Why is it Important to Get a Patent in FinTech
As an emerging industry that uses technology to improve financial activities, FinTech patents are uniquely powerful as compared to trademark and copyright.
Patent protection is perhaps one of the most crucial elements that FinTech companies need to work on. Especially in the case of FinTech start-ups, who spend a lot of time, effort as well as development costs in creating novel solutions. When new ideas are not filed or defended accurately, it gives competitors a second-mover advantage. Which is why the FinTech industry is currently witnessing a surge in patent filings. [Explore our Service: India IP Filing]
FinTech Financing Trend – India
FinTech market in India alone is set to scale up to $31 billion by 2020. WhatsApp, the most popular and widely used messaging app with over 200 million active users in India, rolled out a Unified Payment Interface (UPI) feature that was developed by National Payments Corporation of India (NPCI). This instant mobile-to-mobile digital money transfer system between participating banks allows users a fuss-free platform for merchant payments. UPI payments is quickly getting adopted by other global giants too such as Google, which launched their payments app called Google Tez, which has now been rebranded as Google Pay. Samsung and Amazon followed suit by launching Samsung Pay and Amazon Pay respectively.
Apart from global giants, Indian digital payment companies such as PayTM, MobiKwik, PhonePe and FreeCharge, are all UPI-enabled and strengthening their FinTech game. Mobile payments to date have witnessed several investments.
Let’s have a look at the FinTech patent trend across India:
The above graph shows the Indian patent activity for the past two decades. The graph below shows Indian companies who hold the maximum number of patent families in FinTech:
Let’s also have a look at the major Fintech players in US:
Advantages of Patents in FinTech
- Gain market share
- Investor friendly – Patent applications are deemed valuable as they can attract investment from potential investors as well as the market.
- Unlike copyright, patents can protect the functionality of the invention. Once a FinTech patent is granted, it prevents third parties from exploiting the method, process and/or apparatus protected by the patent. This allows patent holders to exercise monopoly on their invention in terms of commercialisation or licensing. Hence, a valuable revenue stream is created that boosts the company’s profile substantially.
How to protect FinTech Ideas
Given the value of FinTech patents, the protection of your FinTech inventions should be a part of your overall IP strategy. It is important to consider patenting your invention at the concept stage, even before you plan to bring your innovation into the market as at times publication can affect the patentability of your idea.
Changes in FinTech law are quite dynamic. In order to file an effective patent, it’s best to start-off by first evaluating the basic steps on how to get a patent.
The basic rule that applies to getting a FinTech patent is to first ensure that the technical idea you have brings about an applicable change in the practical functioning of a financial problem.
FinTech patent proposals must meet industry standards such as – improved network security for a financial transaction, innovative interface, enhanced computer resource use, increased reliability in network traffic speed, etc.
To conclude, it is worth noting that patents are not appropriate for all ideas. It is important to evaluate and review your innovation for patentability through an expert.