Apple applies for digital wallet patent to subsidize users with virtual currency

An interesting Apple patent disclosed Thursday explains a hybrid digital wallet and billing service. The service issues points and tokens to users. The points and tokens can then be exchanged for real items or services like mobile phone bills. The title of Apple's invention published by the US Patent and Trademark Office is "Method and system for managing points via a mobile device." However, the invention is really a wide range of virtual currency solutions involving mobile phone bill payments, physical goods purchases, P2P transfers, and more.

As seen in the patent's abstract, a so-called "digital wallet" is central to the system's functionality. Points transferred and stored on a mobile device have monetary value. These points are tied to an account or billing system. The billing system tracks the use of virtual currency.

The patent discusses a bill payment system in which points can be added to an account based on a prepaid or postpaid plan. For prepaid users, all points are removed based on usage. For postpaid users, points are calculated after a period of time.

The patents' explanation states: "This patent contemplates other techniques for providing subsidized or free telephone service to users. For subsidized telephone service, users will be responsible for a portion of the service they use. Therefore, users will have an interest in canceling unnecessary use of such telephone service."

Because the billing system is linked to the communication network used by the mobile devices carrying the credits, the billing system can monitor usage patterns in real time. Therefore, as a branch of this system, advertisements can be delivered to a large number of mobile devices through messaging services or other wireless data services.

Service providers such as advertisers issue "tokens" to users, which can then be used to offset a portion of the wireless service bill. Issuers can also send vouchers, shopping vouchers and the like through a generated code. These will be sent through the digital wallet service server or billing system.

This solution is good news for operators in developing countries, where users are eager to get a smartphone like Apple's iPhone . However, users may not be able to afford such a smartphone or the necessary data service. Apple has taken aggressive pricing measures in developing countries. Apple has recently achieved success in India, where sales increased by 400% in 4 months .