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As a result, the market price of our common stock could decline and you may lose all or part of your investment in our common stock.
−Removed: Risks Related to Our Business and Operations
−Removed: Our ability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our customers and cardholders, adversely affect our continued card network registration or membership and financial institution sponsorship, and may expose us to penalties, fines, liabilities and legal claims.
−Removed: In order to provide our services, we process and store sensitive business information and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses, and other types of personal information or sensitive business information.
+Added: Risks Related to Our Business Model and Operations Including the Use of Technology
+Added: Our ability to protect our systems and data from continually evolving cybersecurity risks or other technological risks could affect our reputation among our customers and cardholders, adversely affect our continued card network registration or membership and financial institution sponsorship, and expose us to penalties, fines, liabilities and legal claims.
+Added: In order to provide our services, we process and store sensitive business and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses, and other types of personal information or sensitive business information.
Some of this information is also processed and stored by financial institutions, merchants and other entities, as well as third-party service providers to whom we outsource certain functions and other agents, which we refer to collectively as our associated third parties.
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Computer viruses and other malware can be distributed and could infiltrate our systems or those of our associated third parties.
−Removed: In addition, denial of service or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities.
+Added: In addition, denial of service, ransomware or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities.
Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data.
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Any misuse or compromise of personal information or failure to adequately enforce these contractual requirements could result in liability, protracted and costly litigation and, with respect to misuse of personal information of our customers, lost revenue and reputational harm.
−Removed: Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective customers from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unanticipated or uninsured liability, disrupt our operations (including potential service interruptions), distract our management, increase our risk of litigation or regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws or by the card networks, and adversely affect our continued card network registration or membership and financial institution
+Added: Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated third party, could harm our reputation and deter existing and prospective customers from using our services or from making electronic payments generally, increase our operating expenses in order to contain and remediate the incident, expose us to unanticipated or uninsured liability, disrupt our operations (including potential service interruptions), distract our management, increase our risk of litigation or regulatory scrutiny, result in the imposition of penalties and fines under state, federal and foreign laws or by the card networks, and adversely affect our continued card network registration or membership
+Added: and financial institution sponsorship.
Our removal from networks' lists of Payment Card Industry Data Security Standard compliant service providers could mean that existing customers, sales partners or other third parties may cease using or referring our services.
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In addition, the card networks could refuse to allow us to process through their networks.
+Added: We may experience software defects, undetected errors, and development delays, which could damage customer relations, decrease our potential profitability and expose us to liability.
+Added: Our services are based on software and computing systems that often encounter development delays, and the underlying software may contain undetected errors, viruses or defects.
+Added: Defects in our software services and errors or delays in our processing of electronic transactions could result in additional development costs, diversion of technical and other resources from our other development efforts, loss of credibility with current or potential customers, harm to our reputation and exposure to liability claims.
+Added: In addition, we rely on technologies and software supplied by third parties that may also contain undetected errors, viruses or defects that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: Our systems or our third-party providers' systems may fail, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
+Added: We depend on the efficient and uninterrupted operation of our computer systems, software, data centers and telecommunications networks, as well as the systems and services of third parties.
+Added: A system outage or data loss could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: Not only could we suffer damage to our reputation in the event of a system outage or data loss, but we may also be liable to third parties.
+Added: Many of our contractual agreements with financial institutions and certain other customers require the payment of penalties if we do not meet certain operating standards.
+Added: Our systems and operations or those of our third-party providers could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, terrorist acts, war, unauthorized entry, human error, and computer viruses or other defects.
+Added: Defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, or other difficulties (including those related to system relocation) could result in loss of revenues, loss of customers, loss of merchant and cardholder data, harm to our business or reputation, exposure to fraud losses or other liabilities, negative publicity, additional operating and development costs, fines and other sanctions imposed by card networks, and/or diversion of technical and other resources.
The payments technology industry is highly competitive, and some of our competitors are larger and have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new technologies.
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These financial institutions may also provide payment processing services to merchants at a loss in order to generate banking fees from the merchants.
