How Visa Processes Targeted Discounts on Specific Items During Checkout
A system for payment networks to automatically apply discounts to specific categories of items within a single transaction while correctly calculating taxes.
Original patent title: “Systems and methods using a data structure summarizing item information in authorization request messages for communication in transactions involving multiple items”
A system for payment networks to automatically apply discounts to specific categories of items within a single transaction while correctly calculating taxes. Granted to Visa International Service Association in 2018 with 6 claims and 1 forward citation.
Key facts
Coverage
What does this patent actually cover?
This patent describes a way for a payment processor to handle complex transactions where a customer buys items from different tax or discount categories at once. The system receives a message from a merchant that breaks down the total purchase into sub-amounts based on item categories and their specific tax rates. The processor then checks its internal database to see if any of those categories qualify for a discount. If they do, it calculates a new, reduced total transaction amount—while keeping the tax math accurate—and sends this updated amount to the bank for final approval.
The gap
What does this patent NOT cover?
- Does not cover simple discounts applied to the entire transaction total regardless of item category.
- Does not cover manual discount processing that happens at the point-of-sale terminal before the authorization request is sent.
- Does not cover systems that do not aggregate items by category code or tax rate in the authorization message.
These exclusions are unique to PatentBrief — derived from the actual claim language, not patent-office boilerplate.
What made this novel
The innovation is moving the discount calculation from the merchant's register to the payment network's transaction handler, using a specific data structure that maps category codes to sub-amounts and tax rates.
Schematic visualization of the patent's claim structure. Hand-drawn diagrams in progress for each landmark patent.
Where you've seen this
Real-world examples
Digital coupon programs linked to credit card accounts
Automated loyalty rewards applied at the payment network level
Retailers using category-specific tax and discount logic
Why it matters
The bigger picture
In modern retail, merchants often offer targeted discounts (like 10% off groceries but not electronics). This patent provides a technical framework for payment networks to apply these discounts mid-transaction without breaking the tax calculation or the bank's authorization process. It ensures that the final amount the bank approves is accurate, preventing payment failures or incorrect tax reporting.
Filed
April 7, 2015
Granted
December 25, 2018
Market context
Who's building on this
Companies in this space
Visa remains the primary entity building on this, as it is designed to function within their specific electronic payment processing network. Other major card networks like Mastercard and large payment processors like Stripe or Adyen utilize similar logic for handling complex, multi-item transaction data.
Market impact
This technology enables more granular loyalty programs where discounts are tied to specific items rather than the whole basket. It reduces friction for merchants wanting to offer complex promotions without needing to update every individual point-of-sale system to handle every possible bank-issued discount.
Claim 1 — Plain English
What this patent covers
This patent describes a way for a payment processor to handle complex transactions where a customer buys items from different tax or discount categories at once. The system receives a message from a merchant that breaks down the total purchase into sub-amounts based on item categories and their specific tax rates. The processor then checks its internal database to see if any of those categories qualify for a discount. If they do, it calculates a new, reduced total transaction amount—while keeping the tax math accurate—and sends this updated amount to the bank for final approval.
The clever bit
The innovation is moving the discount calculation from the merchant's register to the payment network's transaction handler, using a specific data structure that maps category codes to sub-amounts and tax rates.
What it does not cover
- Does not cover simple discounts applied to the entire transaction total regardless of item category.
- Does not cover manual discount processing that happens at the point-of-sale terminal before the authorization request is sent.
- Does not cover systems that do not aggregate items by category code or tax rate in the authorization message.
Patent timeline
Application submitted to the patent office
Application published, typically 18 months after filing
Patent officially issued
PatentBrief Score
Impact Score
Early stage
Citation count
6/40
Early citations
Claim breadth
4/20
Moderate scope
Recency
10/20
Granted 5–10 years ago
Assignee scale
0/20
Independent or smaller assigneeassigneeThe entity that owns the patent — usually the inventor's employer or a company.Read more →
PatentBrief Impact Score — based on citation count, claim breadth, recency, and assignee scale. Not a legal assessment.
Heuristic Value Estimate
What this patent might be worth
$60K – $192K
Midpoint $120K · 8.8 yr remaining · industry ×1.6
Heuristic only — blends forward/backward citation counts, claim scope, time remaining, litigation history, and CPC-derived industry baseline. Real valuations need a professional appraisal.
The original legal language
Original claims
6 claims as filed with the patent office.
Concepts involved
Citations
Patent lineage
Cite this patent
Jogi, K., Bankston, M. S., Sarkar, T. M., Celikyilmaz, I., Chingakham, T., Seshappan, S., Dewan, D., & Chinnappan, R. (2018). How Visa Processes Targeted Discounts on Specific Items During Checkout (U.S. Patent No. 10,163,106). U.S. Patent and Trademark Office. https://patentbrief.org/patent/us/10163106/stripe-radar
Auto-generated from the patent record. Double-check author order and the issue date against the official USPTO document before submitting.
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Common Questions
Frequently Asked Questions
What does How Visa Processes Targeted Discounts on Specific Items During Checkout cover?
A system for payment networks to automatically apply discounts to specific categories of items within a single transaction while correctly calculating taxes.
Who owns patent US 10163106?
Visa International Service Association owns this patent, granted in 2018.
When does this patent expire?
This patent is expected to expire on December 25, 2038, when the invention enters the public domain.
What is patent US 10163106 cited by?
This patent has been cited by 1 later patents that build on its ideas.
What problem does this patent solve?
In modern retail, merchants often offer targeted discounts (like 10% off groceries but not electronics). This patent provides a technical framework for payment networks to apply these discounts mid-transaction without breaking the tax calculation or the bank's authorization process. It ensures that the final amount the bank approves is accurate, preventing payment failures or incorrect tax reporting.
What does this patent NOT cover?
Does not cover simple discounts applied to the entire transaction total regardless of item category.
Patent monitoring