Western Union 2011 Annual Report Download - page 90

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We are exposed to credit risk in our Business Solutions business relating to: (a) derivatives written by us to our
customers and (b) receivables from certain customers for which beneficiaries are paid prior to receiving cleared
funds from the customer (known as “early release”). For the derivatives, the duration of these contracts is
generally nine months or less. The credit risk associated with our derivative contracts increases when foreign
currency exchange rates move against our customers, possibly impacting their ability to honor their obligations to
deliver currency to us or to maintain appropriate collateral with us. For early release customers, collection
ordinarily occurs within a few days. To mitigate risk, we perform credit reviews of the customer on an ongoing
basis, and, for our derivatives, we may require certain customers to post collateral or increase collateral based on
the fair value of the customer’s contract and their risk profile.
Our losses associated with bad debts have been less than 1% of our revenues in all periods presented.
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