JP Morgan chase has filed a US patent for computerized Peer-to-Peer (P2P) payment system with the US Patent & Trademark Office (USPTO). The system would use Distributed Ledger technology similar to blockchain thereby allowing people to make anonymous & electronic payments over the internet. The system buries the names and the details of the account holders making the transactions. The new system addresses the pitfalls in the existing banking system like cross-border payment processing, transaction times, high transaction fees, etc.
As per media houses, JP Morgan’s patent application mentions using a distributed ledger to process payments in real-time, without having to rely on a trusted third party to hold the true "golden copy” of the audit trail. The patent proposes different embodiments of such a system, which would all include a payment originator bank, a payment beneficiary bank, a peer-to-peer payment network in which both banks would participate, and a distributed ledger.
The proposed system involves creating “virtual cash” which would be inside the online wallet. The system would also create a public record of transactions. This feature is similar to Bitcoin’s use of “blockchain”, a massive block of code stored across peer-to-peer network of computers that act as a public ledger for all the transactions.