Financial Transaction Processing
Companies in this industry provide services such as credit card processing, electronic funds transfer, and check clearing. Major companies include Bread Financial, Fiserv, Heartland Payment Systems, Mastercard, Visa, and Western Union (all based in the US), as well as Cielo (Brazil), Moneris (Canada), and UnionPay International (China).
Worldwide, many large credit card processors operate and maintain processing centers globally. According to the Nilson Report, Asia/Pacific region has the most purchase transactions in 2023, followed by Middle East and Africa, and Latin America.
The US financial transaction processing industry includes more than 4,300 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $80 billion.
Competitive Landscape
Technology is transforming the financial transaction processing industry and consumers' interactions with money. The use of cash as a payment method is plummeting, although it remains the predominant form of payment for small purchases.
In recent years, the financial transaction processing industry has come under increasing pressure from fast-growing financial technology (aka fintech) companies that are developing new platforms and business models for delivering financial services, including the making, receiving, and processing of payments. Paper checks, credit card fees, money transfers, lending, and more are all being disrupted by new technologies. Innovations posing a threat to established industry players include the cryptocurrency Bitcoin; smartphone-enabled payments, such as Google Wallet and Apple Pay; mobile banking; and "smile to pay," a technology that allows consumers to authenticate mobile payments by scanning their faces with a smartphone. In Sweden -- fast becoming a cashless society -- more than 4,000 people have had microchips implanted in their hands to pay for things. By the end of 2023, about $1 trillion will transact via mobile P2P apps, driven by Venmo, Zelle, and Cash App, according to Insider Intelligence.
The profitability of individual companies depends on efficient operations, as services are sold largely based on cost. Large companies have economies of scale in processing and typically can provide more services; small companies can compete by specializing in industries and providing custom services. The US industry is highly concentrated: the top 50 companies account for about 85% of industry revenue.
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,
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