NEW DELHI: In what is perhaps the first sign of new age Indian companies waking up to the potential of patents , Snapdeal-owned digital payments firm FreeCharge has indigenously developed an alternative to the SMS based one-time-password and has already filed a patent for the technology.The authentication solution termed as ‘ On The Go Pin ’ is aimed at making both online as well as offline transactions faster by cutting the delay caused in receiving the OTP through text message.This could become a trendsetter of sorts in the industry — dominated by the likes of Flipkart Snapdeal and Paytm — which are heavily investing in R&D to develop various breakthrough technologies in the online space. However, filing of patents is still rare.Rahul Dev, patent and trademark attorney at Tech Corp Legal, said that the trend of filing patents among startups is catching up but patents are being filed not solely for the purpose of protecting against theft of innovation or technology.“The portfolio of patents — even if their registration is pending — becomes a highly valuable intangible asset for the company during fund raising.” In such a scenario, patents serve as a business tool rather than a legal tool especially for firms that are global in nature as patents command a high premium in the US and UK, Dev said.The technology developed by FreeCharge replaces the OTP received through the mobile airways with a pin that resides within the phone and keeps changing every few seconds.In the backend, the servers of the bank and the merchants verify the pin in order to process the transaction. Govind Rajan, the chief operating officer of FreeCharge, said it eliminates wait time for both the retailers as well as customers since often there is a considerable delay in receiving OTP due to network connectivity issues.“This system fulfils the Reserve Bank of India’s (RBI) mandate for two factor authentication and does not require even a single paisa of additional investment by retailers or customers,” said Rajan, who is also the chief strategy office of Snapdeal.FreeCharge has already stuck a deal with Shopper’s Stop which will start transactions using the new technology.“Both the RBI and the government are focused on reducing cash in the system and our approach is to consistently look at solutions which makes customers choose digital payments over cash due to the sheer of factor of convenience.”While Freecharge’s parent Snapdeal has filed a single patent so far for a platform that connects offline to online, Paytm has none so far. Flipkart did not respond immediately to ET’s queries about whether it has filed for any patents.Sharad Sharma, who is a former CEO of Yahoo’s India R&D arm and also former chairman of Nasscom’s product council said that considering that 97% of patents which are filed in India currently are done by multinationals, these efforts by new age companies is a welcome sign.However, a lot more needs to be done. “In the US, for every $4 million of R&D spend, one patent is granted which effectively means that hiring of every 20 people lead to generation of one patent.It will be meaningful only when we have similar numbers,” said Sharma who is also the co-founder of iSPIRIT, a think tank and policy advocacy group for startups.