NetSpend 2015 Annual Report Download - page 9

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5
* SMB addressable market by net revenue estimated to be $10 billion. Notes: Market growth forecast based on 2014-2019 CAGRs
Source: First Annapolis Consulting, Economist Intelligence Unit
Businesses
Our merchant segment showed very strong
performance in 2015. We delivered EMV®
implementations and new product offerings
like American Express OptBlue®, which allows
smaller-volume merchants to accept American
Express® payments through a simpler
acceptance process.
Our merchant segment also launched support for
Android Pay and Samsung Pay, enabling merchants
to accept the many forms of mobile payments
consumers expect. We also increased our focus
on small-to-medium-size businesses (SMBs): a $10
billion addressable market opportunity of six to eight
million businesses*.
Today businesses look for fully integrated software
solutions that better manage all their operations and
have payment acceptance and processing embedded
within management software specifically designed for
their business’ needs. In 2015, our merchant segment
continued this momentum. We grew our integrated
software vendor channel, and added new partners
to the mix. Combining TransFirst with our own
merchant segment accentuates TransFirst’s go-to-
market strategy and focus on referral partners like
technology software providers, banks, associations
and e-commerce providers.
The acquisition of TransFirst will also strengthen our
sales and distribution network. It adds more than
1,300 partners and more than 350 sales professionals,
enhancing our access to fast-growing vertical
markets like healthcare, B2B and not-for-profits.
TransFirst complements TSYS’ existing merchant
business in three key ways. First, TransFirst operates
a partner-centric distribution model, which will
give us scalable, cost-efficient access to a large
number of SMBs. Second, TransFirst operates a single,
integrated platform that evolved from TSYS’ own
payment solutions. This means we can leverage our
joint capabilities to offer products in a seamless way
through one provider for all processing requirements.
And third, TransFirst offers customized, user-friendly
solutions that enable merchants to sell all their
products on a single platform
—
whether from
a store, over the Web or remotely through a
mobile device.
Once the TransFirst acquisition is complete, we’ll be
servicing more than 645,000 merchant locations,
processing $117 billion in annual sales volume and
have approximately 2,300 distribution partners.
That will make TSYS the sixth-largest U.S. acquirer
based on revenue and the United States’ third-largest
integrated payments provider, according to First
Annapolis Consulting.
Consumers
Consumer expectations are higher than ever. And our
dedication to providing consumers with alternative
banking solutions came into sharp focus in 2015.
Our consumer-facing prepaid segment, NetSpend®,
is positioned to become the number-one choice for
those consumers and businesses who want more
control over their money in order to move ahead with
their lives. In 2015, we had more than 96,000 distributing
locations and employers, serving almost four million
consumers. That made us the number-one U.S. prepaid
program manager based on gross dollar volume.
NetSpend had a banner year in 2015, which culminated
in a milestone of 16 consecutive quarters of double-
digit revenue growth, as well as multiple new launches
and distribution agreements.
Thanks to strong relationships across diverse acquisition
channels, NetSpend significantly increased its presence
in places consumers live and work. We drove organic
growth through launching and scaling new relationships
with trusted partners like Paychex®, Western Union®,
Brink’s®, Walmart® and Rite Aid®. NetSpend now also
offers a full suite of commercial prepaid products
including payroll and disbursement cards to one of TSYS’
biggest clients, a top-10 bank in the United States.
NetSpend wins by answering customers’ needs for
innovative products that deliver speed, security, control
and universal acceptance. 2016 will see the launch
of products to meet the needs of many small and
micro-business owners who already rely on NetSpend
products for their day-to-day spending.
As you’d expect, we’re also actively preparing for the final
rules from the Consumer Financial Protection Bureau
(CFPB) on prepaid products in 2016. Regardless of the
rules, we’re more committed than ever to developing our
partner network, and providing innovative, affordable
products to help consumers meet their financial needs.