Who Goes There? Protecting Intellectual Property Relating to Payment Innovation

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The payments space is undergoing a period of rapid innovation, resulting in traditional financial institutions competing more and more directly with large technology companies such as Apple, Google, Samsung and Facebook. Unsurprisingly, various players in the payments industry have been filing patents to protect their proprietary technologies for various payment functionalities, ranging from central elements of a payment transaction (such as core payment processing algorithms), to other ancillary, but necessary, aspects of a payment transaction, such as authentication and tokenization methods.

Apple has been active in filing patents covering vastly different technologies in the payments space. For example, two of its recently published US applications relate to: a ring-based system for executing electronic payments and an electronic payment system secured by a touch from a user.

 Not surprisingly, Samsung is also very active in filing patents for its payment technologies. One of its recently published applications relates to a contactless fingerprint authentication system that scans a user’s fingerprint and authenticates the user after analyzing the fingerprint. Notably, Samsung’s technology has the potential to work in conjunction with any payment system. This may allow Samsung to have an important presence in the payments space.

Earlier this year in February Google acquired Softcard, a mobile-wallet company that was previously a joint venture between AT&T, T-Mobile and Verizon, in part for Softcard’s patent portfolio relating to mobile wallet technology.

The above are just a few examples of recent patent activity in the payments space. Robust patent portfolios are strong offensive and defensive assets that industry players are using to protect their technologies, access third party technology on favourable terms and fend off patent infringement challenges from their competitors.

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