery
process. This is addressed by having a default wallet. BUT to prevent user
lock-in we need to allow users to have mutiple wallets so we need to allow
that default wallet to aggregate other wallets if that's what the user
wants.


>
> The major difference between a wallet and simple list of instruments is
>> that wallets have knowledge about how to use the instruments they support
>> storing.
>> A wallet that supports Bitcoin knows how to send a Bitcoin transaction
>> for example.
>
>
> I'm not clear on why this has to be the case.  Couldn't you have Coinbase,
> for example, as the payment instrument and the Coinbase payment instrument
> knows how to send a bitcoin transaction? Why does the Wallet need to know
> about this? I think we're overcomplicating the Wallet here.
>

If you do this then the merchant has to support Coinbase.

Wouldn't it be better if the merchant just supported Bitcoin? Then the user
can use whatever wallet they choose that supports Bitcoin.

That's not to say the merchant can't support Bitcoin AND Coinbase if there
are some features of the Coinbase payment instrument they'd like to
explicitly support.

In this scenario Coinbase is a wallet. It's not a very useful one because
it only supports Bitcoin but it could be one of the more obscure ones that
user's put inside another.

If you revisit the PayPal example imagine that one of the payment
instruments I have added to my PayPal wallet is my Coinbase wallet (the
PayPal wallet is aggregating the instruments of another wallet because I
chose PayPal as my default wallet but they don't support Bitcoin so I had
to add my Coinbase wallet INTO my PayPal wallet). So I now have a PayPal
balance, a bunch of cards and a Bitcoin wallet as possible payment
instruments. The merchant doesn't need to support PayPal or Coinbase they
could simply support VISA and Bitcoin and I already have two ways I can pay
them.


>
> If schemes define rules that close out wallets then the market will push
>> back by tending toward more open schemes. A standard like this enables this
>> market driven openness because it becomes trivial for merchants and users
>> to support and use new payment instruments.
>
>
> It seems as if you're making Wallets the key place where innovation
> happens here. I don't think that's the right place. I understand the goal
> of driving openness, but I'm not sure this standard is the place to push
> this. I think first we should focus on users and creating an easy and
> compelling user experience (i.e. easy selection of payment instruments from
> the intersection of payment instruments they've added to their wallet and
> payment schemes the merchant supports). Then we should focus on merchants
> and ensuring that the payment schemes they accept are available in this new
> experience we're standardizing. We shouldn't be trying to force PayPal, for
> example, to support credit card transactions for non PayPal merchants. I
> fear that will not end in success.
>

I disagree. I hope from my explanations above you can see why. If PayPal
adhere to this standard for their wallet then it is possible for merchants
to accept card payments from users with a PayPal wallet even if the
merchant doesn't support PayPal.

If PayPal doesn't want to adhere to the standard the market will force them
out as people realise that they can't use their PayPal wallet at many sites
and find other wallets that adhere to the standard.