−Removed: It is also possible that larger financial institutions could decide to perform in-house some or all of the services that we currently provide or could provide.
+Added: It is also possible that larger financial institutions, including some who are customers of ours, could decide to perform in-house some or all of the services that we currently provide or could provide.
These attributes may provide them with a competitive advantage in the market.
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We also face strong price competition.
−Removed: To stay competitive, we may have to increase the incentives that we offer to our distributors and reduce the prices of our services, which could adversely affect our financial position, operating results or cash flows.
+Added: To stay competitive, we may have to increase the incentives that we offer to our distributors and reduce the prices of our services, which could adversely affect our financial position, operating results and cash flows.
Furthermore, we are facing increasing competition from nontraditional competitors, including new entrant technology companies who offer certain innovations in payment methods.
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In addition, some nontraditional competitors, such as private companies or startup companies, may be less risk averse than we are and, therefore, may be able to respond more quickly to market demands.
−Removed: If these nontraditional competitors gain a greater share of total electronic payments transactions, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These competitors may compete in ways that minimize or remove the role of traditional card networks, acquirers, issuers and processors in the electronic payments process.
+Added: If these nontraditional competitors gain a greater share of total electronic payments transactions, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In order to remain competitive and to continue to increase our revenues and earnings, we must continually and quickly update our services, a process that could result in higher costs and the loss of revenues, earnings and customers if the new services do not perform as intended or are not accepted in the marketplace.
The payments technology industry in which we compete is characterized by rapid technological change, new product introductions, evolving industry standards and changing customer needs.
−Removed: In order to remain competitive, we are continually involved in a number of projects, including the development of a new authorization platform, mobile payment applications, ecommerce services and other new offerings emerging in the payments technology industry.
+Added: In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, mobile payment applications, ecommerce services and other new offerings emerging in the payments technology industry.
These projects carry the risks associated with any development effort, including cost overruns, delays in delivery and performance problems.
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Any failure to deliver an effective and secure product or any performance issue that arises with a new product or service could result in significant processing or reporting errors or other losses.
−Removed: As a result of these factors, our development efforts could result in higher costs that could reduce our earnings in addition to a loss of revenues and earnings if promised new services are not delivered timely to our customers or do not perform as anticipated.
We rely in part on third parties, including some of our competitors and potential competitors, for the development of and access to new technologies.
−Removed: Our revenues from the sale of services to merchants that accept Visa cards and Mastercard cards are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
+Added: As a result of these factors, our development efforts could result in higher costs that could reduce our earnings in addition to a loss of revenues and earnings if promised new services are not delivered timely to our customers or do not perform as anticipated.
+Added: Our revenues from the sale of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.
In order to provide our Visa and Mastercard transaction processing services, we must be either a direct member or be registered as a merchant processor or service provider of Visa and Mastercard, respectively.
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The termination of our registration, or any changes in the Visa or Mastercard rules that would impair our registration, could require us to stop providing Visa and Mastercard payment processing services, which would make it impossible for us to conduct our business on its current scale.
−Removed: The rules of the card networks are set by their boards, which may be influenced by card issuers, and some of those issuers also provide acquiring services and are our competitors or our customers in both the Merchant Solutions and Issuer Solutions segments.
+Added: The rules of the card networks may be influenced by card issuers, and some of those issuers also provide acquiring services and are our competitors or our customers in both the Merchant Solutions and Issuer Solutions segments.
If we fail to comply with the applicable requirements of the card networks, the card networks could seek to fine us, suspend us or terminate our registrations or membership.
−Removed: The termination of our registrations or our membership or our status as a service provider or a merchant processor, or any changes in card association or other network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to our customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: If a merchant or an ISO fails to comply with the applicable requirements of the card associations and networks, we or the merchant or ISO could be subject to a variety of fines or penalties that may be levied by the card associations or networks.
+Added: The termination of our registrations or our membership or our status as a service provider or a merchant processor, or any changes in card association or other network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to our customers, could have a material adverse effect on our business, financial
+Added: condition, results of operations and cash flows.
