Could paying with bitcoin soon be a common thing for purchasers?
In news out this morning, it was revealed that Square won a patent for a cryptocurrency payment network.
The news release can be found here:
The patent says that Square now has a payment network that would better allow for merchants to accept payments in any currency they wish, which includes cryptocurrency.
The US Patent and Trademark Office approved Square's application to create a system that would allow for merchants to accept cryptocurrency alongside any other form of payment they choose.
They would be able to receive the payment in any currency of their choice if they do not want to hold cryptocurrency due to volatility.
Which seemed to be one of the biggest hurdles preventing wider adoption, well that and the speed of transactions.
Some of the wording from the patent:
"The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies…including virtual currencies including cryptocurrencies (bitcoin, ether, etc.)…than a traditional payment system in a transaction between a customer and a merchant, and specifically for a payment service to solve or ameliorate problems germane to transactions with such currencies. Specifically, the payment service described herein can facilitate real-time (or substantially real-time) transactions, allowing a customer to pay in any currency of their choice, while the merchant can receive payment in a currency of their choice.”
Why is this significant?
Square would not be the first to convert cryptocurrency into fiat for merchants, Bitpay has been doing something similar for some time now.
However, Square has a much greater market penetration and significantly more resources to get their system widely adopted.
Also, they plan on eliminating transaction latency.
Meaning, they plan on removing the biggest or second biggest issue merchants have with using bitcoin and other cryptocurrencies as a payment option.
How are they going to do that might ask?
This is from the release:
"The payment service will accomplish this by maintaining a private blockchain that records transactions from Square-managed wallets in real-time, allowing the POS system to identify the changed balances before the transactions are written to the public blockchain. According to the patent, this does not completely eliminate the risk of double spend attacks, but it transfers that risk from the merchant to the payment service."
That is YUGE!
It looks like most, or all, of the risk would be transferred back to the payment processing company, which is very similar to how credit cards function.
No worry about volatility and no worry about transaction speed?!
Something like that could really catch on if it were marketed and pushed by Square.
Greater adoption could well be on its way.
Stay informed my friends.
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