Google Inc. has applied for a patent covering a person-to-person mobile payment system that uses text messages, which could move it further into the banking market.
Industry watchers said that the Internet powerhouse certainly would bring new attention to the fledgling market for mobile payments, but they questioned whether any company could claim broad proprietary rights to the process.
Google, the operator of the popular Internet search engine, published its Patent and Trademark Office application last week for a “Text message payment” system, which it called “Gpay.”
According to the application, people could use a mobile device to initiate a payment to other Gpay users with funds from, for example, bank accounts, credit cards, or prepaid accounts.
The Mountain View, Calif., company listed several examples of situations in which people might use the system, typically as a replacement for cash. These examples included purchasing vegetables at a farmers’ market, paying for gardening services, or buying snacks from a vending machine.
Google already offers the Checkout service, which lets merchants accept card payments for online purchases.
And even though a person-to-person service might seem like a logical next step, a Google spokesman said Wednesday that it may not ever turn the idea into a reality.
“We file patent applications on a variety of ideas that our employees come up with,” the spokesman said. “Some of those ideas later mature into real products or services. Some don’t. Prospective product announcements should not necessarily be inferred from our patent applications.”
The application was filed in February of last year and named Ramy Dodin, a Google software engineer, as Gpay’s inventor.
James R. Burdett, a partner in the intellectual property practice of the Washington law firm Venable LLP, said Google’s decision to publish the application could indicate the company intends to apply for similar patents internationally, because other countries require such applications to be published domestically before they can be filed elsewhere.
But he questioned whether Google or any other company would be able to claim patent rights for such a payment mechanism.
“Patenting the general concept of sending a text message to make a payment is going to be difficult for a number of reasons,” Mr. Burdett said. One involves the question of “obviousness,” since a Supreme Court decision in April raised the standard for evaluating such questions.
Several other companies, including eBay Inc.’s PayPal Inc. unit, Obopay Inc., and ClairMail Inc., already offer text-message payment systems.
Mr. Burdett said that PayPal has received three “nonfinal rejections” of its patent application for its PayPal Mobile system, most recently in June. Because the application dates from October 2005, “they enjoy some claim to priority that Google doesn’t have.”
PayPal’s system enables people to make purchases by sending text messages using code numbers printed in advertisements or catalogs; the payments company debits their PayPal account and the merchant ships the products to the address on file with PayPal. Spokespeople for PayPal did not return phone calls Wednesday.
Philip J. Philliou, a partner in the New York financial services consulting firm Philliou Selwanes Partners LLC, said that Gpay would fit in with Google’s numerous other mobile products and services, including e-mail, yellow-pages searches, and maps.
“There is some great work Google has done in the mobile space,” said Mr. Philliou, a former MasterCard Inc. executive. “This is a natural extension of that.”
He compared Gpay to the suite of mobile banking and payment applications developed by ClairMail that use text messaging, mobile browsers, and downloadable applications,
Joseph Salesky, ClairMail’s president and chief executive, said that his Novato, Calif., company applied for its first patent in 2004, and that Google’s interest in the idea is “a great confirmation of the value that we bring to the banks.”
Many of the person-to-person payment options available now — such as PayPal’s for Internet transactions and Obopay’s for mobile ones — involve a closed system, in which both the payor and the payee must have accounts with the provider.
However, Mr. Salesky said he sees more potential in using the two-way capabilities of mobile devices to pay bills on the go, perhaps after receiving a message that a payment is due.
“There’s a huge opportunity for the banks,” he said. “I think this is going to engage the wholesale side of the bank, as well.”
Irv Henderson, the vice president of product development at Obopay, said that Citigroup Inc. started testing the Redwood City, Calif., company’s software last month. Obopay enables its users to initiate payments to each other with text messages.
Obopay said in June that Verizon Wireless had agreed to let customers download the vendor’s payment software to their phones.
“We’re very happy that Google has entered the marketplace, the mobile payment space in particular,” Mr. Henderson said. “This is raising the profile of mobile payments. There is a lot of buzz, because it’s Google.”
As for the impact on Obopay, he said, “We are looking very closely at the patents they are claiming.” However, “this doesn’t affect anything that we are doing.”
