The age-old question is: How do you create a standard that works for every digital payments innovator – and the consumers and businesses they serve – when the starting points for those innovations reflect their very different origins and digital strengths?
It’s a question that’s very top of mind across the payments and commerce ecosystem, and particularly relevant in mobile and desktop commerce. The complexity is increasing as the interactions between technology, the players who innovate using it and the consumers who use that tech become more intertwined.
Of course, mobile and digital are the ways we transact, and increasingly will in the future. Digital enables a whole new set of payments experiences across a variety of new environments – think messaging, the mobile browser, marketplaces and apps. And technologies are enabling those commerce experiences through a variety of new channels – think voice and augmented reality. Consumers expect a consistent and seamless experience across all of those – just like they have today when they whip out their plastic cards at the traditional points of sale in the offline world.
As with any transition, the fragmented nature of the solutions and the innovators who enable them means that it’s messy – with different experiences for consumers and the merchants who can deliver that consistent experience across all of those devices, operating systems and channels. Interoperability among solutions is messy, too – time-consuming and expensive and, in some cases, simply not possible.
Unlike the physical world, where a global standard has been agreed to and adopted over a number of decades, no such universal standard yet exists to guide the payments experience in the mobile, digital world.
In an interview with PYMNTS’ Karen Webster and as a follow-up to a panel at the World Wide Web Consortium (W3C for short), Sang Ahn, Samsung VP and GM of Samsung Pay U.S., noted that standardization is an easy enough concept, though in practice it is anything but.
Ahn told Webster that one of the challenges of creating simplified and unified payments practices lies in the fact that standards are “being approached by different standards bodies,” including the W3C, FIDO and EMVCo – with the last one, for example, focusing on payment tokenization geared toward eCommerce to be presented during mobile checkout. Other bodies may view standardization through web-based browsers.
In the absence of a standard, solutions providers are forced to ensure the creation and execution of innovative ideas that solve digital payments friction for consumers and businesses – while the long process of standards formation and execution (the sausage making) happens in back rooms, over years and possibly decades.
“A standards approach is a committee approach," said Ahn, "and while committees can put their best thinking together on a topic like remote commerce, committees comprised of different interests also take time to reach consensus” where the reach is global, dynamic and messy.
Samsung’s position, Ahn confirmed, is that all standards are great because given the fragmentation of online checkout and remote checkout, if the industry can agree to doing a few things uniformly, everyone wins.
Winning, Ahn told Webster, is creating a continuum of experience for consumers and merchants. In Samsung’s view, that can happen if payments are presented online in a standardized way, so there is one consistent means by which consumers pay across all devices, operating systems, apps and browsers. Creating that standard flow is a win, Ahn believes, since it will habituate consumers in how to present and pay online. A consistent experience is the rising tide that lifts all digital and mobile payments boats, Ahn remarked. He also sees value in taking that standardization a step further by having a single, standard way to write merchant page applications.
Not everyone agrees.
Standardization also means balancing the needs and desires of all of the players throughout the ecosystem. For example, Ahn remarked, if the industry standardizes against browsers, the major browser players have an advantage – standardizing against identity gives a totally different set of players an advantage.
Pushback may also come from entrenched firms, who ask why laggards should be allowed to catch up. Companies of all stripes and sizes may be fretful about existing cost structures, and investments in technologies and processes that span years and significant amounts of money.
And then, as with most things innovative, time is a valuable currency.
Even though technology moves quickly (especially in the evolution of hardware), standardization across payments experiences takes time. That’s especially true on the web, where any number of players operating across any number of digital channels – some of the giants, such as Google, Amazon and Samsung – are able to carry on via their own accord in an effort to move past the logjam and become the de facto standard.
Even that takes time.
“As much as we’d like it to be different, it’s well known that payments, even digital payments, don’t move at internet speeds,” Ahn remarked. “The payments ecosystem has grown up on top of enabling infrastructure that makes any change complicated and time-consuming.”
To find common ground, and movement beyond the crossroads of software and hardware and processes, Ahn said there will likely be experiments “that are less than ideal for any one individual company,” but could work through compromise.
“We think there should be equal access and equal opportunity for each of the digital wallets – and the same should hold true for eCommerce tokens,” Ahn emphasized.
What seems clear is that getting agreement around a simplified and unified digital payments practice is the only way that we, as a payments and commerce ecosystem, can create the next jump in usage and adoption of remote checkout standards.