+Added: If a merchant or an ISO customer fails to comply with the applicable requirements of the card associations and networks, we or the merchant or ISO could be subject to a variety of fines or penalties that may be levied by the card associations or networks.
If we cannot collect or pursue collection of such amounts from the applicable merchant or ISO, we may have to bear the cost of such fines or penalties, resulting in lower earnings for us.
Our Business and Consumer Solutions segment relies on certain relationships with issuing banks, distributors, marketers and brand partners.
−Removed: The loss of such relationships, or if we are unable to maintain such relationships on terms that are favorable to us, may materially adversely affect our business, financial position, operating results or cash flows.
+Added: The loss of such relationships, or if we are unable to maintain such relationships on terms that are favorable to us, may materially adversely affect our business, financial position, operating results and cash flows.
Our Business and Consumer Solutions segment relies on arrangements that we have with issuing banks to provide us with critical products and services, including the FDIC-insured depository accounts tied to the cards and accounts we manage, access to the ATM networks, membership in the card associations and network organizations and other banking services.
The majority of our active Business and Consumer Solutions cards and accounts are issued or opened through Meta Payment Systems ("MetaBank").
−Removed: If any material adverse event were to affect MetaBank's or another of our critical issuing banks, or we were to lose MetaBank or another critical bank, or MetaBank or another critical bank grew to a size such that it was no longer able to avail itself of certain regulatory exemptions for small banks, we would be forced to find an alternative provider for these critical banking services.
+Added: If any material adverse event were to affect MetaBank's or another of our critical issuing banks, or we were to lose MetaBank or another critical bank, or MetaBank or another critical bank grew to a size such that it was no longer able to avail itself of certain regulatory exemptions for small banks, we may be forced to find an alternative provider for these critical banking services.
It may not be possible to find a replacement bank on terms that are acceptable to us or at all.
−Removed: Any change in the issuing banks could disrupt the business or result in arrangements with new banks that are less favorable to us than those we have with our existing issuing banks, either of which could have a material adverse impact on our business, financial position, operating results or cash flows.
+Added: Any change in the issuing banks could disrupt the business or result in arrangements with new banks that are less favorable to us than those we have with our existing issuing banks, either of which could have a material adverse effect on our business, financial position, operating results and cash flows.
Furthermore, our Business and Consumer Solutions segment depends in large part on establishing agreements with distributors, marketers and brand partners, primarily alternative financial services providers, as well as grocery and convenience stores and other traditional retailers.
Some of these companies may endeavor to internally develop their own programs or enter into exclusive relationships with our competitors to distribute or market their products.
−Removed: The loss of, or a substantial decrease in revenues from, one or more of our top distributors, marketers or brand partners could have a material adverse effect on our business, financial position, operating results or cash flows.
+Added: The loss of, or a substantial decrease in revenues from, one or more of our top distributors, marketers or brand partners could have a material adverse effect on our business, financial position, operating results and cash flows.
We rely on various financial institutions to provide clearing services in connection with our settlement activities.
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We rely on various financial institutions to provide clearing services in connection with our settlement activities.
−Removed: If such financial institutions should stop providing clearing services, we must find other financial institutions to provide those services.
−Removed: If we are unable to find a replacement financial institution we may no longer be able to provide processing services to certain customers, which could negatively affect our financial position, results of operations or cash flows.
−Removed: Our systems or our third-party providers' systems may fail, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.
−Removed: We depend on the efficient and uninterrupted operation of our computer systems, software, data centers and telecommunications networks, as well as the systems and services of third parties.
−Removed: A system outage or data loss could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: Not only would we suffer damage to our reputation in the event of a system outage or data loss, but we may also be liable to third parties.
−Removed: Many of our contractual agreements with financial institutions require the payment of penalties if we do not meet certain operating standards.
−Removed: Our systems and operations or those of our third-party providers could be exposed to damage or interruption from, among other things, fire, natural disaster, power loss, telecommunications failure, terrorist acts, war, unauthorized entry, human error, and computer viruses or other defects.
