A small Boston company, founded by the inventor of a popular corporate encryption technology called RSA SecurID, sued Apple and Visa on Sunday, arguing that the Apple Pay digital payment technology violates its patents.
The lawsuit, filed by Universal Secure Registry in Federal District Court in Delaware, says that its chief executive, Kenneth P. Weiss, received 13 patents for authentication systems that use a smartphone, biometric identification such as a fingerprint and the generation of secure one-time tokens to conduct financial transactions.
In the suit and in an interview, Mr. Weiss said he had extensive meetings in 2010 with Visa officials, including its chief executive at the time, to discuss working together on the technology. In the interview, he said that Visa had signed a 10-year nondisclosure agreement to gain access to the technology, assigned engineers to fully understand the details, but then dropped further communication without securing a license.
Mr. Weiss said he also wrote to Apple at the same time seeking to license his technology, but the iPhone maker never responded to his inquiries.
Three years later, Visa began work on the Apple Pay technology with Apple, MasterCard and American Express. Apple released Apple Pay to iPhone users in 2014.
Although Apple has heavily promoted Apple Pay as an alternative to paying with a credit card at retail stores, in apps and on websites, it has not gained much traction with consumers or merchants. Users enroll a credit card on their phone, then touch a finger to the iPhone’s Touch ID sensor to pay a merchant that has installed a wireless terminal that can receive a signal from the phone.