What changed in this filing

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Item 1. Business

2022-02-23 compared with 2021-02-22 · 38 added, 41 removed, 536 unchanged (13% of the section changed)

11 unchanged sentences

We operate in the following three segments as of December 31, 2021 :

The Electronic Fund Transfer ("EFT") Processing Segment processes transactions for a network of 37,729 ATMs and approximately 340 ,000 POS terminals across Europe, the Middle East, Asia Pacific, and the United States.

We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, and card issuing and merchant acquiring services.

In addition to our core business, we offer a variety of value added services, including ATM and POS dynamic currency conversion ("DCC"), domestic and international ATM surcharge, advertising, customer relationship management ("CRM"), mobile top-up, bill payment, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.

The Electronic Fund Transfer ("EFT") Processing Segment processes transactions for a network of 42,713 ATMs and approximately 438 ,000 POS terminals across Europe, Africa, the Middle East, Asia Pacific, and the United States.

We provide comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, and card issuing and merchant acquiring services.

In addition to our core business, we offer a variety of value added services, including ATM and POS dynamic currency conversion ("DCC"), domestic and international ATM surcharge, advertising, delivery of non-cash products ("digital content") via ATMs, customer relationship management ("CRM"), mobile top-up, bill payment, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.

Through this segment, we also offer a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.

33 unchanged sentences

EFT Processing Segment

Our EFT Processing Segment provides comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit and debit card outsourcing, card issuing and merchant acquiring services.

In addition to our core business, we offer a variety of value added services, including ATM and POS DCC, domestic and international surcharge, advertising, CRM, prepaid mobile top-up, bill payment, money transfer, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.

Our EFT Processing Segment provides comprehensive electronic payment solutions consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit, debit and prepaid card outsourcing, card issuing and merchant acquiring services.

In addition to our core business, we offer a variety of value added services, including ATM and POS DCC, domestic and international surcharge, foreign currency dispensing, advertising, digital content sales at ATMs, CRM, prepaid mobile top-up, bill payment, money transfer, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions and tax-refund services.

We provide these services either through our Euronet -owned ATMs and POS terminals, through contracts under which we operate ATMs and POS terminals on behalf of our customers or, for certain services, as stand-alone products.

4 unchanged sentences

The EFT Processing Segment also generates revenues from POS operations and merchant management, card network management for credit, debit, prepaid and loyalty cards, prepaid mobile airtime recharge and other electronic content on ATMs and ATM advertising.

We primarily service financial institutions across Europe, the Middle East, Asia Pacific, and the United States.

We primarily operate across Europe, Africa, the Middle East, Asia Pacific, and the United States.

As of December 31, 2021 , we operated 42,713 ATMs compared to 37,729 at December 31, 2020.

The decrease was largely due to temporary closures of ATMs in response to the COVID-19 pandemic.

The increase was largely due to the reactivation of ATMs that were temporarily closed in response to the COVID-19 pandemic related tourism disruptions.

We monitor the number of transactions made by cardholders on our network.

4 unchanged sentences

EFT Processing Segment transactions per year

The increase in transactions for 2020 is the result of a significant increase in the volume of lower value, digitally-initiated payment processing transactions for an Asia Pacific customer's bank wallet and e-commerce site.

The increase in transactions for 2020 and 2021 is the result of a significant increase in the volume of lower value, digitally-initiated payment processing transactions for an Asia Pacific customer's bank wallet and e-commerce site.

Our processing centers for the EFT Processing Segment are located in Germany, Hungary, India, China, and Pakistan.

Our processing centers run two types of proprietary transaction switching software:

our legacy ITM software, which we have used and sold to financial institutions since 1998 through our Software Solutions unit, an innovative switching software package named "REN", which is hosted in Germany and India, that was released in 2017.

our legacy ITM software, which we have used and sold to financial institutions since 1998 through our Software Solutions unit, and an innovative switching software package named "REN", which is hosted in Germany and India, that was released in 2017.

