Western Union 2012 Annual Report Download - page 17

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Competition
Western Union competes with a diverse set of service providers offering both cash and electronic-based payment solutions.
Competition in electronic payment services includes financial institutions (which may offer consumer bill payment 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, innovation, and price.
Business Solutions Segment
In our Business Solutions segment, we facilitate payment and foreign exchange solutions, primarily cross-border, cross-
currency transactions, for small and medium size enterprises and other organizations and individuals.
Operations
The substantial majority of our revenue in this segment is derived from foreign exchange revenues, which are based on the
difference between the exchange rate set by us to the customer and the rate at which we are able to acquire the currency. Customers
may remit a check or make an electronic or wire transfer in order to initiate a transaction. Our Internet services are provided in
partnership with other websites for which we act as the service provider and through our own website. The significant majority
of the segment's revenue was generated outside of the United States during all periods presented.
Services
Business Solutions payment transactions are conducted through various channels including the phone and Internet. Payments
are made predominately through wire transfers and ACH, but in some situations, checks are remitted. The majority of Business
Solutions' business relates to exchanges of currency at the spot rate which enables customers to make cross-currency payments.
In addition, in certain countries, we write foreign currency forward and option contracts for customers to facilitate future payments.
Distribution and Marketing Channels
Our business payment services are primarily offered over the phone, through partner channels, and via the Internet. Our
Internet services are marketed through co-branding arrangements with our website partners as well as on our website.
Our Business Solutions services are available in 30 countries. We have relationships with approximately 100,000 customers
with respect to our payment solutions. These relationships are a core component of our business payments services. No individual
customer accounted for greater than 10% of this segment's revenue since the acquisition of TGBP.
Industry Trends
The business-to-business payments industry has evolved with technological innovations that have created new methods of
processing payments from businesses to other businesses. The various products within the Business Solutions industry are in
varying stages of development outside the United States. The cross-border payments industry is expected to expand in the future
due to the expanding global focus of many businesses.