 |
|
Credit Card Processing Industry Profile Excerpt
| SIC Codes: 6153, 7389 NAICS Codes: 52232 Page Length: 10-12 Last Quarterly Update: 7/7/2008 View Sample Industry Profile |
 |
The US credit card processing industry includes fewer than 500 companies with combined annual revenue under $10 billion. Major companies include First Data Corporation, Total System Services, Global Payments, and Bank of America. The industry is highly concentrated: the top four companies account for 40 percent of industry revenues.
COMPETITIVE LANDSCAPE
Demand is driven by consumer spending. The profitability of individual companies depends on efficient operations, as services are sold largely based on cost. Large companies have big economies of scale in processing and can provide more services; small companies can compete by specializing in industries and providing custom services. The business is highly automated and capital-intensive: average annual revenue per employee is about $225,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Processors provide transaction services to banks that issue credit cards and to merchants that accept credit card payments. Merchant products include authorizing, capturing, and settling merchants’ credit and debit card transactions, and handling chargebacks. Chargebacks occur when a consumer disputes a charge and charges it back to the merchant. Processors also sell or lease point-of-sale (POS) terminals. Card issuer products include transaction authorization and posting, statement generation and printing, and card embossing.
Large processors such as First Data Corporation and Total System Services provide services to both sides of the transaction. Small processors typically offer either merchant or card issuing services, and may specialize in particular vertical markets such as credit unions or retail cards. For every merchant transaction there is ...
Would you or your company benefit from having unlimited access to First Research’s industry intelligence tools? Click Here to find out more about Subscription options.