Western Union 2011 Annual Report Download - page 35

and reputation and expose us to potential liability which may not be fully covered by our business interruption
insurance. Our data applications may not be sufficient to address technological advances, regulatory
requirements, changing market conditions or other developments. In addition, any work stoppages or other labor
actions by employees, the significant majority of which are located outside the United States, who support our
systems or perform any of our major functions could adversely affect our business.
If we are unable to maintain our agent, subagent or global business payments networks under terms
consistent with those currently in place, or if our agents or subagents fail to comply with Western Union
business and technology standards and contract requirements our business, financial condition and results of
operations would be adversely affected.
Most of our consumer-to-consumer revenue is derived through our agent network. In addition, our
international agents may have subagent relationships in which we are not directly involved. Transaction volumes
at existing agent and subagent locations often increase over time and new agents and subagents provide us with
additional revenue. If, due to competition or other reasons, agents or subagents decide to leave our network, or if
we are unable to sign new agents or maintain our agent network under terms consistent with those currently in
place, or if our agents are unable to maintain relationships with or sign new subagents, our revenue and profit
growth rates may be adversely affected. Agent attrition might occur for a number of reasons, including a
competitor engaging an agent or an agent’s dissatisfaction with its relationship with us or the revenue derived
from that relationship. In addition, agents may generate fewer transactions or less revenue for various reasons,
including increased competition, political unrest or changes in the economy. Because an agent is a third party
that engages in a variety of activities in addition to providing our services, it may encounter business difficulties
unrelated to its provision of our services, which could cause the agent to reduce its number of locations, hours of
operation, or cease doing business altogether.
We rely on our agents’ information systems and/or processes to obtain transaction data. If an agent or subagent
loses information, if there is a significant disruption to the information systems of an agent or subagent, or if an
agent or subagent does not maintain the appropriate controls over their systems, we may experience reputational
harm which could result in losses to the Company.
We have relationships with more than 10,000 consumer payments businesses to which our customers can
make payments. These relationships are a core component of our global business payments services, and we
derive a substantial portion of our global business payments revenue through these relationships. If we are unable
to sign new relationships or maintain our current relationships under terms consistent with those currently in
place, our revenue and profit growth rates may be adversely affected.
Our business, financial condition and results of operations could be harmed by adverse rating actions by
credit rating agencies.
If our credit ratings are downgraded, or if they are placed under review or given a negative outlook, our
business, financial condition and results of operations could be adversely affected and perceptions of our
financial strength could be damaged, which could adversely affect our relationships with our agents, particularly
those agents that are financial institutions or post offices. In addition, an adverse credit rating by a rating agency,
such as a downgrade or negative outlook, could result in regulators imposing additional capital and other
requirements on us, including imposing restrictions on the ability of our regulated subsidiaries to pay dividends.
Also, a significant downgrade could increase our costs of borrowing money, adversely affecting our business,
financial condition and results of operations.
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