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Significant Customer Concentrations
12 Months Ended
Dec. 31, 2012
Significant Customer Concentrations [Abstract]  
Significant Customer Concentrations
Note 16—Concentrations of Credit Risk
Financial instruments that subject us to concentration of credit risk consist primarily of unrestricted cash and cash equivalents, restricted cash, investment securities, accounts receivable, loans and settlement assets. We deposit our unrestricted cash and cash equivalents and our restricted cash with regional and national banking institutions that we periodically monitor and evaluate for creditworthiness. Credit risk for our investment securities is mitigated by the types of investment securities in our portfolio, which must comply with strict investment guidelines that we believe appropriately ensures the preservation of invested capital. Credit risk for our accounts receivable is concentrated with card issuing banks and our customers, and this risk is mitigated by the relatively short collection period and our large customer base. We do not require or maintain collateral for accounts receivable. We maintain reserves for uncollectible overdrawn accounts and uncollectible trade receivables. Approximately 92.5% of our borrowers reside in the state of Utah and approximately 39.4% in the city of Provo. Consequently, we are susceptible to any adverse market or environmental conditions that may impact this specific geographic region. Credit risk for our settlement assets is concentrated with our retail distributors, which we periodically monitor.
A credit concentration may exist if customers are involved in similar industries, economic sectors, and geographic regions. Our retail distributors operate in similar economic sectors but diverse domestic geographic regions. The loss of a significant retail distributor could have a material adverse effect upon our card sales, profitability, and revenue growth.
Revenues derived from our products sold at our four largest retail distributors represented the following percentages of our total operating revenues:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Walmart
64
%
 
61
%
 
63
%
Three other largest retail distributors, as a group
20
%
 
20
%
 
20
%
Excluding stock-based retailer incentive compensation of $8.3 million, $17.3 million and $13.4 million for the years ended December 31, 2012, 2011 and 2010, respectively, revenues derived from our products sold at our four largest retail distributors represented the following percentages of our total operating revenues:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Walmart
65
%
 
62
%
 
64
%
Three other largest retail distributors, as a group
20
%
 
19
%
 
18
%
Note 19—Significant Customer Concentration (continued)
The concentration of GPR cards activated (in units) and the concentration of sales of cash transfer products (in units) derived from our products sold at our four largest retail distributors was as follows:
 
Year Ended December 31,
 
2012
 
2011
 
2010
Concentration of GPR cards activated (in units)
87
%
 
80
%
 
84
%
Concentration of sales of cash transfer products (in units)
88
%
 
90
%
 
93
%
Settlement assets derived from our products sold at our four largest retail distributors comprised the following percentages of the settlement assets recorded on our consolidated balance sheet:
 
December 31,
 
2012
 
2011
Walmart
35
%
 
33
%
Three other largest retail distributors, as a group
38
%
 
39
%

At December 31, 2012 the customer funds underlying the Walmart co-branded GPR cards were held by GE Capital Retail Bank. These funds are held in trust for the benefit of the customers, and we have no legal rights to the customer funds. Additionally, we have receivables due from GE Capital Retail Bank that are included in accounts receivable, net, on our consolidated balance sheets. The failure of this entity could result in significant business disruption, a potential material adverse affect on our ability to service our customers, potential contingent obligations by us to customers and material write-offs of uncollectible receivables.