The processing centers operate 24 hours a day, seven days a week.

3 unchanged sentences

Euronet offers outsourced management solutions to financial institutions, merchants, mobile phone operators and other organizations using our processing centers' electronic financial transaction processing software.

Our outsourced management solutions include management of existing ATM networks, development of new ATM networks, management of POS networks, management of automated deposit terminals, management of credit and debit card databases and other financial processing services.

Our outsourced management solutions include management of existing ATM networks, development of new ATM networks, management of POS networks, management of automated deposit terminals, management of credit, debit and prepaid card databases and other financial processing services.

These solutions include 24-hour monitoring of each ATM's status and cash condition, managing the cash levels in each ATM, coordinating the cash delivery and providing automatic dispatches for necessary service calls.

4 unchanged sentences

Euronet-Branded ATM Transaction Processing

Our Euronet-branded ATM networks, also known as IAD networks, are primarily managed by a processing center that uses our internally developed software solutions.

The ATMs in our IAD networks are able to process transactions for holders of credit and debit cards issued by or bearing the logos of financial institutions and international card organizations such as American Express ® , Visa ® , Mastercard ® , Diners Club International ® , Discover ® and UnionPay International © , as well as international ATM networks such as PULSE ® .

This is accomplished through our agreements and relationships with these institutions, international credit and debit card issuers and international card associations.

Our Euronet-branded ATM networks, also known as IAD networks, are primarily managed by a processing center that uses our market-leading internally developed software solutions.

The ATMs in our IAD networks are able to process transactions for holders of credit, debit and prepaid products issued by or bearing the logos of financial institutions and international card organizations such as American Express ® , Visa ® , Mastercard ® , JCB, Diners Club International ® , Discover ® and UnionPay International © , as well as international ATM networks such as PLUS, CIRRUS and PULSE ® or domestic networks such as NYCE, Shazam, AFFN, STAR and others across North America.

This is accomplished through our agreements and relationships with these institutions, international credit, debit and prepaid card issuers, international card associations and domestic card associations.

When a bank cardholder conducts a transaction on a Euronet-owned ATM or auto mated deposit terminal, we receive a fee from the cardholder's bank for that transaction.

The bank pays us this fee either directly or indirectly through a central switching and settlement network.

When paid indirectly, this fee is referred to as the "interchange fee." All of the banks in a shared ATM and POS switching system establish the amount of the interchange fee by agreement.

We receive transaction processing fees for successful transactions and, in certain circumstances, for transactions that are not complete d because they fail to receive authorization.

When paid indirectly, this fee is referred to as the "interchange fee." We receive transaction processing fees for successful transactions and, in certain circumstances, for transactions that are not complete d because they fail to receive authorization.

The fees paid to us by the card issuers are independent of any fees charged by the card issuers to cardholders in connection with the ATM transactions.

7 unchanged sentences

Dynamic currency conversion;

Prepaid telecommunication recharg es and other electronic content.

Prepaid mobile airtime recharges and other electronic content.

Card Acceptance or Sponsorship Agreements

Our agreements with financial institutions and international card organizations generally provide that all credit and debit cards issued by the financial institution or organization may be used at all ATMs that we operate in a given market.

In most markets, we operate under sponsorship by our own e-money licensed entities.

In most markets, we operate under sponsorship by our own e-money or payment service licensed entities.

In some markets, we have agreements with a financial institution under w hich we are designated as a service provider (which we refer to as "sponsorship agreements") for the acceptance of domestic cards and/or cards bearing international logos, such as Visa ® and Mastercard ® .

22 unchanged sentences

We have developed value added services in addition to basic cash withdrawal and balance inquiry transactions.

These value added services include mobile top-up, fraud management, bill payment, domestic and international surcharge, CRM, foreign remittance payout, cardless payout, banknote recycling, electronic content, ticket and voucher, and advertising.

We are committed to the ongoing development of innovative new products and services to offer our EFT processing customers.

