Amazon.com Inc. filed an application with the United States Patent and Trademark Office on April 16, 2013, to patent a mobile payment system that would not reveal the identities of the parties to transactions. The application describes a mobile transactions system in which servers employed by an independent intermediary would provide electronic tokens to authorize payments while holding and securing the personal information of the two parties.
The system would allow consumers and retailers to conduct transactions without revealing such commonly required information as the buyer's name, telephone number or email address. The system would also allow anonymous transactions to be initiated by either the buyer or seller. Both parties are required to have an account with the intermediary to conduct the anonymous transaction (presumably this would be Amazon).
The system would also incorporate a short message service text message from the buyer, reserve payment in an account unavailable to the buyer, create a token to enable the buyer to make an anonymous payment without sharing personal information with the seller, and transfer the payment amount from the buyer to the seller.
Payment attorney Adam Atlas said Amazon's patent application could indicate the retailer is ready to challenge Bitcoin and other purveyors of virtual currencies. As interest in bitcoins grows, however, the currency is gathering government scrutiny because of a potential avenue it provides for money laundering and purchase of illegal goods. Atlas added that the security and value of such currencies remain open to question, as well.
"This Amazon patent has got Bitcoin written all over it because it is aimed at one of the big selling points of Bitcoin: it is anonymous," Atlas said. "I think the issues you find with Bitcoin are similar to what lies ahead for Amazon if it adopts an anonymous payment system."
According to Atlas, people typically seek anonymity in transactions for four reasons: they are buying something illegal, ashamed of a particular purchase, philosophically opposed to revealing personal information in a monetary transaction, or do not trust the seller.
Atlas also noted that these payments would not be truly anonymous because the intermediary would hold the user information. If Amazon were to implement its anonymous payment system, it would still likely have to report suspicious transactions and payments of more than $10,000 to the Financial Crimes Enforcement Network and other regulatory agencies, he said.
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