−Removed: Defects in our systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures, or other difficulties (including those related to system relocation) could result in loss of revenues, loss of customers, loss of merchant and cardholder data, harm to our business or reputation, exposure to fraud losses or other liabilities, negative publicity, additional operating and development costs, fines and other sanctions imposed by card networks, and/or diversion of technical and other resources.
−Removed: We may experience software defects, undetected errors, and development delays, which could damage customer relations, decrease our potential profitability and expose us to liability.
−Removed: Our services are based on software and computing systems that often encounter development delays, and the underlying software may contain undetected errors, viruses or defects.
−Removed: Defects in our software services and errors or delays in our processing of electronic transactions could result in additional development costs, diversion of technical and other resources from our other development efforts, loss of credibility with current or potential customers, harm to our reputation and exposure to liability claims.
−Removed: In addition, we rely on technologies and software supplied by third parties that may also contain undetected errors, viruses or defects that could have a material adverse effect on our business, financial condition, results of operations or cash flows.
+Added: If such financial institutions should stop providing clearing services, we would have to find other financial institutions to provide those services.
+Added: If we were unable to find a replacement financial institution we may no longer be able to provide processing services to certain customers, which could negatively affect our financial position, results of operations and cash flows.
Increased merchant, referral partner or ISO attrition could cause our financial results to decline.
We experience attrition in merchant credit and debit card processing volume resulting from several factors, including business closures, transfers of merchants accounts to our competitors, unsuccessful contract renewal negotiations and account closures that we initiate for various reasons, such as heightened credit risks or contract breaches by merchants.
−Removed: If an ISO partner switches to another transaction processor, terminates our services, internalizes payment processing functions that we perform, merges with or is acquired by one of our competitors, or shuts down or becomes insolvent, we may no longer receive new merchant referrals from the ISO, and we risk losing existing merchants that were originally enrolled by the ISO.
−Removed: We cannot predict the level of attrition in the future and it could increase.
Our referral partners are a significant source of new business.
−Removed: Higher than expected attrition could negatively affect our results, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.
+Added: If a referral partner or an ISO switches to another transaction processor, terminates our services, internalizes payment processing functions that we perform, merges with or is acquired by one of our competitors, or shuts down or becomes insolvent, we may no longer receive new merchant referrals from such referral partner, and we risk losing existing merchants that were originally enrolled by the referral partner or ISO.
+Added: We cannot predict the level of attrition in the future and it could increase.
+Added: Higher than expected attrition could negatively affect our results, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of new markets, and the continued availability of alliance relationships and strategic acquisition opportunities.
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As part of our strategy to achieve this expansion, we look for acquisition opportunities, investments and alliance relationships with other businesses that will allow us to increase our market penetration, technological capabilities, product offerings and distribution capabilities.
−Removed: We may not be able to successfully identify suitable acquisition, investment and alliance candidates in the future, and if we do, they may not provide us with the value and benefits we anticipate.
+Added: We may not be able to successfully identify suitable
+Added: acquisition, investment and alliance candidates in the future, and if we do, they may not provide us with the value and benefits we anticipate.
Our expansion into new markets is also dependent upon our ability to apply our existing technology or to develop new applications to meet the particular service needs of each new market.
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If we fail to expand into new and existing markets for payment technology and software solutions, we may not be able to continue to grow our revenues and earnings.
+Added: Our ability to acquire other businesses or technologies, make strategic investments or integrate acquired businesses effectively may also be impaired by the effects of the COVID-19 pandemic, government actions in light of the pandemic, trade tensions and increased global scrutiny of foreign investments.
+Added: For example, a number of countries, including the U.S.
+Added: and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions on foreign investments.
+Added: Governments may continue to adopt or tighten restrictions of this nature, and such restrictions could negatively affect our business and financial results.
+Added: Further, our future success will depend, in part, upon our ability to manage our expanded business, which could pose substantial challenges for our management, including challenges related to the management and monitoring of new operations and associated costs and complexity.
