Western Union Pursuing Cryptocurrency Patent for Secure Transfer System
Global money transfer service Western Union has submitted a patent for a new payment system powered by cryptocurrency. The news, which was first reported by CCN, is the latest sign that global payment providers are pivoting toward blockchain and cryptocurrency for security, liquidity and faster transfers.
Western Union’s filing with the U.S. Patent and Trademark Office was published Thursday in an abstract that describes a new method for increasing the security of electronic payments. The patent, which was originally filed in December 2016, proposes a biometric verification system to ensure that senders authorize transactions. This form of veridication requires fingerprint, voice sample or retina scan.
According to the official documents, Western Union’s proposed system is designed to operate as a general purpose tool, which means it will accommodate most types of electronic networks, including cryptocurrencies.
Regarding the integration of cryptocurrencies, the patent application states the following:
“Thus, in various embodiments, electronic transfer network may be configured to support and perform transfers of various currency types, including traditional and/or digital currencies, centralized and/or de-centralized currencies, cryptocurrencies, and any other medium of exchange (e.g., credit, gift cards or certificates, points in a user point system, etc.), between client devices and/or external systems in different areas, regions, or jurisdictions.”
Moving Beyond Ripple
Back in February, Western Union announced it will pilot Ripple’s xRapid system for certain payment corridors. At the time, the company was in the process of exploring possible blockchain operations for its underlying business, including a focus on transaction processing, settlement, regulatory technology and digital identity.
Roughly six months into the pilot, Western Union CEO Hikmet Ersek said his company has yet to see any cost savings that warrant full-scale adoption of XRP systems for cross-border payments.
“We are always criticized that Western Union is not cost-efficient, blah blah blah, but we did not see that part of the efficiency yet during our tests,” Ersek told Fortune last month. “The practical matter is it’s still too expensive.”
Although Ersek did not elaborate on why xRapid failed to bring efficiency gains, Western Union’s patent suggests the company has been thinking about integrating blockchain for quite some time.
On the subject of Ripple, several payment processors have signed up for xRapid, chief among them being MoneyGram, one of Western Union’s biggest competitors. The xRapid pilot program has also received support from MercuryFX and IDT, among several others.
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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