Intellectual Property Analysis of Visa, Inc.

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This week’s Patently Obvious report focuses on the patent holdings of Visa, Inc. With the Wall Street Reform and Consumer Protection Act recently signed into law on July 21, 2010, major credit card companies have found themselves the recipients of new financial regulatory restrictions due to the Durbin amendment.

This amendment allows the Federal Reserve to issue rules to control the interchange fees credit card companies charge merchants for each transaction. Promulgated from the idea that the margin between the revenues generated by the fees unfairly exceeds the cost incurred to process these transactions, the arguments behind the Durbin amendment suggests the regulation created savings will give merchants opportunities to expand employment as well as pass savings to consumers.

Conversely, the legislation possibly presents both revenue as well as brand value challenges to companies like Visa at a time when the public image towards banking institutions, including credit card companies, are low. Couple this with the growth of alternate payment networks like PayPal, GoogleCheckout, Apple and a likely entry by Facebook and we can be sure that credit and debit card marketplace will be a far more challenging environment, particularly for Visa as the largest card processor with 62 billion Transactions processed in 2009.

This report focuses on entities of interest with patents and innovations that predate or coexist with the holdings of Visa, as well as public-domain alternatives.