+Added: We may also face increased scrutiny from governmental authorities as a result of increasing the size of our business.
There may be a decline in the use of cards and other electronic payments as a payment mechanism for consumers or other adverse developments with respect to the card industry in general.
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In each case, our business, financial condition, results of operations and cash flows may be adversely affected.
−Removed: We believe future growth in the use of credit, debit and GPR prepaid debit cards and other electronic payments will be driven by the cost, ease-of-use, and quality of services offered to consumers and businesses.
−Removed: In order to consistently increase and maintain our profitability, consumers and businesses must continue to use electronic payment methods that we process, including credit, debit and GPR prepaid debit cards.
−Removed: Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers could materially affect our financial position, results of operation or cash flows.
−Removed: Our Issuer Solutions segment has many long-term customer contracts with card issuers.
+Added: Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could materially affect our financial position, results of operation and cash flows.
Consolidation among financial institutions, particularly in the area of credit card operations, and consolidation in the retail industry, is a risk that could negatively affect our existing agreements and future revenues with these customers.
−Removed: In addition, consolidation among financial institutions has led to an increasingly concentrated customer base, which results in a changing customer mix toward larger customers.
+Added: In addition, consolidation among financial institutions has led to an increasingly concentrated customer base, which results in a changing mix toward larger customers.
Continued consolidation among financial institutions could increase the bargaining power of our current and future customers and further increase our customer concentration.
−Removed: Consolidation among financial institutions and retail customers and the resulting loss of any significant customer by us could have a material adverse effect on our financial position, results of operations or cash flows.
+Added: Consolidation among financial institutions and retail customers and the resulting loss of any significant number of customers by us could have a material adverse effect on our financial position, results of operations and cash flows.
If we do not renew or renegotiate our agreements on favorable terms with our customers within the Issuer Solutions segment, our business will suffer.
−Removed: A significant amount of our Issuer Solutions segment revenues is derived from long-term contracts with large customers.
−Removed: The financial position of these customers and their willingness to pay for our products and services are affected by general market positions, competitive pressures and operating margins within their industries.
+Added: The timing of the conversions or deconversions of card portfolio may also affect our revenues and expenses.
+Added: A significant amount of our Issuer Solutions segment revenues is derived from long-term contracts with large financial institutions and other financial service providers.
+Added: The financial position of these customers and their willingness to pay for our services are affected by general market positions, competitive pressures and operating margins within their industries.
When our long-term contracts expire, the time of renewal or renegotiation presents our customers with the opportunity to consider other providers, transition all or a portion of the services we provide in-house or seek lower rates for our services.
−Removed: The loss of our contracts with existing customers or renegotiation of contracts at reduced rates or reduced service levels could have a material adverse effect on our financial position, results of operation or cash flows.
−Removed: In addition, the timing of the conversion of card portfolios of new payment processing customers to our processing systems and the deconversion of existing customers to other systems impacts our revenues and expenses.
+Added: Additionally, as we modernize the technology platform we use to deliver services, some Issuer Solutions customers may not be agreeable to our modernization effort, and may choose to end their contracts prematurely, or not renew their contracts, as a result.
+Added: The loss of our contracts with existing customers or renegotiation of contracts at reduced rates or reduced service levels could have a material adverse effect on our financial position, results of operations and cash flows.
+Added: In addition, the timing of the conversion of card portfolios of new payment processing customers to our processing systems and the deconversion of existing customers to other systems affects our revenues and expenses.
Due to a variety of factors, conversions and deconversions may not occur as scheduled and this may have a material adverse effect on our financial position and results of operations.
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If we are unable to collect such amounts from the merchant's account or reserve account (if applicable), or if the merchant refuses or is unable, due to closure, bankruptcy or other reasons, to reimburse us for a chargeback, we bear the loss for the amount of the refund paid to the cardholder.
−Removed: The risk of chargebacks is typically greater with those merchants that promise future delivery of goods and services rather than
−Removed: delivering goods or rendering services at the time of payment.
