PULSE Network Competition
Now Viewing PULSE Network's competition in: Credit Card Processing
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Does the company charge clients based on volume or a minimum fixed fee? - Fixed fees are becoming more common.
How many card accounts are on file? What percentage is active versus inactive? - Processors can have millions of accounts; active accounts are important to merchant processors.
What is the company’s discount rate? - Prices average 2 percent, but are higher for online transactions.
Does the company use an Independent Sales Organization (ISO)? How large is it? - Merchant processors typically sell using ISOs as well as a direct sales force.
What processors are the company’s primary competitors? - First Data Corporation, NOVA Information Systems, and Total System Services are large competitors.
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.
Business Challenges
CRITICAL ISSUES
Revenues Affected by Consumer Spending - Industry revenues are closely tied to the number of credit card transactions, which depend on consumer spending. For example, during the early 2000s recession, transaction revenues for major industry player First Data were flat, versus 20 percent increases in other years. Over a third of all consumer retail purchases are made using credit cards.
Financial Consolidation Pushes Industry Consolidation - Bank consolidations often result in lost business for a specific processor. An acquiring bank will usually transfer the credit card portfolio of the acquired bank to its own processor. As consolidation continues, the processing industry will become more concentrated.
Industries Where PULSE Network Competes
- Banking
- Automated Teller Machine Operators
- Financial Services
- Transaction, Credit & Collections
- Electronic Payment Systems
- Transaction Processing & Settlement
- Transaction, Credit & Collections
