JP Morgan Chase is reportedly trying again to patent a system for a Bitcoin alternative, according to columnist Ian Allison in the International Business Times.
The patent application, which was originally filed in 2001 and has been repeatedly rejected, describes a way for users to push an electronic funds transfer credit from a special Internet account to a merchant’s account, without the user having to provide his or her own sensitive account information. JP Morgan’s “web cash” invention uses what the application calls an account reporter, which is similar to the publicly available and permanent ledger of Bitcoin transactions, the block chain.
JP Morgan sees a new marketplace emerging for “low dollar, high volume, real-time payments with payment surety for both consumers and producers”, the patent application says.
JP Morgan Chase declined to comment on its patent plans. If the patent were approved, it could allow the bank to claim patent infringement against not only Bitcoin and other cryptocurrencies, but also against other banks developing similar systems. The CEO of Russia’s state-owned Sberbank, Herman Graf, recently said his bank intends to create its own virtual currency based on its Yandex Money electronic payments service.
But whether the patent is approved or not, the people who should really be concerned are traditional payment systems, based on the legacy capabilities of credit or debit cards, columnist Allison writes, adding that it represents “the evolution away from a traditional ‘pull’ transactions model, in which a merchant must receive the consumer’s account number and in some cases PIN number” to process a transaction.
