Apple, Visa Sued Over Patents Allegedly Violated By Apple Pay, Report Says

A Boston company is suing Apple and Visa, alleging Apple Pay violated its patents, the New York Times reported.

Universal Secure Registry alleges the company and founder Kenneth Weiss "was the first in the space, and the secure payment technology that [Weiss] developed goes right to the core of Apple Pay."

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Universal Secure Registry claims Weiss met with Visa in 2010 to propose working together on a mobile payment system. Universal Secure Registry owns several patents related to mobile payments, including authentication systems and the use of biometric tools for fingerprint identification. As the New York Times noted, Weiss said Visa had assigned engineers to explore the technology but did not come to a formal agreement with Universal Secure Registry. Weiss had also reached out to Apple, but never met with the company.

However, Apple and Visa eventually partnered up with MasterCard and American Express to launch Apple Pay. The mobile payment option, which launched in 2014, can tie a credit or debit card to your iPhone and it can be used to make payments at stores or other locations. To do so, you simply have to tap your iPhone onto a checkout console at a store and the smartphone will remotely make the payment from your personal account.

Universal Secure Registry is represented in the suit by law firm Quinn Emanuel Urquhart & Sullivan. Previously, Quinn Emanuel represented Samsung in its own long-running lawsuit against Apple over its patent dispute over features used on its Google Android-based smartphones.

In a statement, Weiss said outside litigation was Universal Secure Registry’s remaining and best option to protect its patents from outside abuse.

"It is not uncommon for large companies to be unresponsive to outside suggestions for innovation or improvements to their product or technology," Weiss said. "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."

Apple Pay has been a major part of Apple’s iPhone releases since it was first introduced on the iPhone 6, but the feature has struggled to maintain major market penetration.

While the service did around $36 billion in transactions during 2016, only around 13 percent of iPhone users are estimated to use the service regularly. For many retailers and buyers, the upsides of Apple Pay have not necessarily been enough to justify either replacing checkout hardware or replacing a standard credit or debit card. Apple has also seen competition in the space from Samsung Pay, which is tied to Sansung's own Galaxy series of smartphones.

Read: Apple Looking Into Launching Venmo-Like Money Transfer Service

Earlier this year, Apple reportedly was looking to supplement Apple Pay with a Venmo-like side feature that would allow iPhone users to transfer cash directly to and from one another. This new service reportedly would come alongside a debit card-like feature for iPhone users.