Square Secures Patent That Would Allow Merchants to Accept Cryptocurrency Payments
Mobile payment processor Square Inc. has secured a new patent that allows merchants to accept cryptocurrency payments, a move that could hasten the adoption of digital assets among consumers and businesses.
Crypto Payment Network
According to public documents obtained on Aug. 21, Square was approved by the U.S. Patent and Trademark Office (USPTO) to begin developing a new system that allows merchants to accept payment in any currency, including crpytocurrencies. The patent was filed in September 2017.
The patent states the following:
“The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies…including virtual currencies including cryptocurrencies (bitcoin, ether, etc.)…than a traditional payment system in a transaction between a customer and a merchant, and specifically for a payment service to solve or ameliorate problems germane to transactions with such currencies. Specifically, the payment service described herein can facilitate real-time (or substantially real-time) transactions, allowing a customer to pay in any currency of their choice, while the merchant can receive payment in a currency of their choice.”
The San Francisco-based company currently helps millions of sellers accept credit and debit card payments online and in person through mobile or countertop readers.
In the last quarter, Square’s gross payment volume reached $21.37 billion, according to Statista. In 2017, the company generated annual net revenue of $2.2 billion with transaction revenue accounting for more than 87% of the total.
Square was founded in 2009 by Jack Dorsey, the co-founder and CEO of Twitter. Dorsey is an avid proponent of cryptocurrencies and believes bitcoin will become the world’s ‘single currency’ in roughly ten years. It’s therefore no surprise that his company is leading efforts to integrate crypto payments in traditional consumer circles.
Bitcoin’s Latency Issue
Square’s patent not only allows merchants to accept cryptocurrencies, it also purports to eliminate latency in blockchain transactions. The patent details a system whereby bitcoin and other crypto payments will be processed at roughly the same speed as credit card transactions. This will be accomplished through a private blockchain that records in real time transactions made from Square’s wallets.
While critics concede that bitcoin and other digital assets represent a store of value, their acceptance among mainstream circles won’t be complete until regular shoppers can pay for goods and services using their crypto wallets. Although merchant adoption is growing in key Asian markets such as Japan, where bitcoin is considered a legitimate payment method, crypto payments represent only a small fraction of the blockchain market.
Efforts are currently underway to change that. In addition to Square’s payment network, a new startup by the name of Bakkt is looking to integrate bitcoin payments into the mobile shopping experience. Backed by Intercontinental Exchange, Starbucks and Microsoft, among others, Bakkt is looking to tap into a global economy that spent roughly $25 trillion in credit card and online shopping fees.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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