First Data 2008 Annual Report Download - page 177

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Segment Description
Financial Services Provides issuer card and network solutions and payment management solutions for point of sale and recurring bill payments. Issuer
card and network solutions includes credit, debit and retail card processing, debit network services (including the STAR Network
and ATM processing), and output services for financial institutions and other organizations offering credit cards, debit cards and
retail private label cards to consumers and businesses to manage customer accounts. Payment management solutions include check
verification, settlement and guarantee services (including TeleCheck) and other payment options that support merchants and online
retailers, businesses, and government agencies. The segment's largest components of revenue consist of fees for account
management, transaction authorization and posting, network switching, check acceptance and warranty, as well as reimbursable
postage. In addition to issuer card and core payment solutions, Financial Services offers services to improve customer
communications, billing, online banking and consumer bill payment, and analytics.
International Comprised of businesses that provide the following services outside of the U.S.: credit, retail, debit and prepaid card processing;
merchant acquiring and processing; ATM and point-of-sale ("POS") processing, driving, acquiring and switching services; and card
processing software. The largest components of the segment's revenue are fees for facilitating the merchants' ability to accept credit,
retail and debit cards by authorizing, capturing, and settling merchants' credit, retail, debit, stored-value and loyalty card transactions
as well as for transaction authorization and posting, network switching and account management.
Prepaid Services Consists of businesses that provide a wide range of open and closed loop stored-value products and processing services. The closed
loop operations comprise the largest component of the segments revenue, providing gift card processing services to large national
merchants as well as fleet services to trucking companies. The open loop products are the fastest growing component of the segment
driven primarily by employers' adoption of the Money Network payroll product and general purpose reloadable card programs.
Integrated Payment
Systems
Includes the issuance of official checks which are sold by agents that are financial institutions and the issuance of money orders
which are sold by agents that are financial institutions and retail businesses. Official checks serve as an alternative to a bank's own
items such as cashiers or bank checks. Money orders serve as a disbursement option for a consumer or business. Revenue is
principally earned on invested funds which are pending settlement. The official check and money order businesses are conducted by
a subsidiary of the Company, Integrated Payment Systems, Inc., that is licensed to offer payment services that fall under state and
federal regulations. This segment is in the process of winding down its official check and money order businesses.
The business segment measurements provided to, and evaluated by, the Company's CODM are computed in accordance with the following principles:
• The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.
• Segment results exclude divested businesses.
• Segment revenue includes equity earnings in affiliates (excluding amortization expense) and intersegment revenue.
• Segment operating profit includes minority interest and equity earnings in affiliates, net of related amortization expense.
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