We will have a full article on this subject shortly, but here's an announcement which caused a bit of a stir at the BAI Payments Connect Conference on March 3rd...
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Global Standard Financial, Inc. (GSF) announced today the awarding of two patents by the US Patent and Trademark Office which cover the fundamental processes necessary to securely create paperless Check 21-based checks or Electronic Payment Orders (EPO).  The term EPO was described in a November 2009 Chicago Federal Reserve Policy Paper which outlined the benefits of paperless checks and was used to distinguish pure digital checks from paper-based Check 21 image processing.

Through its patented technology, GSF will offer a unique electronic payment platform which removes the "first and last mile" of paper from the $41 trillion check payment system while leveraging the existing Check 21 image-based clearing and settlement process widely in use today by the banking industry.  GSF describes these pure electronic payments as Digitally Originated Checks™ or "DOCs" and is developing unique value-added EPO products and services which will deliver incomparable benefits into the hands of consumers and businesses later this year.

"Utilizing our unique and patented paperless check process, GSF will offer secure Electronic Payment Order (EPO) based products to the market under a variety of business models and service offerings.  We welcome banks, payment processors, third party software companies and other parties to contact us to discuss product or patent licensing options," said Clark Gilder, CEO of GSF.  Mr. Gilder announced being awarded the first two patents, part of a series of patent filings made by GSF, that were issued as US Patents 7539646 and 7620603 covering the methods and processes to create paperless Check 21 items.  According to the latest Electronic Check Clearing House (ECCHO) statistics, over 14 billion check images are processed in the US daily with over 97 percent of all banks able to receive check images for clearing and settlement every night.

"For the first time ever, GSF's secure software products will allow anyone to create and process these items without the need for a paper check to pay someone including peer-to-peer payments, invoices, gifts and payments to government institutions," said Dr. Allen Lipis, a pioneer and leading check processing expert as well as founder and former CEO of Global Concepts.  During his distinguished career, Dr. Lipis, who is an advisor to GSF, has served as an expert witness in high profile court cases including patents involving check processing where he uses his more than 30 years of experience in identifying and measuring best practices in banking and more specifically check handling and processing.
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What are your thoughts? Is this going to be a DataTreasury-like scenario all over again? Since we're very early in the process of the EPO concept, can the industry and the patent holders handle things differently this time around?