Square Patent Could Give Merchants Point-of-Sale Crypto PaymentsAug 30, 2018, 9:50AM
Square has filed a patent for a point-of-sale crypto payment network. Will the product come to fruition, or is Square just carving out a niche?
Square, a leading payment processor, has won a patent for a crypto payment network that would allow merchants to accept cryptocurrency and seamlessly convert it to fiat. This would work in a manner similar to other point-of-sale apps such as Bitpay and Blockchain Merchant.
Square already provides some crypto-related features in its Cash App, and a BitLicense-approved option to buy and sell Bitcoin was added this year. However, these features are not perfectly integrated with Square's point-of-sale tools, which mainly interface with traditional credit cards. The patent is fairly elaborate, but, suffice it to say, Square's existing payment system could be extended to support crypto.
Not everyone supports Square's proposal. The patent suggests that Square will use a private blockchain, which to some is an unwelcome rejection of the transparency and decentralization offered by the public blockchain. One Redditor argues,
They're going to have a wallet which records off chain balances/transactions on a private blockchain. You'll have to have a funded square wallet for this to be useful for you [...] the set up here will give square power to charge large transaction and withdrawal fees / UpDown on Reddit
Those in favor of Square's proposals argue that it is necessary for Square to handle security and processing in a centralized manner in order to create a streamlined and efficient payment system for merchants.
Regular joes can be their own bank but for businesses to take [crypto] they need a vehicle in place to do so. You can't expect a small business to run [...] a Jaxx wallet [...] That is not economical and it's a huge liability for a business owner. / Native411 on Reddit
In the meantime, the world continues to inch toward mass adoption of crypto. Other payment processors have been filing patents in order to carve out their own niche; Mastercard recently filed a patent that would convert crypto to fiat, and PayPal has filed a patent that will speed up crypto transactions. As with any patent, it's difficult to say whether the proposed technology will come to fruition.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.