Apple and Visa Sued Over Digital Payment and User Authentication Technology Used in Apple Pay

Apple and Visa have been sued by a small company based in Boston this weekend, which claims that Apple Pay violates 13 patents that it holds related to digital payment systems and user authentication technology. The company behind the lawsuit, Universal Secure Registry, filed the complaint in a Federal District Court in Delaware on Sunday (via The New York Times).

According to the filing, USR chief executive Kenneth Weiss "was the first in the space, and the secure payment technology that he developed goes right to the core of Apple Pay." Specifically, Weiss' company is claiming that the 13 patents include details on authentication systems embedded in smartphones, biometric ID confirmation through fingerprint scanning, and the generation of secure, one-time-use tokens in financial transactions.


According to Weiss, he had "extensive meetings" with Visa in 2010 that centered around working together to introduce a mobile payments system into smartphones, which allegedly lead to Visa signing a 10-year nondisclosure agreement with Weiss and his company to be able to use the technology. Weiss said that Visa eventually "dropped further communication without securing a license," and that any inquiries he wrote to Apple in asking the Cupertino company to license his technology were never answered.

Then, Visa began working with Apple on a partnership that eventually lead to the debut of Apple Pay in 2014, which the lawsuit claims to have been built with the "willful infringement" of USR's patents. Weiss is now seeking damages in relation to Apple Pay and Visa's alleged patent infringement, represented by Quinn Emanuel Urquhart & Sullivan, which advised Weiss to file a suit before seeking a license agreement or royalties from Apple or Visa.
This suit seeks unspecified damages, but details the scope of the infringement, claiming, "since 2014 Apple's backend servers and Visa's payment processing network VisaNet, including Visa Token Service, have supported and processed transactions made using Apple Pay, including billions of Apple Pay transactions made in the United States."

"It is not uncommon for large companies to be unresponsive to outside suggestions for innovation or improvements to their product or technology," said Weiss. "Occasionally, these companies infringe patents and force a patent owner to file a lawsuit as the only way to financially benefit from the technology he invented."
Weiss founded Security Dynamics and invented the RSA SecurID token system, which is used to secure and authenticate important data sent by major companies, banks, and multiple branches of the United States government. USR is said to hold a portfolio of Weiss' patents related to the new lawsuit, and also including a few pending applications and foreign patents he has filed dating back to 2000.

Related Roundup: Apple Pay
Tags: lawsuit, Visa

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Visa and Payments Startup ‘Current’ Launch Debit Card for Kids That Ties to Parental Control App

Visa has partnered with payments startup Current and today the companies are launching a new "smart debit card" and iOS app that aim to give kids and parents more autonomy and security when it comes to doling out spending money (via TechCrunch). The new Current card functions like any other Visa debit card, allowing teens and younger kids to spend money without needing cash, but comes connected with a parentally-controlled iOS or Android smartphone app.

The Current iOS app [Direct Link] has two sides, for both parents and their kids. Parents can set up specific chores within the app, include a description, and set an amount of money that will be funneled into the kid's Current card, through the parent's connected bank account, upon completion. Automated allowances can also be set to recur on a weekly or monthly basis, and parents can block spending from specific businesses like casinos and bars, as well as set spending limits.


The company said that its biggest inspiration was helping to streamline the weekly allowance hassle that parents have to deal with when their kids require money, which has traditionally been given in cash.
With Current, you'll get your own debit card and an app with three smart wallets for spending, saving, and giving. Asking parents for money can be awkward, they don't always have cash on them and you have to go through this every week. Current automates your allowance so it arrives in your spending account when you need it.

If you get stuck somewhere and you're out of money, you can get more from your parents instantly through Current. It's as simple as texting and the money will show up right away.
On the kid side of things, once they are issued the Current card, they'll have access to three separate wallets for spending, saving, and giving. The spending wallet is directly linked to their Current card for day-to-day expenses, the savings wallet allows them to place part of their allowance into a safe place for later spending, and the giving wallet encourages donation to thousands of charities. The company said that all of the app's features will help to inspire "real world, financial education for kids."


Current also works with Apple iMessages, Facebook Messenger, Kik, and a few other text services, so parents can send money to their kid's Current card through a text message. The company said that any bank in the United States can be added into the app, and an international expansion is "in the works."

Multiple subscription plans are available for parents interested: $5/month for a month-to-month subscription with an additional $5 charge for the debit card; $3/month for a 1-year subscription and a free debit card; and a $2/month for a 2-year subscription and a free debit card. The latter two subscriptions are billed upfront at the start of each billing period, meaning $36 and $48 are charged every year and every two years, respectively. Bank transfers, payments, and in-network ATM usage have no additional fees, but replacement cards cost $5.


More information about Current, including security and privacy features, can be found on the company's website. Once parents sign up and make a Student Account for their kids, which requires a social security number, Current will issue the Visa debit card to the designated address.

Those without kids can also sign up for Current's free-to-use individual wallets, which function like traditional mobile payment apps and allow for peer-to-peer payments among friends and family.

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Study: Hackers can get your credit card info in 6 seconds just by guessing it

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In troubling news, a paper from researchers at Newcastle University in the UK claims that Visa’s credit-card payment system can be compromised online in “as little as six seconds.” The security flaw was possibly the point of entry for the cyber-attack on the UK’s Tesco Bank that lost £2.5 million.

This isn’t some high-level hacking going on here either — all it takes for a determined thief to grab a treasure trove full of card data is a laptop with an internet connection and some basic guesswork, the paper says. 

The team of researchers, led by PhD student Mohammed Ali, call the method “the Distributed Guessing Attack.” It’s a simple approach: a thief generates random numbers to guess combinations of card numbers, expiration dates and CVV codes (that three-digit number typically found on the back of the card). The video below demonstrates just how easy it is to generate all of these fields quickly: Read more…

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