Cash America 2011 Annual Report Download - page 42

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Organic Growth and Development of New Credit Alternatives
The Company has the ability to leverage its existing retail services platform for pawn, consumer loan and check
cashing activities to expand its operating margins and add incremental earnings through the addition of new customers.
Domestically and internationally, the consumer credit market is evolving, which the Company believes will create new
opportunities for the Company to reach customers who have not previously considered using its traditional products and
services. The Company plans to utilize marketing and promotional campaigns to pursue new customers and to gain
market share by expanding the number of customers being served through its retail services and e-commerce operations.
Since acquiring Enova (formerly known as CashNetUSA) in 2006, the Company has been actively exploring
strategies to increase and enhance its Internet presence, with the goal of becoming a premier online consumer loan
provider. The Company now offers an array of consumer credit products over the Internet under the names
“CashNetUSA,” “QuickQuid,” “Pounds to Pocket,” “DollarsDirect,” and “Debit Plus.” The Company continues to
evaluate new markets in which to establish its Internet presence, similar to its entry into the United Kingdom during
2007 and Australia and Canada during 2009. Other countries are being evaluated for expansion of the Company’s
consumer loan products and any additional expansion will be pursued when the country-specific characteristics and
requirements meet the Company’s investment criteria. During 2008, the Company began a program with a third-party
storefront consumer loan company to offer consumer loans through an online lending channel operated by the
Company. Pursuant to the agreement between the parties, revenue is divided between the parties and each participant is
directly responsible for certain program expenses. During 2008, the Company introduced a multi-payment installment
loan product over the Internet, which typically has an average term of four months, and in 2010, the Company began to
offer longer-term installment products over the Internet that have terms of up to 36 months. In September 2010, the
Company began offering a line of credit product in the United States, for which the maximum credit limit available to
customers was $1,800 in 2011. The Company intends to continue pursuing the development of new products related to
the MLOC business in 2012 and to continue evaluating and offering new products and services that complement its
Internet specialty financial services in order to meet the growing financial services needs of consumers, both in the
United States and internationally.
The Company developed and utilizes proprietary and custom-designed technology platforms that are built for
scalability and flexibility. The technology platforms are designed to be powerful enough to handle the large volumes of
data required to evaluate customer applications and flexible enough to capitalize on changing customer preferences,
market trends and regulatory changes. Further, the information gathered from these technology platforms allows the
Company to focus on both existing and potential customers who it believes are more likely to provide the Company with
better credit performance. Through this approach, the Company is able to build a valuable list of consumers who both
use the credit products offered and to whom the Company can market its product offerings to help fulfill the customer’s
credit needs. The Company also developed a proprietary point-of-sale system that it began rolling out to its retail
services locations in the second half of 2011. This new system includes a single integrated, state-of-the-art system that
has created efficiencies within the retail services locations and will allow the Company to offer more services to
consumers. The Company will continue to pursue new customer acquisition through channels such as lead generation
(sourcing potential customers via third-party lead providers, which use digital, email or other marketing efforts to
acquire and provide the Company with loan applicants), traditional advertising and digital advertising.
Recent legislative and regulatory activity affecting the Company’s consumer loan products has led the Company
to also explore new credit product alternatives to help its customers meet their short-term credit needs. While some
legislative and regulatory actions in certain states where the Company operates has reduced the revenue per loan to
levels that make the product less profitable or unattractive, these regulatory changes do not eliminate the credit needs of
the Company’s customers. The Company remains committed to finding new and innovative solutions to help its
customers avoid higher cost alternatives, such as overdraft protection, returned check fees and late charges on bills, in
the absence of alternatives such as the consumer loan products.
Consistent with the goal of providing additional services in these markets, in late 2008 and early 2009, the
Company began providing gold buying services and pawn lending in many of its retail services locations that previously