Mobile money vendor PayOne has filed a patent infringement lawsuit against Home Depot over the retail giant's use of PayPal's in-store checkout technology.
Early last year, Home Depot became the first big US retailer to back PayPal's new in-store payment system, embarking on a nationwide roll-out of the technology after a successful pilot.
Shoppers at more than 2000 stores can either swipe a PayPal-issued card to pay for purchases, or enter a mobile phone number and PIN into the point-of-sale terminal.
It is the latter option which has prompted PayOne to file a suit against Home Depot in the Northern District of California, arguing that the deployment infringes on multiple patents.
The patents include "the use of a mobile phone number and a PIN (personal identification number) to complete the checkout process and payment at point of sale," says a statement.
The complaint seeks unspecified damages and a court-ordered injunction against future infringement by Home Depot.
Although Home Depot was first on board with the disputed PayPal technology, a total of 23 large retailers - including Barnes & Noble, Foot Locker and Toys "R" Us - were using it by this January.
PayPal sees the phone number and PIN option as a better mobile bet than NFC, which the company has long dismissed despite the efforts of the likes of Visa, MasterCard, Isis and Google.
Joe Lynam, CEO, PayOne, agrees: "The 'mobile wallet wars' have moved beyond the digital world into point of sale, but now face adoption challenges and substantial friction with consumer setup requirements, security concerns and lack of merchant required NFC infrastructure."