After years in the making, Payment Pathways’ Greenlist prepares for production

Filed under News, Product development

By Ann Meyer

As merchants rely on transactions from mobile apps, entrepreneur Richard O’Brien expects demand to grow for Payment Pathways’ Greenlist registry of secure electronic payment addresses.

O’Brien received his second patent for the secure transfer system this week and has a third patent pending. “I have a sense the pace of this is starting to heat up,” said O’Brien, president and chief executive of Chicago-based Payment Pathways Inc.  

After testing the system with pilot customers, Payment Pathways is moving into production, O’Brien said. The company, which O’Brien launched in 2003, has no paying customers at this time. “We have banks circling the wagon threatening to become customers,” but they haven’t signed on yet, he said. “These systemic changes don’t happen easily. We’re looking at pretty engrained habits.”

Like O’Brien, Chicago inventor LeNardo Nelson can relate to the challenges of bringing a breakthrough product to market. Nelson, who invented a triple-edge windshield wiper designed to last longer than conventional wipers more than a decade ago, recently won top honors for his TriTrak wiper at a local new-product contest. “We’re trying to capitalize on it,” Nelson said.

While Nelson’s efforts to get the product to market have stalled several times, he hopes publicity from the award will push his business forward. He plans to drive demand for the product through infomercials and media exposure. Currently, the wiper is in prototype. See related SmallBizChicago.com story here.

While Nelson has a day job to sustain him, O’Brien said consulting fees plus capital from three strategic investors have provided funds for Payment Pathways. “I have gambled eight years of my life,” he said, though he remains confident his efforts will pay off.

O’Brien likens the Greenlist to the Fedwire real-time funds transfer system that corporations use to make large electronic payments. Small businesses generally can’t justify Fedwire’s  $50 transaction fees for small transfers, he said. Payment Pathways plans to charge banks five cents per transfer to insure their payment makes it to the address of the intended party.

O’Brien’s first Greenlist patent, which was co-authored by Franco Modigliani, a professor at Massachusetts Institute of Technology and a Nobel Prize winner, protects a secure system for communicating e-payment addresses without encryption.

The so-called Greenlist registry does not divulge actual bank account numbers, but provides secure payment addresses that mask the consumers’ bank account numbers, O’Brien said. The Greenlist payment addresses can only receive deposits or requests for debit that require authorization. “They look like a bank account number, but they’re not the ones on your checking account. The bank issues a separate account number” that’s filtered for security reasons, O’Brien said.  

The second patent, which O’Brien filed in 2006 and received this week, extends the secure delivery system to information transfers, such as digital works of art, movies or music, O’Brien said.

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