Credit Card Processing & Money Transferring in the US Industry Market Research Report Now Available from IBISWorld

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The industry's reliance on transaction volumes and the value of noncash payments makes it susceptible to fluctuations in the general economy. Consequently, industry revenue declined as the Great Recession began in 2008. As the economy has entered recovery, the negative trend has reversed. As unemployment falls and consumer confidence improves, the demand for products and services will rise, increasing transaction volumes. Businesses and other organizations are also projected to boost spending, supporting the industry’s growth. For these reasons, industry research firm IBISWorld has updated its report on the Credit Card Processing & Money Transferring industry.

IBISWorld Market Research

IBISWorld Market Research

As demand for products and services rises, transaction volumes will increase

Despite an uncertain economy and decreases in disposable income, the Credit Card Processing and Money Transferring industry has been able to stay afloat throughout the recession. The recession set back industry revenue, “but the large-scale implementation and popularity of electronic payment technology has provided the industry with a solid foundation for growth,” says IBISWorld industry analyst Eben Jose. The industry mainly generates revenue through data processing and international transactions fees. Therefore, while the volume of transactions decreased during the recession, the ratio of electronic payments to cash or check methods actually increased. As a result, in the five years to 2012, industry revenue is expected to rise at an annualized rate of 0.4% to $46.5 billion.

The industry is highly fragmented within each sector, as most industry operators only specialize in one business segment, such as wire transfer, check processing, or credit card purchasing. Nevertheless, the Credit Card Processing and Money Transferring industry's overall reliance on transaction volumes and the value of noncash payments makes it susceptible to fluctuations in the general economy. Consequently, industry revenue declined at the onset of the economic downturn in 2008. During that year, revenue dipped 0.8% to $45.2 billion. According Jose, “this decline can largely be attributed to the bursting of the real estate bubble, the tightening of credit markets and the overall downward spiral of the US economy.” The downward trend worsened in 2009, when revenue fell 3.4% because of lower transaction volumes and increased competition among operators. With the economy beginning to recover, however, this negative trend will reverse, and revenue is expected to jump 4.9% in 2012.

During the five years to 2017, general economic improvements will drive industry growth. As unemployment falls and consumer confidence improves, demand for products and services will rise, increasing transaction volumes. Businesses are also projected to boost spending as their revenue improves and profit picks back up. Consequently, industry revenue is expected to steadily rise throughout the next five years. In addition to revenue growth, profit margins are set to improve as operators benefit from consolidation and technological advancements. For example, the ratio of revenue per firm is expected to increase, which highlights the increased productivity that comes along with consolidation. In light of these efforts, large firms such as American Express Company, Visa USA and Mastercard International will be able to take advantage of economies of scale and increase their market share. For more information, visit IBISWorld’s Credit Card Processing & Money Transferring in the US industry report page.

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IBISWorld industry Report Key Topics

Establishments in this industry primarily engage in financial transaction processing, reserve and liquidity services, and check or other financial instrument clearinghouse services. The industry excludes electronic transactions associated with the US Federal Reserve (central bank).

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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