First Data 2008 Annual Report Download - page 12

Financial Services Segment Competition
The Company's Financial Services segment competes with several other third-party card processors and debit networks in the U.S., as well as financial
institutions that possess in-house operations to manage card issuance and maintenance. The Company also faces significant competition from regional and
national operators of debit networks. The check guarantee and verification products compete principally with the products of two other national companies.
The most significant competitive factors are price, system performance and reliability, breadth of features and functionality, disaster recovery
capabilities and business continuity preparedness, data security, scalability, and flexibility of infrastructure and servicing capability. The Financial Services
business is further impacted by financial institution consolidation.
In both the Merchant Services and Financial Services segments, the card associations and payment networks—Visa, MasterCard and Discover—are
increasingly offering products and services that compete with the Company's products and services.
Financial Services Seasonality
Debit processing, STAR Network and check verification, settlement and guarantee revenues and earnings are impacted by the volume of consumer
usage of debit cards and checks at the point of sale. Such volumes are generally impacted by increased POS activity during the traditional holiday shopping
period in the fourth quarter, the back-to-school buying period in the third quarter, and around other nationally recognized holidays.
Financial Services Geographic Mix and Revenues
Revenues from external customers for the Financial Services segment are substantially all earned in the U.S. Card issuing revenues outside of the U.S.
are reported by the Company's International segment. Within the U.S., revenues from external customers are geographically dispersed throughout the country.
Financial Services Significant Customers
During 2008, the Company had a significant relationship with one client whose revenues represented approximately 12% of the Financial Services
segment revenue for the year ended December 31, 2008.
International Segment
The International segment is comprised of:
• Credit, retail, debit and prepaid card processing;
• Merchant acquiring and processing; and
• ATM and POS processing, driving, acquiring and switching services.
International revenues from external customers, operating profit, and assets represent the following percentages of FDC's consolidated revenues, total
reported segment operating profit and consolidated assets:
Successor Predecessor
Year ended
December 31,
2008
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
2007
Year ended
December 31,
2006
Revenue from external customers 20% 21% 19% 17%
Operating profit (1), (2) 18% 22% 11% 10%
Assets (2) 15% 13% 10%
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