First Data 2009 Annual Report Download - page 8

The most significant competitive factors relate to price, brand, strength of financial institution partnership,
breadth of features and functionality, scalability and servicing capability. The Retail and Alliance Services
segment is further impacted by large merchant and large bank consolidation, card association business model
expansion, and the expansion of new payment methods and devices.
In both the Retail and Alliance 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.
Retail and Alliance Services Seasonality
Retail and Alliance Services’ revenues and earnings are impacted by the volume of consumer usage of
credit cards, debit cards, stored value cards and checks written at the point of sale. Retail and Alliance Services
generally experiences 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.
Retail and Alliance Services Geographic Mix and Revenues
Revenues from external customers for the Retail and Alliance Services segment are substantially all earned
in the U.S. Merchant revenues outside of the U.S. are managed and reported by the Company’s International
segment. Within the U.S., revenues from external customers are spread across the country since Retail and
Alliance Services has merchant customers and alliance partners across geographic regions and a large percentage
of its transactions occur at national merchants.
Retail and Alliance Services Significant Customers
The Retail and Alliance Services segment does not have any individually significant customers; however,
the Company has two significant merchant alliance relationships with financial institutions. A third significant
merchant alliance was terminated on November 1, 2008 as discussed in Note 4 of the Company’s Consolidated
Financial Statements in Item 8 of this Form 10-K.
Financial Services Segment
The Financial Services segment is comprised of:
(1) Credit and retail card processing services;
(2) Debit network and processing services;
(3) Output services; and
(4) Other services including remittance processing.
Financial Services segment revenues from external customers, segment EBITDA, and assets represent the
following percentages of total segment and All Other and Corporate revenues from external customers, total
segment and All Other and Corporate EBITDA and consolidated assets:
Successor Predecessor
Year ended
December 31,
2009
Year ended
December 31,
2008
Period from
September 25, 2007
through
December 31,
2007
Period from
January 1, 2007
through
September 24,
2007
Segment revenues from external customers ........ 22% 22% 22% 24%
Segment EBITDA ............................ 31% 29% 29% 31%
Assets (at December 31) (1) .................... 13% 14% 14%
8