+Added: The risk of chargebacks is typically greater with those merchants that promise future delivery of goods and services rather than delivering goods or rendering services at the time of payment.
We may experience significant losses from chargebacks in the future.
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Increases in chargebacks or other liabilities could have a material adverse effect on our financial condition, results of operations and cash flows.
−Removed: We are subject to economic and geopolitical risk, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could negatively affect our business, financial condition, results of operations and cash flows.
−Removed: The global payments technology industry depends heavily on the overall level of consumer, business and government spending.
−Removed: We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income and changes in consumer purchasing habits.
−Removed: A sustained deterioration in general economic conditions in the markets in which we operate or increases in interest rates may adversely affect our financial performance by reducing the number or average purchase amount of transactions made using electronic payments.
−Removed: A reduction in the amount of consumer spending could result in a decrease in our revenues and profits.
−Removed: If our merchants make fewer sales to consumers using electronic payments or consumers using electronic payments spend less per transaction, we will have fewer transactions to process or lower transaction amounts, each of which would contribute to lower revenues.
−Removed: Additionally, credit card issuers may reduce credit limits and become more selective in their card issuance practices.
−Removed: Any of these developments could have a material adverse impact on our financial position and results of operations.
−Removed: A downturn in the economy could force retailers to close or file bankruptcy, resulting in lower revenue and earnings for us and greater exposure to potential credit losses and future transaction declines.
−Removed: We also have a certain amount of fixed and other costs, including rent, debt service, and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy.
−Removed: Changes in economic conditions could also adversely affect our future revenues and profits and cause a materially adverse effect on our business, financial condition, results of operations or cash flows.
−Removed: Reject losses arise from the fact that, in most markets, we collect our fees from our merchants on the first day after the monthly billing period.
−Removed: This results in the build-up of a substantial receivable from our customers.
−Removed: If a merchant has gone out of business during the billing period, we may be unable to collect such fees, which could negatively affect our business, financial condition, results of operations or cash flows.
−Removed: In addition, our business, growth, financial condition or results of operations could be materially adversely affected by instability or changes in a country’s or region’s economic conditions;
−Removed: changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise;
−Removed: increased difficulty of conducting business in a country or region due to actual or potential political or military conflict;
−Removed: or action by the United States or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities, such as sanctions by or against the Russian Federation.
−Removed: A possible slowdown in global trade caused by increasing tariffs or other restrictions could decrease consumer or corporate confidence and reduce consumer, government and corporate spending in countries inside or outside the United States, which could adversely affect our operations.
−Removed: The referendum in the United Kingdom in favor of the United Kingdom leaving the European Union, commonly referred to as "Brexit," has caused, and may continue to cause, economic uncertainty, including volatility in global stock markets and currency exchange fluctuations, which may adversely affect the profitability of our U.K.
−Removed: In addition, Brexit could lead to increased regulatory complexities, including, without limitation, regulation relating to data security, privacy and taxation.
−Removed: On January 31, 2020, the United Kingdom ceased to be a member state of the European Union.
−Removed: As a result of its exit from the E.U., the U.K.
−Removed: lost access to the E.U.
−Removed: single market and to E.U.
−Removed: trade deals negotiated with other jurisdictions at that time, so the long-term effects of Brexit will depend on the agreements or arrangements with the European Union for the United Kingdom to retain
−Removed: access to E.U.
−Removed: markets either during a transitional period or more permanently.
−Removed: Consequently, no assurance can be given about the effect of the outcome on our U.K.
−Removed: business and its financial conditions, results of operations and cash flows may be adversely affected.
+Added: Additionally, COVID-19 has negatively affected the financial viability and operations of certain merchants.
+Added: These consolidated financial statements reflect management’s estimates and assumptions related to allowances for transaction and credit losses utilizing the most currently available information.
+Added: The future magnitude, duration and effects of the COVID-19 pandemic are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets.
+Added: Actual losses could differ materially from those estimates.
Increases in card network fees may result in the loss of customers and/or a reduction in our earnings.
