Financial institutions include commercial banks, S&Ls, credit unions, finance companies, and brokerage houses.

Financial institutions are the major interface with retailers for establishing credit card programs including authorization, transaction processing, and check clearance. Financial institutions are also a major marketeer of check verification/guarantee services.

Less than 200 of the 20,000 plus financial institutions offer credit authorization services directly to retailers.

Approximately 5,000 financial institutions offer credit card programs through financial institutions (primarily large commercial banks) and through credit card vendors, including credit card associations and commercial processing vendors.

Credit card authorization services accomplished by financial institutions for their subscribing retailers are considered “in-house.” Such EDP expenditures have not been included as expenditures for information services in this study.



• The market for credit card authorization/check guarantee services focuses on consumers. In the aggregate, the size of the potential marketplace is defined by 1984 industry based data statistics:

Credit cards: seven billion transactions with a total volume approaching $300 billion.

Retail checks: over 20 billion checks with total check volume exceeding $470 billion.

• With respect to market penetration, 1984 industry data indicates that:

Less than 25% of all credit card transactions currently receive credit authorization.

Less than 3% of retail check dollar volume is validated/guaranteed.

• The six vendor groups that make up the structure of the credit card authorization and check guarantee services marketplace are shown in Exhibit lll-l. These groups interact through elaborate and complex voice and data networks to provide CCAS/CGS through an increasingly electronic retailer interface to consumers.