28 unchanged sentences

The expansion and enhancement of our outsourced management solutions in new and existing markets will remain an important business opportunity for Euronet.

Increasing the number of non-owned ATMs and POS terminals that we operate under management services agreements and continued development of our credit and debit card outsourcing business could provide continued growth while minimizing our capital investment.

Increasing the number of non-owned ATMs and POS terminals that we operate under management services agreements and continued development of our credit, debit and prepaid card outsourcing business could provide continued growth while minimizing our capital investment.

Complementary services offered by our epay Segment, where we provide prepaid mobile top-up services through POS terminals, strengthens the EFT Processing Segment's line of services.

7 unchanged sentences

No individual customer of the EFT Processing Segment makes up greater than 10% of total consolidated revenues.

In India, we have contracts with government-owned banks to provide certain ATM driving and transaction switching services and mobile airtime recharge services.

In India, Pakistan and Indonesia we have contracts with banks and telecommunications companies that are majority-owned by the government to provide certain ATM driving and transaction switching services, digital content distribution and mobile airtime recharge services.

Additionally, certain government-owned banks are members of our shared ATM network in India and we provide software services to financial institutions partially owned by government-owned banks.

In Austria, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Germany, Hungary, Ireland, Italy, Malta, Poland, Portugal, Romania, Slovakia, Spain, and the United Kingdom, we lease land and other property for certain ATM sites from companies that are majority-owned by the government.

In Pakistan, we have a contract with a government-owned bank to provide software support services.

In Austria, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Germany, Hungary, Ireland, Italy, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom, we lease land and other property for certain ATM sites from companies that are majority-owned by the government.

In China and Greece, we have contracts with clients and financial institutions that are partially owned by the government.

4 unchanged sentences

Competitive advantages in our EFT Processing Segment include breadth of service offering, network availability and response time, price to both the financial institution and to its customers, ATM location and access to other networks.

We currently offer prepaid mobile airtime top-up services and other electronic content and payment processing services for various prepaid products, cards and services on a network of approximately 748,000 POS terminals across approximately 338,000 retailer locations in Europe, the Middle East, Asia Pacific, the United States and South America.

Our processing centers for the epay Segment are located in the U.K., Germany, Italy, and the U.S.

We currently offer prepaid mobile airtime top-up services and other electronic content and payment processing services for various prepaid products, cards and services on a network of approximately 775,000 POS terminals across approximately 335,000 retailer locations in Europe, the Middle East, Asia Pacific, North America and South America.

Our processing centers for the epay Segment are located in the United Kingdom, Germany, Italy, and the United States.

Since 2003, we have expanded our prepaid business in new and existing markets by drawing upon our depth of experience to build and expand relationships with content providers, mobile phone operators and retailers.

61 unchanged sentences

Through our Cadooz subsidiary, we also distribute vouchers and physical gifts into the business-to-business ("B2B") channel principally for the purposes of employee and customer incentives and rewards.

In certain locations, the terminals used for prepaid services can also be used for electronic funds transfer to process credit and debit card payments for retail merchandise.

In certain locations, the terminals used for prepaid services can also be used for electronic funds transfer to process credit, debit and prepaid card payments for retail merchandise.

We provide promotion and advertising for content providers of their prepaid content throughout our retail distribution network.

11 unchanged sentences

However, we have been establishing agreements with independent German retailers in order to diversify our exposure to such distributors.

The number of transactions processed on our POS netw orks has increased over the last five years at a compound annual growth rate ("CAGR") of approximately 13.1% as indicated in the following table:

The number of transactions processed on our POS netw orks has increased over the last five years at a CAGR of approximately 27.4% as indicated in the following table:

(in millions)

epay processing transactions per year

The loss of a high-volume, low-margin customer in the Middle East in 2017 contributed to a decline in processing transactions in 2017 and 2018.

The addition of a high-volume, low-margin market in India contributed to an overall increase in processing transactions in 2020.

