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Table of Contents

Lead Story

Mobile payments 2013 - Part 1


Industry Update

Bergeron steps down at VeriFone

New battles erupt in mobile wallet wars

LevelUp reaches 1 million users

Farewell to Mike Duffy

Trade Association News


Research Rundown

Selling Prepaid

Selling Prepaid

Prepaid Expo features ducks on a pond

ISO opportunities at Prepaid Expo


No changes in line for debit caps

Patti Murphy
ProScribes Inc.


Street SmartsSM:
Don your 'brown shoes' and differentiate yourself

Jeff Fortney
Clearent LLC

Be a true expert adviser

Daniel Wadleigh
Marketing Consultant

The rewards of lean thinking

Dale S. Laszig
Castles Technology Co. Ltd.

It's time to change the conversation

Adam Moss
Charge Card Systems Inc.

Company Profile


New Products

Big data for SMB market


Cloud-based business manager

Starter program


How are other people influencing you?


Readers Speak

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

March 25, 2013  •  Issue 13:03:02

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New battles erupt in mobile wallet wars

On March 6, 2013, mobile phone carrier billing company PayOne Corp. filed a patent infringement lawsuit against The Home Depot Inc. The complaint alleges Home Depot's deployment of PayPal Inc.'s in-store checkout solution infringes on a number of PayOne patents. On another front, documents from the financial institution regulatory arm within the State of Illinois Department of Financial & Professional Regulation confirm that it issued mobile payment startup Square Inc. a cease and desist order in January 2013.

PayOne seeks injunction

PayOne, formerly PaymentOne Corp., is asking the federal court in the Northern District of California to award it unspecified damages and an injunction against Home Depot for future patent infringement violations. PayOne said the PayPal in-store checkout process available to consumers at Home Depot stores in the United States violates PayOne patents covering the use of mobile phone numbers and PINs to make payments at the POS.

The lawsuit goes back to May 2011, when PayOne filed suit in Northern California against mobile payments firm Zong Inc., seeking damages and injunctive relief for alleged patent violations. In July 2011, PayPal's parent company, eBay Inc., purchased Zong. In March 2012, PayPal expanded the Home Depot pilot of its in-store, cardless payment service. In May 2012, PayPal was substituted for Zong as the defendant in the patent case.

The complaint alleges Home Depot knew since November 2012 about PayOne's claim that PayPal's so-called "Empty Hands" payment scheme violated its patents, when PaymentOne wrote to Home Depot about its concerns. PayOne said Home Depot knowingly violated its patents "by providing to customers the PayPal in-store checkout system as an option of payment, promoting the PayPal system to customers through in-store and Internet advertising, and aiding, assisting and encouraging customers to complete a transaction using the PayPal in-store checkout system."

The new theatre of battle

Joe Lynam, President and Chief Executive Officer at PayOne, stated in a press release, "PayOne has invested significant time and money developing its proprietary mobile payment technologies designed to simplify the checkout process and the PayOne systems have been deployed by digital merchants across the globe. The 'mobile wallet wars' have moved beyond the digital world into the point of sale, but now face adoption challenges and substantial friction with consumer setup requirements, security concerns and lack of merchant required NFC [near field communication] infrastructure."

Lynam said PayOne's patents solve these problems by allowing instant wallet capability "that can be extended to the retail and physical world" for consumers with no pre-registration or friction at the POS and no NFC infrastructure required.

Square called unlicensed

Meanwhile, Illinois issued Square the cease and desist order after the IDFPR's finding that Square is in violation of the state's Transmitters of Money Act. The act requires any business "selling or issuing payment instruments, transmitting money, or exchanging, for compensation, payment instruments" to be licensed by the IDFPR.

The department ordered Square to stop doing business in the state and produce documents on all Illinois customer account activity, money transmissions and "independent reviews of Square's Anti-Money Laundering program."

The order called for Square to file those documents with the IDFPR by Feb. 19, 2013. IDFPR spokeswoman Susan Hofer told The Green Sheet that she could not say if Square had met the deadline. A Square representative stated, "We've been in close contact with the Illinois Division of Financial Institutions for several months and are addressing their concerns."

For additional news stories, please visit and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

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Spotlight Innovators:

North American Bancard | Simpay | USAePay | Impact Paysystems | Board Studios