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We could attempt to pass these increases along to our merchant customers, but this strategy might result in the loss of customers to our competitors who may not pass along the increases, thereby reducing our revenues and earnings.
−Removed: If competitive practices prevent us from passing along the higher fees to our merchant customers in the future, we may have to absorb all or a portion of such increases, thereby increase our operating costs and reducing our earnings.
+Added: If competitive practices prevent us from passing along the higher fees to our merchant customers in the future, we may have to absorb all or a portion of such increases, thereby reducing our earnings.
+Added: The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies of operating these businesses as one are not achieved, a loss of strategic opportunities if management is distracted by the integration process, and a loss of customers if our service levels drop during or following the integration process.
+Added: The acquisition, integration, and conversion of businesses and the formation or operation of alliances, such as the Merger or joint ventures and other partnering arrangements, involve a number of risks.
+Added: Core risks are in the area of valuation (negotiating a fair price for the business based on sometimes limited diligence) and integration and conversion (managing the complex process of integrating the acquired company's people, services, information security and technology and other assets to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition).
+Added: In addition, international acquisitions and alliances often involve additional or increased risks, including, for example:
+Added: managing geographically separated organizations, systems, and facilities;
+Added: integrating personnel with diverse business backgrounds and organizational cultures;
+Added: complying with foreign regulatory requirements;
+Added: fluctuations in currency exchange rates;
+Added: enforcement of intellectual property rights in some foreign countries;
+Added: difficulty entering new foreign markets due to,
+Added: among other things, customer acceptance and business knowledge of those new markets;
+Added: and general economic and political conditions.
+Added: If the integration and conversion process does not proceed smoothly, the following factors, among others, could reduce our revenues and earnings, increase our operating costs, and result in us not achieving projected synergies:
+Added: • If we are unable to successfully integrate the benefits plans, duties and responsibilities, and other factors of interest to the management and employees of the acquired business, we could lose employees to our competitors in the region, which could significantly affect our ability to operate the business and complete the integration;
+Added: • If the integration process causes any delays with the delivery of our services, or the quality of those services, we could lose customers to our competitors;
+Added: • The acquisition may otherwise cause disruption to the acquired company’s business and operations and relationships with financial institution sponsors, customers, merchants, employees and other partners;
+Added: • The acquisition and the related integration could divert the attention of our management from other strategic matters including possible acquisitions and alliances and planning for new product development or expansion into new markets for payments technology and software solutions;
+Added: • The costs related to the integration of the acquired company’s business and operations into ours may be greater than anticipated.
+Added: Legal, Regulatory Compliance and Tax Risks
+Added: Our business is subject to government regulation and oversight.
Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development efforts or have an unfavorable effect on our financial results and our cash flows.
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Failure to comply with regulations or guidelines may result in the suspension or revocation of a license or registration, the limitation, suspension or termination of service, and the imposition of civil and criminal penalties, including fines, or may cause customers or potential customers to be reluctant to do business with us, any of which could have an adverse effect on our financial condition.
−Removed: For example, we are subject to applicable privacy and information security regulations in the regions where we operate;
−Removed: the Payment Services Directive in Europe;
−Removed: The Code of Conduct for the Credit and Debit Card Industry in Canada (issued by Canada's Department of Finance);
−Removed: the Housing Assistance Tax Act of 2008 in the United States;
−Removed: HIPAA and other health privacy regulations and a myriad of U.S.
−Removed: federal and state consumer protection laws and state escheat regulations.
−Removed: In addition, the U.K.
−Removed: Payment Systems Regulator is conducting a market review of the card acquiring industry.
−Removed: We are also subject to examination by the FFIEC as a result of our provision of data processing services to financial institutions.
Interchange fees are subject to intense legal, regulatory and legislative scrutiny worldwide.
−Removed: For instance, the Dodd-Frank Act restricts the amounts of debit card fees that certain issuing institutions can charge merchants and allowing merchants to set minimum amounts for the acceptance of credit cards and to offer discounts for different payment methods.
