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According to a document revealed by the US Patent & Trademark Office, Square’s patent will allow purchases between customers and merchants to be done in any cryptocurrency.
Digital payment service provider Square (NYSE:SQ) has officially upped its game in the cryptocurrency world.
On August 21, it was revealed by the US Patent & Trademark Office (USPTO) that the company’s cryptocurrency payment network has been approved. According to the documents, the system will allow users to pay in any currency of their choice with merchants being able to receive any currency.
The patent application was initially filed by Square in September of last year.
In the abstract, it said that the current technology supports cryptocurrency payments but will improve the transactions “in a way that takes advantage of benefits of such transactions while overcoming drawback such as delays in processing.”
Square describes the present technology allows a first party to pay in a currency of their choosing while allowing the second party to receive the funds in any currency. As a result, the technology is beneficial in that it eliminates barriers to transactions that could “inhibit international commerce, or commerce with certain types of currency.”
“The disclosed technology addresses the need in the art for a payment service capable of accepting a greater diversity of currencies including fiat currencies … and non-fiat currencies including virtual currencies including cryptocurrencies … commercial paper … and securities,” the document explains.
The patent also says that with the inclusion of a trusted payment service, the current technology can bump up the trust in transactions occurring in more than one currency.
“Such increased trust can also be an important benefit of the present technology when a party to the transaction wishes to remain anonymous to another party in the transaction,” says the document. “Anonymity can reduce trust, and in some cases, transactions with anonymous parties can even be illegal.”
That being said, Square’s patent says the technology has methods in place surpass those concerns, particularly as it relates to cryptocurrency transactions.
While Square has traditionally been a fintech and mobile payment solutions company, it has certainly been making its presence in the crypto space known–at least in the long term.
In its Q2 financial results issued in early August, the company reported US$37 million in revenue related to bitcoin. However–the company spent almost that amount to offer cost-free trading cryptocurrency trading on its Square Cash App, which was launched in January of this year.
Square holds a select number of cryptocurrencies in the app on behalf of its users so they can buy and trade bitcoin instantly. In that regard, the company’s patent also alludes to the potential for bitcoin payments being done through the app. The company first began trading bitcoin late last year.
The last trading week has reflected positively on Square’s share price. Case in point, on Wednesday (August 29), CNBC reported that Guggenheim named the company as the best “new idea” and “highest conviction name” in the fintech space. As a result, the company’s share price rocketed by 6.12 percent on Wednesday alone to close the trading session at US$85.70.
Following the patent application details on August 21, shares of the company have increased from US$75.19, representing a 14 percent increase.
CNBC further reported that the firm raised the share price target for Square from US$75 to US$100.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.