6 fintech patents to watch

The payments industry is a hotbed of innovation, and many of its larger players are eager to claim patents on new developments.

These inventions cover retail payments, processing, blockchain and even augmented reality.

This story was compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun, Michael Moeser and Daniel Wolfe.

Amazon's palm-print payments
Amazon Go glassgate turnstiles
An Amazon.com Inc. employee scans in to shop at the Amazon Go store in Seattle, Washington, U.S., on Wednesday, Jan. 17, 2018. After more than a year of testing with an employee-only focus group, Amazon Go opens to the public Monday in downtown Seattle, putting to the test the online retailer's technology that lets shoppers grab what they want and leave without paying a cashier. Photographer: Mike Kane/Bloomberg
By experimenting with palm-print hand wave transactions, Amazon is putting its resources behind another work-in-progress technology that traditional retailers will almost certainly have to invest in just to keep pace.

Just as Amazon Go’s checkout-free concept sparked billions in investments into technology companies that are racing to design the same technology for traditional retailers, Amazon’s biometric payment option — which today amounts to little more than a patent application and reports of internal testing — will weigh on merchants that are already grappling with omnichannel shopping, mobile commerce and data breaches.

Handprint-supporting point of sale systems would produce shopping and payment data that would feed Amazon's cloud. That's the key element, since most of Amazon's new payment innovations, such as Amazon Go or Alexa, require some form of check-in. In the case of "palm pay," an initial link to a card would be all that's needed to tie the transaction to an existing account. That allows Amazon to accumulate more actionable data.
Square's real-time transfers
Square app logo
The Square Inc. Point of Sale application is displayed for a photograph on an Apple Inc. iPhone in Washington, D.C., U.S., on Friday, Feb. 16, 2018. Square Inc. is expected to release earnings figures on February 27. Photographer: Andrew Harrer/Bloomberg
Square’s new U.S. patent covers a system that allows real-time transfers between parties using two different “assets.” Square's merchants have shown early interest in cryptocurrency payments, and if merchants accept this new concept, it could exist along with other Square services to support numerous use cases that involve cryptocurrencies, cross-border payments, e-commerce, small businesses, micro-merchants and broader financial services.

In Square’s vision, the payer can use any currency, while the recipient gets paid in any currency, with a network managing the exchange. The payment request can come in a traditional currency, while the user can satisfy that request with a cryptocurrency or another traditional currency. By using one or more data structures maintained by the payment service (i.e., Square), the transaction can be converted to the payee's desired currency in real-time. A “privacy coin” would also help execute the transaction while maintaining privacy of the parties.
Walmart's crypto coin
walmart store and customers
Shoppers exit a Wal-Mart Stores Inc. store in Princeton, Illinois, U.S., on Wednesday, March 16, 2011. More than 100 Wal-Mart Stores Inc. workers paint a similar picture in sworn complaints about the company: Local managers made sexist decisions about promotions and pay, and top officials did nothing to stop them. Photographer: Daniel Acker/Bloomberg
Last year, Walmart filed a patent application for a digital currency that, like Facebook's Libra, would be a stablecoin backed by traditional currencies. And it envisions a very specific use case where its coin could stand in for cash — or even for a bank account.

The patent mentions a hypothetical "currency micromarket," defined as "an unattended retail environment where consumers can purchase products from open shelves, coolers, or freezers and use a self-checkout kiosk to pay for their products." It sounds a lot like Amazon Go, a checkout-free retail concept that has been bogged down by lawmakers' insistence that Amazon also accept cash.

In this scenario, Walmart's coin wouldn't just be a substitute for cash; it would function more like a banking relationship: "Customers without traditional bank accounts can create a microbank at an institution such as a retailer, which gains interest while their money is there. A customer buys digital currency, such as at the beginning of a month."
Bank of America's blockchain-based wallet
Bank of America window sign
Signage is displayed at a Bank of America Corp. branch in Alameda, California, U.S., on Monday April 9, 2018. Photographer: Michael Short/Bloomberg
Bank of America is seeking patents for blockchain technology that could be used for a digital currency or mobile wallet.

BofA's patent application describes a security system for a peer-to-peer network with a digital wallet interface, providing that interface to a user's computing device and instructions for tiered password system.

The bank contends that security for digital currencies is not adequate and that there is a need for "better" digital wallet infrastructure.

"With the increasing amount of attention being placed on digital currencies such as bitcoin and ethereum, it has become vital to develop digital wallet infrastructure so that holders of digital currencies are able to store their coins safely and securely," the application reads. "However, existing digital wallet infrastructure is underdeveloped and provides many pathways for failure and exploitation."
More blockchain patents
JPMorgan Chase logo signage
A JPMorgan Chase & Co. logo is displayed outside a bank branch in Chicago, Illinois, U.S., on Tuesday, July 10, 2017. Photographer: Christopher Dilts/Bloomberg
JPMorgan Chase filed a patent application in 2018 for blockchain-supported transfers, using distributed ledgers to move funds between banks in a manner similar to a P2P network.

This would allow settlement to happen faster and at less expense, according to the bank.

It's the latest large financial firm to file for a patent on emerging payments technology.

Mastercard has been filing for blockchain-related patents for years. A 2018 filing, for example, covers data manipulation to improve blockchain navigation.

That would make it easier to verify a large number of blocks and shorten the time required for a new node to participate in the blockchain.
PayPal's augmented reality glasses
PayPal signage
Pedestrians walk past PayPal Holdings Inc. signage outside the company's headquarters in San Jose, California, U.S., on Tuesday, Jan. 24, 2017. PayPal Holdings Inc. is scheduled to release earnings figures on January 26. Photographer: David Paul Morris/Bloomberg
In 2018, PayPal dusted off the idea of conducting commerce augmented reality glasses, a concept that fell flat five years earlier. But a half decade is an epoch in technology time, enough to reevaluate the competitive necessity of AR payments.

For one thing, PayPal's innovation is more about augmented reality than it is about high-tech sci-fi glasses, which are just one possible delivery venue and not even the top of PayPal's "refresh" of a two-year-old patent application. The patent application deals more with how data is transmitted from a target object and made visually available as an overlay than it is in embedding that technology into a specific device.
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