Apple working on peer-to-peer financing system
Apple is reportedly working on a version of its digital wallet that will allow users to engage in peer-to-peer financial transactions, thereby allowing its customers to avoid paying the fees charged by credit card companies to use their payment networks. Apple's design will allow two parties in a transaction to make payments between them, which are authenticated by a third party; the details of this process can be found in the linked article.
In January 2013 we posted a report titled "Apple Thinks outside the Box with Cash Dispensing Network." That particular invention was designed to be a part of "Wallet"(previously Passbook). The Wallet app invention at that time was shown to offer a series of future services including a number of sub categories for credit, debit and a new one related to their newly proposed ad-hoc cash dispensing network using iTunes and Maps. Apple stated that there were times when users just needed cash and without an ATM in sight their new network would be able to bring a cash requester together with a cash provider using a new App that made the processes somewhat painless. Today, the U.S. Patent & Trademark Office published a patent application from Apple that reveals a possible new method to allow two iPhone users with Touch ID to make a private sales transaction. This could be handy for small businesses and even those holding a neighborhood garage sale and beyond.

Apple's Patent Background

There is presently increasing interest in using electronic devices to conduct financial transactions. However, it can be difficult for individuals to directly conduct financial transactions with each other using their electronic devices. For example, credit-card transactions are typically processed by a payment network, and it can be complicated and time-consuming for individuals to interact with a payment network to conduct a financial transaction with each other.

In addition, credit-card providers usually charge higher fees for financial transactions where there is no proof that a physical credit card was present. If two individuals attempt to directly conduct a financial transaction, they may face higher fees, which may discourage them from using their electronic devices to conduct the financial transaction.

Apple Invents Person-to-Person Payment System

Apple's invention generally relates to wireless communications, wireless electronic devices, and more specifically to techniques for conducting financial transactions by communicating encrypted financial credentials between the wireless electronic devices.

Using electronic devices (such as cellular telephones) that communicate wirelessly, two individuals can make person-to-person payments. In particular, an individual using an electronic device may identify another proximate electronic device of a counterparty in a financial transaction, and may provide an encrypted payment packet to the other electronic device that includes: a financial credential for a financial account of the individual, a payment amount, and a payment sign.

When the other electronic device receives the encrypted payment applet, the counterparty may accept the payment in the financial transaction specified by the encrypted payment packet. Then, the other electronic device may provide the encrypted payment packet and another encrypted payment packet (with a financial credential for a financial account of the counterparty, the payment amount and the opposite payment sign) to a third party that completes the financial transaction. Subsequently, the electronic device and the other electronic device may receive a notification from the third party that the financial transaction is complete.





Apple notes in patent FIG. 7 that a user interface, associated with the passbook (now Wallet) may be used to identify proximate electronic devices and/or to specify details of the financial transaction (such as the payment amount and the payment sign).

In particular, the user interface #700 may display electronic devices that are proximate to the user's electronic device (for example, the proximate electronic devices may be identified via wireless communication). The user may select one of the displayed electronic devices by touching an icon that represents an electronic device. Next, the user may enter a payment amount (and payment sign) into a displayed window in the user interface. If the user has not already activated or selected a payment applet, the user interface may then display available payment applets (which are proxies for financial vehicles, such as credit cards, associated with the financial accounts), and may receive the user's selection.

In addition, if the selected payment applet requires authentication, and the user has not already been authenticated, the user interface may display a prompt to the user to provide authentication information (such as 'please touch the fingerprint sensor'). This prompt may be displayed until the user has been successfully authenticated.

Furthermore, the user interface may intuitively indicate that the financial transaction is pending (using an hourglass or by modulating the intensity of the selected displayed electronic device). Once the financial transaction is complete, the user interface may eliminate these intuitive sensory clues and/or may display a window that indicates that the financial transaction was completed.

In Apple's patent FIG. 8 noted above we're able to see a flow diagram illustrating a method for providing prepaid credit to a financial vehicle associated with one of the electronic devices

Patent Credits

Apple credits Senior Director of Apple Pay Engineering Timothy Hurley who came to Apple from Citibank, as one of the inventors of this invention along with Apple Pay engineer Ahmer Khan. Apple's patent was originally filed in Q3 2014. Considering that this is a patent application, the timing of such a product to market is unknown at this time.

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