Payment processing giant PayPal is looking at getting further involved in cryptocurrency payments with a new method of enhancing the speed of transactions between buyers and sellers.
In a U.S. Patent and Trademark Office (USPTO) application filed on March 1 titled “Expedited Virtual Currency Transaction System,” PayPal outlined plans to create a more efficient way for buyers and sellers to process cryptocurrency payments. The new system would provide a method for swapping private keys -- the addresses in which cryptocurrency is stored -- rather than sending virtual currencies from one account to another which, depending on the currency, can take some time.
Currently, some merchants are hesitant to accept payments via cryptocurrency due to the amount of processing time they can require. PayPal’s system would make the payments instant and would avoid the amount of time it requires for a transaction to move through the blockchain.
“Issues like this have slowed the adoption of virtual currencies despite their advantages”, the patent states.
Their system, which is currently in development, proposes a method in with the private keys would be stored with, and generated by, PayPal, and when a transaction is made the keys would be sent to a seller with the exact amount of a specific cryptocurrency.
“The systems and methods of the present disclosure practically eliminate the amount of time the payee must wait to be sure they will receive a virtual currency payment in a virtual currency transaction by transferring to the payee private keys that are included in virtual currency wallets that are associated with predefined amounts of virtual currency that equal a payment amount identified in the virtual currency transaction.”
The submission for this new technology comes several years after PayPal first started allowing merchants utilizing their system to accept Bitcoin payments and comes just weeks after PayPal’s Chief Finance Officer publicly stated that Bitcoin has a “very high likelihood of success.”
PayPal’s positive outlook towards cryptocurrencies is unusual in the finance sector, with most major banks describing it as a “fraud” and a “bubble.” Although this technology is still in the early development stage, it could ultimately aid in widespread adoption for cryptocurrencies as means of payment.