Additional high-volume, low-margin digital media offerings in Asia contributed to an overall increase in processing transactions in 2020 and 2021.

epay Segment Strategy

12 unchanged sentences

No individual customer of our epay Segment makes up greater than 10% of total consolidated revenues.

e pay has a contract for the technology and distribution infrastructure for six state-owned lotteries in Germany.

In Germany, e pay has a contract for the technology and distribution infrastructure for six state-owned lotteries, it deploys Know Your Customer (or KYC) technologies on terminals indirectly owned by the Federal Republic of Germany and provides payment processing services for the state of Berlin and the city of Stuttgart, and Cadooz has a contract with Deutsche Bahn, which is majority owned by the German state .

In addition, epay has contracts with Transurban Limited, the largest manager of toll road networks in Australia, Cubic, supporting New South Wales Transport ticketing in Australia, and with New Zealand Transport Authority, which operates all toll roads in New Zealand.

In Germany, Cadooz has a contract with Deutsche Bahn, which is majority owned by the German state.

We also have a contract for the processing of mobile airtime with a Saudi company, which is majority owned by the Saudi government.

epay distributes mobile top up in post offices in the United Kingdom, which are owned by the government.

epay has contracts in the Middle East for the processing of mobile airtime for companies that are majority owned by the Saudi government and the UAE government, and epay distributes prepaid electronic content through companies that are owned by the Dubai government and Abu Dhabi government.

In India, the epay segment distributes prepaid content through the State Bank of India and distributes telecom airtime on behalf of Bharat Sanchar Nigam, a government owned telecommunications provider based in New Delhi.

There are no other government contracts in the epay Segment.

20 unchanged sentences

In addition, we provide global account-to-account money transfer services under the brand name xe.

We offer money transfer services via our websites (www.xe.com and https://transferxe.com) and through customer service representatives.

We offer money transfer services via our website (www.xe.com) and through customer service representatives.

xe also provides foreign currency exchange information on its currency data websites (www.xe.com and www.x-rates.com).

16 unchanged sentences

Money transfer products and services are sold primarily through three channels:

at agent locations, Company-owned stores and on internet enabled devices at riamoneytransfer.com, online.imeremit.com, xe.com, and https://transferxe.com (online transactions).

at agent locations, Company-owned stores and on internet enabled devices at riamoneytransfer.com and xe.com.

In an online transaction, customers send funds, using a bank account or credit or debit card, for pay-out at most of our agent locations around the world or directly to a bank account.

37 unchanged sentences

The Money Transfer Segment maintains correspondent relationships with a number of financial institutions whose ownership includes governments of the correspondents' countries of origin.

Those countries include Armenia, Austria , Bangladesh, Belarus , Belgium , Benin, Bhutan, Bolivia , Bosnia-Herzegovina, Botswana , Burkina Faso, Burundi, Cameroon , Cape Verde , Chad , China, Costa Rica, Cote d'Ivoire, Cuba , Djibouti, Dominican Republic, Ecuador, Egypt, El Salvador, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Guatemala, Guinea, Guinea - Bissau, Honduras, India, Indonesia , Italy , Jordan , Kenya, Kyrgyzstan, Laos , Liberia, Madagascar , Malaysia, Mali, Mauritania, Mauritius, Mexico, Moldova, Morocco, Myanmar, Niger, Nigeria, Pakistan, Philippines, Poland, Romania, Rwanda, Saudi Arabia, Serbia , Senegal, Sri Lanka, Suriname, Tanzania, Thailand, Togo , Tunisia, Turkey, Uganda, Ukraine, Uzbekistan , Vietnam, Yemen, Zambia, and Zimbabwe .

