Western Union 2011 Annual Report Download - page 20

Competition
Western Union competes with a diverse set of service providers offering both cash and electronic-based
payment solutions and business-to-business payment services. Competition in electronic payments and
business-to-business payment services include financial institutions (which may offer consumer bill payment or
business payment services in their own name or may “host” payment services operated under the names of their
clients) and other non-bank competitors. Competition for electronic payments also includes businesses offering
their own or third-party services to their own customers and third-party providers of all sizes offering services
directly to consumers. In many cases, competitors specialize in a small number of industries. Competitors for
cash payments include businesses that allow consumers to pay a bill at one of their locations, or at the location of
a partner business, as well as mail and courier services. The ongoing trend away from cash-based bill payments
in the United States and competitive pressures, which result in lower cash-based bill payment volumes and a shift
to lower revenue per transaction products, continue to impact this business.
We believe the most significant competitive factors in this segment relate to brand recognition, customer
service, trust and reliability, convenience, speed, variety of payment methods, service offerings and price.
For additional details regarding our global business payments segment, see Item 7 of Part II and our historical
financial statements and the notes to those statements included elsewhere in this Annual Report on Form 10-K.
Other
Our remaining businesses are grouped in the “Other” category, which primarily includes our money orders,
which are sold primarily in the United States and Canada, and our prepaid services.
Customers use our money orders for making purchases, paying bills, and as an alternative to checks that can be
deposited directly into bank accounts or cashed at check cashiers, some banks and some retailers. We derive
investment income from interest generated on our money order settlement assets, which are primarily held in
United States tax exempt state and municipal debt securities.
Our prepaid cards are sold primarily in the United States through retail locations and on the Internet. This
service allows consumers to load money or receive a direct deposit onto the card for use at a later date. The card
can be used to withdraw money from an ATM or used where debit cards are accepted. We have agreements with
depository institutions insured by the Federal Deposit Insurance Corporation that serve as the issuers of our cards
in the United States. In the fourth quarter of 2011, we began offering certain of our prepaid cards in the United
Kingdom and began testing in certain European countries.
Intellectual Property
The Western Union brand, including trademark registrations in many countries, is material to our Company.
The international expansion of our agent network over the past decade has taken the Western Union brand nearly
everywhere consumers send and receive money. The loss of the Western Union trademark or a diminution in the
perceived quality associated with the name would harm our growth. We offer money transfer services under the
Western Union, Orlandi ValutaSM or Vigo®brands in more than 200 countries and territories, and various global
business payment services under several brands like Speedpay, Equity Accelerator, Just in Time EFT, Paymap®,
Western Union Payments, Quick Collect, Convenience Pay, Quick Pay, Quick Cash, Pago Fácil (registered in
Argentina), Western Union Business Solutions and other trademarks and service marks, such as MoneyWiseTM,
that are also important to our Company.
Our operating results over the past several years have allowed us to invest significantly each year to support
our brands. In 2011, we invested approximately $225 million to market, advertise and promote our brands and
services, including costs of dedicated marketing personnel. Many of our agents have also contributed significant
financial resources to assist with marketing our services.
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