>
>
> On Mon, Jul 13, 2015 at 3:53 PM, Adrian Hope-Bailie <adrian@hopebailie.com
> > wrote:
>
>>
>>
>> On 13 July 2015 at 11:31, Brett Wilson <brettw@google.com> wrote:
>>
>>> On Mon, Jul 13, 2015 at 4:25 AM, L. David Baron <dbaron@dbaron.org>
>>> wrote:
>>>
>>>> On Thursday 2015-07-09 17:34 +0200, Adrian Hope-Bailie wrote:
>>>> > Hi David,
>>>> >
>>>> > I agree and I think that the discussion re the charter to date
>>>> suggests
>>>> > others do too.
>>>> >
>>>> > One thing I wanted to clarify is the role of the browser/UA in the
>>>> > currently proposed flow. This is my understanding and I'm happy for
>>>> anyone
>>>> > to chime in with a different perspective.
>>>> >
>>>> > As it stands, the proposal is to create a standard WebIDL API that
>>>> allows
>>>> > websites to initiate a payment by passing a standardised message to
>>>> the
>>>> > browser and for that API to respond with a standardised message back
>>>> to the
>>>> > website. This process will be repeated for a completion request and
>>>> > response.
>>>> >
>>>> > When the browser receives this message it should do one of two things:
>>>> >
>>>> >    1. Pass it directly to a configured wallet, unmodified
>>>> >    2. Decline the API request as there is no wallet configured
>>>> >
>>>> > i.e. I'd like the browser's participation in the flow to simply be as
>>>> a
>>>> > proxy of messages between the website and the user's wallet.
>>>> >
>>>> > We are proposing that there may be 3 types of wallet:
>>>> >
>>>> > 1. Cloud-based. In which case the browser passes the requests message
>>>> via
>>>> > HTTP (a REST API of sorts) to the wallet service and get's back a
>>>> response.
>>>> > (Details of how this would work, including hosting of the wallet UI
>>>> in a
>>>> > frame or new window will be left to the WG to decide).
>>>> >
>>>> > 2. Native. Meaning the user installed some wallet software (or app in
>>>> the
>>>> > case of a smartphone) and there is a mechanism for the browser to
>>>> > communicate with that native wallet service. It will be for the
>>>> browser
>>>> > vendors to propose how this is done or if it should be standardised.
>>>> > Perhaps it will be simplest to say that native wallets must host an
>>>> HTTP
>>>> > endpoint service so that the interface matches cloud-based wallets, or
>>>> > maybe they will need to take the form of browser extensions.
>>>> >
>>>> > 3. Built-in to the browser or OS. In this case I think it's outside
>>>> the W3C
>>>> > WG's scope to define the delivery mechanism for messages between the
>>>> UA and
>>>> > the wallet service but the standard could still mandate that the
>>>> messages
>>>> > passed between the UA and wallet must follow the standard format.
>>>>
>>>> Saying that there can be three different types of wallet and not
>>>> defining how they really work seems dangerous to me.  It makes the
>>>> wallet concept like a black box, which means an essential part of
>>>> the system is not defined by the standard, and thus unlikely to be
>>>> sufficiently open.
>>>>
>>>
>>> Need a "wallet" by anything more than a list of payment instruments?
>>>
>>
>> Yes.
>>
>> As I said to David, wallets need to know how to use a payment instrument
>> according to the rules of the scheme for which the instrument is issued.
>>
>>
>>> I would expect the system to have a list of payment instruments provided
>>> via a system-specific API.
>>>
>>
>> Why system specific? The standard is aiming to define a set of standard
>> messages that the wallet must process and a set of standard responses the
>> wallet must return. The actual delivery mechanism may differ but the
>> messages and flow will be standardized.
>>
>>
>>
>>> Likewise, the browser might maintain some web payment instruments in its
>>> own database that it merges with system instruments to display to the user.
>>>
>>
>> Why would the browser display the list of instruments to the user? The
>> intention is for the browser to simply be a proxy of messages between the
>> wallet and the calling application.
>>
>> If the wallet is built into the browser then it may be the component that
>> prompts the user but if it is not then I'd expect the wallet service itself
>> to display this UI.
>>
>> The "merging" you describe is what we have called an aggregation service
>> but I'd recommend that the browser doesn't attempt to do this but rather
>> allow user's to configure the browser with their preferred wallet.
>>
>> Browser can take on this role if the user hasn't explicitly configured
>> another wallet and I'd recommend that the standard makes it mandatory to
>> allow users to pick a wallet other than the browser.
>>
>>
>>> How these are stored or retrieved in any particular situation isn't
>>> something that can or should be standardized.
>>>
>>>
>> Correct. Wallets are free to store and retrieve instruments and the
>> meta-data they require as they wish. Some schemes will define how this must
>> be done if the data is sensitive.
>>
>> Alternatively the mechanism that is used may be a competitive
>> differentiator for a wallet. Example: a wallet that supports Bitcoin may
>> support a sophisticated multi-sig or hardware-based mechanism for executing
>> transaction.
>>
>>
>>>
>>>
>>>
>> I think the term "wallet" is confusing since it gives the impression that
>>> there's a thing people can point to that has specific properties. I would
>>> personally prefer if it was just replaced with "list of payment
>>> instruments" every time it appears.
>>>
>>>
>> The wallet is a thing that people WILL point their browser to that does
>> have specific properties. The most important will be that it supports the
>> APIs we are defining. It is NOT just a list of instruments. It maintains a
>> list of instruments that the user has registered but also has knowledge
>> about how to use those instruments.
>>
>>
>>> Brett
>>>
>>
>>
>