This segment contributed 38 percent of the company’s revenue in 2004. Approximately 84 percent of the revenue in this segment comes from the Western Union money transfer business. In 2004, the Western Union money transfer business achieved revenue growth of 14 percent over 2003.

The global agent network has exceeded 220,000 locations. Today, more than 75 percent of Western Union’s agent locations operate outside the United States, and in the high-growth markets of China and India, Western Union now has more than 40,000 locations in these two countries combined. In 2005, the agent network is expected to grow by 30,000 locations, further expanding the Western Union® brand across the globe.

The consistency and long-term strength of Western Union is a direct result of the strategic focus on expanding and diversifying global distribution, building the brand and enhancing the consumer experience and finally, leveraging channels and diversifying product offerings.

In 2004, this segment contributed 36 percent of total First Data revenue. Merchant revenues, bolstered by the Concord acquisition, grew 44 percent in 2004 to $3.8 billion with profits up 37 percent to $990 million. PIN-debit transactions now represent 23 percent of the total merchant card transactions that we process, and they have increased 30 percent over 2003 (measured as if First Data had owned Concord throughout 2003). In addition, merchant locations increased 32 percent and now total 4.1 million.

The Merchant Services strategy is to identify and invest in high-growth portfolios, expand the sales force and increase sales productivity. The alliance strategy also remains essential to the segment’s success because it allows the business to effectively cover all segments of the market and leverage not only the brand, but also those of other well-known financial institutions. Nine new alliance partners were added in 2004.

Card Issuing Services posted a strong year. Revenues were up 14 percent to $2.4 billion. Profits rose 64 percent over 2003. During 2004, this segment completed account conversions for 11 clients totaling 58 million accounts. As of December 31, there were 406 million accounts on file, up 17 percent over 2003. Card Issuing Services has built a best-in-class cost structure that is constantly being fine-tuned to reflect the client base it serves.

The international divisions of our Merchant Services and Card Issuing Services segments, completed two key acquisitions in 2004: Cashcard in Australia and Delta Singular—which was renamed First Data Hellas—in Greece. First Data International exited 2004 on a $1 billion annualized revenue run rate. First Data International’s strategy is to leverage the card processing, merchant acquiring and ATM capabilities, prioritize market opportunities and seek to purchase businesses that strengthen core offerings.