Those countries include Armenia, Austria , Bangladesh, Belarus , Belgium , Benin, Bhutan, Bolivia , Bosnia-Herzegovina, Botswana , Burkina Faso, Burundi, Cameroon , Cape Verde , Chad , Costa Rica, Cote d'Ivoire, Cuba , Djibouti, Dominican Republic, Ecuador, Egypt, El Salvador, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Guatemala, Guinea, Guinea - Bissau, Honduras, India, Indonesia , Italy , Jordan , Kenya, Kyrgyzstan, Laos , Liberia, Madagascar , Malaysia, Mali, Mauritania, Mauritius, Mexico, Moldova, Morocco, Myanmar, Niger, Nigeria, Pakistan, Philippines, Poland, Romania, Russia, Rwanda, Saudi Arabia, Serbia , Senegal, Sierra Leone, Sri Lanka, Suriname, Tanzania, Thailand, Togo , Tunisia, Turkey, Uganda, Ukraine, Uzbekistan , Vietnam, Yemen, Zambia, and Zimbabwe .

Our primary competitors in the money transfer and bill payment business include other large money transfer companies and electronic money transmitters, together with hundreds of smaller registered and unregistered money transmitters, as well as certain major national and regional banks, financial institutions and independent sales organizations.

31 unchanged sentences

Traditionally, we passported our U.K., German and Spanish payment services authorizations to several Member States.

As a result of Brexit, our U.K, payment institution is no longer capable of passporting its license in to the EEA and the relevant EEA business was transferred to our other licenses prior to the end of the Brexit transition period.

As a result of Brexit, our U.K, payment institution is no longer capable of passporting its license into the EEA and the relevant EEA business was transferred to our other licenses prior to the end of the Brexit transition period.

Additionally, in the U.K., we have obtained an e-money license.

17 unchanged sentences

federal, state and/or foreign anti-money laundering laws and regulations.

In summary, our Money Transfer Segment, as well as our agent network, is subject to regulations issued by the different state and foreign national regulators who license us, the Office of Foreign Assets Control ("OFAC"), the Bank Secrecy Act as amended by the USA PATRIOT ("BSA"), the Financial Crimes Enforcement Network ("FINCEN"), as well as any existing or future regulations that impact any aspect of our money transfer business.

In summary, our Money Transfer Segment, as well as our agent network, is subject to regulations issued by the different state and foreign national regulators who license us, the Office of Foreign Assets Control ("OFAC"), the Bank Secrecy Act as amended by the USA PATRIOT Act ("BSA"), the Financial Crimes Enforcement Network ("FINCEN"), as well as any existing or future regulations that impact any aspect of our money transfer business.

A similar s et of regulations applies to our money transfer businesses in most of the foreign countries in which we originate transactions.

37 unchanged sentences

In addition, the Securities and Exchange Commission ("SEC") requires strict compliance with certain accounting and internal control standards set forth under the FCPA.

Because our services are offered in many countries throughout the world, we face a higher risk associated with FCPA, the U.K.

Because our services are offered in many countries throughout the world and we do business with a number of banks and other financial institutions owned or controlled by foreign governments, we face a higher risk associated with FCPA, the U.K.

Bribery Act and other similar laws than many other companies and we have policies and procedures in place to address compliance with the FCPA, the U.K.

24 unchanged sentences

With respect to our epay Segment, we maintain registered trademarks for the "epay" brand and logo in the U.S., U.K., E.U.

(through a Community Trademark application, which provides enforceability of the epay trademark in all member states of the European Union), Brazil, Australia and New Zealand.

We have filed trademark applications for the “epay” brand in India and Singapore.

The trademark applications in both countries are still pending.

(through a Community Trademark application, which provides enforceability of the epay trademark in all member states of the European Union), Brazil, Singapore, India, Australia and New Zealand.

We have filed trademark applications for additional iterations of the "epay” brand in India, which are pending.

Additionally, we have filed a trademark application for the “epay” brand with the Madrid Protocol, which, if granted, will simplify the process to extending the international protection of the epay trademark.

47 unchanged sentences

Prior to this, he practiced corporate law with Stinson LLP and Shook, Hardy and Bacon LLP.

He is a member of the Missouri bar.

He is a member of the Kansas and Missouri bars.

He received a B.S.

41 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business