To apparently give the public an alternative to the Bitcoin, JP Morgan recently made a move to patent a new online payment system that will allow users to use digital wallets without being identified.
Growing public patronage
The Bitcoin, a decentralized online currency, has steadily gained public patronage since it was introduced in 2009. Due to its attractive feature of anonymity in which the payer’s identity is difficult to trace, many online users have resorted to Bitcoin method of fund transfer. Seeing the advantages of this online currency method, JP Morgan has patented a similar transaction scheme with more modern aspects.
Patent application
In seeking a patent last August 5 at the U.S. Patent and Trade Office, JP Morgan Chase indicated that the features of its new digital payment procedure comprise digital wallets that allows anyone to transact payments without going through identification process. The company has likewise sought patent for certain payment software that connects to the users’ web browser so that they can make online purchases without necessarily providing financial and personal details.
“Internet Pay Anyone Account”
JP Morgan calls its recently developed payment system as “Internet Pay Anyone Account” because an individual can easily course funds to another person or entity and yet remain anonymous. According to the bank, the method is as simple as sending emails, which can be done in less than five minutes. Furthermore, transactions are kept at a highly secured mode with no way for the recipient to know where the fund transfer comes from.
The system also makes use of a “virtual private lockbox” in which the recipient can publicly post the digital address of the sender with no risk of anyone using the information to draw money from the account. Although the newly patented banking scheme is very close to Bitcoin, the similarity was not pointed out in the patent application filed by JP Morgan. However the application stated that the existing online financial method is already old-fashioned, hence there is a need to introduce a more modern and safer program.
Obsolete practice
JP Morgan specified two points that makes the usual banking practice obsolete. First, the system enables a direct connection between the traders and the purchasers. In addressing this setback, the bank does not approve of using intermediaries to mediate in the transactions, as they will only cause delay in the payment transfers. Second, the current online payment system commands high fees for every deal, even for small purchases. For the bank, this arrangement is not practical at all.
Beneficial for both parties
The newly patented online payment method is said to be beneficial for both merchants and consumers. JP Morgan states in its license application that the said modern transaction approach assures actual payments in real time with lower fees for more amounts involved. The program also makes use of cryptography to ensure tighter security for traders that avail of the system.
Downside
Financial analysts welcome the new online payment system patented by JP Morgan as it is another step forward in the world’s fiscal organization. On the other hand they also remind that in October, the Federal Bureau of Investigation (FBI) moved for the closure of a website named Silk Road. This online trader has been found as an illegal drug provider. The FBI reported that it has seized around 144,000 bitcoins valued at $28.5 million based on present currency trading rates.
Photo Credit: JP Morgan Chase Tower
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