توسعه راه حل های تاکتیکی برای صدور کارت اعتباری الکترونیکی Development of Tactical Solutions for the E-Credit Card Issuing Industry

1. Introduction The economic segment of the general environment in the credit card issuing industry is advancing as the US economy improves. As the employers and employees’ disposable incomes are increasing, the number of people who are willing to borrow money for spending is also increasing in a large scale, which will bring great benefits to the credit issuing industry. Krajewski, Ritzman, and Malhotra (2007) mentioned five developments in the global market that require companies to formulate effective global strategies. One of the developments is “loosened regulations on financial institutions” that focused on the US government’s effort to remove “interest rate ceiling to allow domestic banks to attract more foreign investors by offering higher rates.” On the other hand, “foreign banks removed barriers to entry.” The authors stated that “the world’s financial systems became more open, making it easier for firms to locate where capital supplies, and resources are cheapest.” (p.14) However, Oja states in Standard & Poors NetAdvantage Industry Survey for Diversified financial services (2014) that “currently, financial markets and their participants face more regulations” (p.12). Although the development of “loosened regulations on financial institutions” is debatable, globalization has had a tremendous effect on financial services industries, especially the credit card companies. Oja also states that “credit card companies have generally concentrated on developed markets such as Canada and the United Kingdom, where cultural attitudes toward credit are most in tune with those of the US. As these markets have also matured, some companies have expanded to other markets” (p.20). The “other markets” mentioned are financial markets in some developing countries, like China, that lacks proper third-party credit bureaus. Therefore, the problem with the globalization efforts in credit card companies is “the lack of credit bureaus limits unsecured lending to some extent” (p.20). According to the data and the trend in Carusotto (2014), revenues are the single biggest dollar amount for credit card issuing industry. Industry Value Added (IVA) is the difference between “the market value of goods and services produced by the industry” and “the cost of goods and services used in production.” IVA is also used to measure “the industry’s contribution to GDP, or profit plus wages and depreciation.” Enterprise is “a division that is separately managed and keeps management accounts.” Establishment is “a single physical location where business is conducted or where services or industrial operations are performed” (Carusotto, 2014, p.39). In other words, Establishment is per unit and Enterprise is the total units. Industry revenue in the industry dropped significantly during the credit crisis periods from 2008 to 2009. However, IVA dropped even more right before the crisis. The profit loss should have given a warning to the companies that the crisis is about to happen. Surprisingly enough, the wages stayed fairly stable.