Magazine article American Banker

Google Tackles Phone Pay

Magazine article American Banker

Google Tackles Phone Pay

Article excerpt

Google Inc. has applied for a patent covering a person-to-person mobile payment system that uses text messages, which could move it further into the banking market.

Industry watchers said that the Internet powerhouse certainly would bring new attention to the fledgling market for mobile payments, but they questioned whether any company could claim broad proprietary rights to the process.

Google, the operator of the popular Internet search engine, published its Patent and Trademark Office application last week for a "Text message payment" system, which it called "Gpay."

According to the application, people could use a mobile phone or other device to make a payment to other Gpay users with funds from, for example, bank accounts, credit cards, or prepaid accounts.

The Mountain View, Calif., company listed several examples of situations in which people might use the system, typically as a replacement for cash. These examples included purchasing vegetables at a farmers' market, paying for gardening services, or buying snacks from a vending machine.

Google already offers the Checkout service, which lets merchants accept card payments for online purchases.

And though a person-to-person service might seem like a logical next step, a Google spokesman said Wednesday that it may not ever turn the idea into a reality.

"We file patent applications on a variety of ideas that our employees come up with," the spokesman said. "Some of those ideas later mature into real products or services. Some don't. Prospective product announcements should not necessarily be inferred from our patent applications."

The application was filed in February of last year and named Ramy Dodin, a Google software engineer, as Gpay's inventor.

James R. Burdett, a partner in the intellectual property practice of the Washington law firm Venable LLP, said Google's decision to publish the application could indicate the company intends to apply for similar patents internationally, because other countries require such applications to be published domestically before they can be filed elsewhere.

But he questioned whether Google or any other company would be able to claim patent rights for such a payment mechanism.

"Patenting the general concept of sending a text message to make a payment is going to be difficult for a number of reasons," Mr. Burdett said. One involves the question of "obviousness," since a Supreme Court decision in April raised the standard for evaluating such questions.

Several other companies, including eBay Inc.'s PayPal Inc. unit, Obopay Inc., and ClairMail Inc., already offer text-message payment systems.

Mr. Burdett said that PayPal has received three "nonfinal rejections" of its patent application for its PayPal Mobile system, most recently in June. …

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