RE: Suggest all WPIG have text on: Goal to advance economic/financial inclusion for unbanked/underbanked

Hello Adrian,

Many thanks for your thoughts and the interpretations on what it means to our group. I can agree to almost all of the points you made, but would like – as an ‘old hand’ in identity management – add another view point on identity in the light of payment:

Throughout higher developed cultures, money has been stablished as a means to transfer values (phase 1). Money needs to be hard to copy (authentic) but easy to pass along. The latter is getting harder when the distance gets greater, which kind of led to the development of banks, in  the end coming up with (politically enforced) rules for identity (KYC) and a few other controls for the flow of money (phase 2).

In my understanding this IG decided to take on the challenge of authenticity first to establish a solid fundament. If well done, it should actually be very useful to even help those transferring money remotely, who are not yet fully established in phase 2. Because it’s digital, it can be transferred over distance, and since we can prove authenticity digitally, we should be able to help even if some of the rules the developed countries are regarding as necessary and normal, might not be in place (yet).

I think that the payment products which have been successful e.g. in Africa, did exactly that – they don’t require people to be ‘banked’, but they can shift money from A to B. If the volumes become too high, suspicious or whatever, it will be up to the governments to impose rules. This should be much easier to do if you can set limits to make it worthwhile, running through identification of an individual.

Cheers,
                Jörg

From: Adrian Hope-Bailie [mailto:adrian@hopebailie.com]
Sent: Montag, 27. Juli 2015 11:16
To: Manu Sporny
Cc: Web Payments IG; Pindar Wong; Primavera De Filippi; James Dailey
Subject: Re: Suggest all WPIG have text on: Goal to advance economic/financial inclusion for unbanked/underbanked

Hi all,

This may not be a popular response but I thought someone needed to play devil's advocate (please note that this is my personal view, although that should go without saying).

I would love our vision to include a utopian world where we solve world hunger and end all wars but we need to be cognizant of what is practical for our group to genuinely influence. It's a personal bugbear of mine how often companies or groups place themselves under the banner of "improving financial inclusion" when they have no practical plan to do anything but wring their hands and talk about the problem.

The "financial inclusion of the unbanked and underbanked" is a fantastically exploited phrase that everybody loves to bandy about as something they are trying desperately to solve and I don't want us to be one of those unless we have some real plans to make a difference. How will financial inclusion be addressed using the Web and specifically how will new Web standards be a part of that solution?

The reality is that the majority of the unbanked and underbanked are in the situation they are in because of issues of identity. The developed world has decided that you may not have access to banking services if you can't prove who you are and the less developed world must now play by those same rules, no matter how practical it is to do so.

The traditional banking system is unable to viably support the bottom tier of customers because the onboarding cost of an individual by a traditional bank (KYC etc) will never be recovered, assuming the potential customer even has the necessary documents or proof to follow a traditional KYC process. Banks are not charities so offering financial services to this tier of customer is simply never going to come from the traditional banking industry. There are almost weekly news releases about how crypto-currencies will swoop in and resolve this but I'm yet to see a practical example of how this will be achieved. I suggest that you challenge anyone that tells you they are trying to address the problem of the unbanked with the question: "How?". It's easy to say that it's important, organisations like CGAP have proven it's value beyond doubt, but it's a lot harder to implement solutions.

At the F2F in NYC it was clear that identity is something the group is not keen to try and take on right now. We all see it as important but not important enough to be in scope for our first WG. So that leaves me wondering, how do we plan on impacting financial inclusion through the narrow scope of our current WG charter? I assume we agree that we are not so then I propose it is not mentioned in that charter at all.

In terms of the IG's vision, I'm on the fence. I see indirect benefits that our work, specifically the Internet of Value CG and Credentials CG work, will have for financial inclusion eventually but the resounding apathy with which our group dealt with the Credentials CG's attempts to charter a WG suggests to me that the IG claiming it genuinely wants to contribute to improving financial inclusion is a stretch.

As Manu correctly points out there are organisations like the Gates Foundation that are tackling this issue head on but they are doing so using simple solutions based on mobile phones and text messages. Technology will certainly play a major role in solving these problems over the coming years but the role of "the Web" is unlikely to be a major one for some time and so I am struggling to see where the W3C, and this IG, fits in today.

I wholeheartedly support any initiative that will improve financial inclusion (it has been a passion of mine for many years) and if it's something people in this group truly believe we can influence then I'm eager to hear how and make it a part of our vision.

Otherwise, I'm afraid we are at risk of being another group adding to the noise but with no practical solutions to put forward and that does more harm than good because it distracts attention away from groups like the Gates Foundation that are elbows deep in actually solving the problem.

Hoping to be wrong (and climbing off my soapbox),
Adrian

On 27 July 2015 at 04:27, Manu Sporny <msporny@digitalbazaar.com<mailto:msporny@digitalbazaar.com>> wrote:
On 07/26/2015 02:03 PM, Louise Bennett wrote:
> One of the major themes of this year's UN IGF is connecting the next
> billion. I have been inputting to the inter sessional work on this
> and have described the W3C payments initiative. The draft inputs are
> now on the web site. Manu are you planning to do anything at the next
> IGF?

Unfortunately, I'm spread a bit too thin between the Web Payments and
Credentials stuff in the technical standardization initiatives and won't
be able to participate in this years UN Internet Governance Forum.

Look out for Pindar Wong and Primavera De Filippi, as I think they
intend to do something related around blockchain at IGF.

You may also want to link up with James Dailey at the Gates Foundation
and their work on financial services for the poor.

I've cc'ed each of these people, please link up offline if you can.

> Do you want me to push this work as a sub-theme?

Yes, please, and let us know if this group (or the Credentials Community
Group) can help in any way.

-- manu

--
Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu Sporny)
Founder/CEO - Digital Bazaar, Inc.
blog: Web Payments: The Architect, the Sage, and the Moral Voice
https://manu.sporny.org/2015/payments-collaboration/