+Added: For instance, the Dodd-Frank Act restricts the amounts of debit card fees that certain issuing institutions can charge merchants and allows merchants to set minimum amounts for the acceptance of credit cards and to offer discounts for different payment methods.
These types of restrictions could negatively affect the number of debit transactions, which would adversely affect our business.
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More generally, all persons engaged in commerce, including, but not limited to, us and our merchant and financial institution customers, are also subject to Section 5 of the Federal Trade Commission ("FTC") Act prohibiting unfair or deceptive acts or practices ("UDAP").
−Removed: In addition, there are other laws, rules and or regulations, including the Telemarketing Sales Act, that may directly impact us or the activities of our merchant customers and in some cases may subject us to investigations, fees, fines and disgorgement of funds in the event we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal activities of the merchant through our payment processing services.
−Removed: Various federal and state regulatory enforcement agencies, including the FTC, the CFPB and the states’ attorneys general have the authority to take action against nonbanks that engage in UDAP or violate other laws, rules or regulations and, to the extent we are processing payments for a merchant that may be in violation of these laws, rules or regulations, we may be subject to enforcement actions and as a result may incur losses and liabilities.
+Added: In addition, there are other laws, rules and or regulations, including the Telemarketing Sales Act, that may directly affect us or the activities of our merchant customers and in some cases may subject us to investigations, fees, fines and disgorgement of funds in the event we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal activities of the merchant through our payment processing services.
+Added: Various federal and state regulatory enforcement agencies, including the FTC, the CFPB and the states’ attorneys general have the authority to take action against nonbanks that engage in UDAP or violate other laws, rules or regulations and, to the extent we are in violation of these laws, rules or
+Added: regulations or processing payments for a merchant that may be in violation of these laws, rules or regulations, we may be subject to enforcement actions and as a result may incur losses and liabilities.
In many countries, we are legally or contractually required to comply with the anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act and similar laws of other countries, which require that customer identifying information be obtained and verified.
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We are also subject to a variety of foreign and domestic laws, and their implementing regulations, which establish requirements for the collection, processing, storage, use and disclosure of personal information, require notice to individuals of privacy practices, and provide individuals with certain rights to prevent use and disclosure of protected information.
−Removed: Regulatory authorities around the world are considering or have enacted a number of legislative and regulatory proposals concerning data privacy and use, including the E.U.
−Removed: General Data Protection Regulation and the California Consumer Protection Act, and the interpretation and application of consumer and data protection laws is increasingly uncertain.
+Added: For example, we are subject to applicable privacy and information security regulations in the regions where we operate;
+Added: the Payment Services Directive in Europe;
+Added: General Data Protection Regulation;
+Added: The Code of Conduct for the Credit and Debit Card Industry in Canada (issued by Canada's Department of Finance);
+Added: the California Consumer Protection Act;
+Added: the Housing Assistance Tax Act of 2008 in the United States;
+Added: HIPAA and other health privacy regulations and a myriad of U.S.
+Added: federal and state consumer protection laws and state escheat regulations.
+Added: In addition, the U.K.
+Added: Payment Systems Regulator has increased its oversight of the card acquiring industry.
+Added: We are also subject to examination by the FFIEC as a result of our provision of data processing services to financial institutions.
It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data privacy practices or operations model, which could result in potential liability for fines, damages or a need to incur substantial costs to modify our operations.
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However, there is a risk that a federal or state regulator will take a contrary position and initiate enforcement or other proceedings against a distributor, us, our issuing banks or our other service providers.
−Removed: If we are unsuccessful in making a persuasive argument that a distributor should not be subject to such licensing requirements and it is therefore deemed to be in violation of one or more of the state money transmitter statutes, it could result in the imposition of fines, the suspension of the distributor’s ability to offer some or all of our products and related services in the relevant jurisdiction, civil liability and criminal liability, each of which could negatively impact our financial position and results of operations.
−Removed: Furthermore, if the federal government or one or more state governments impose additional legislative or regulatory requirements on our Business and Consumer Solutions segment, the issuing banks or the distributors, or prohibit or limit the activities of our Business and Consumer Solutions segment as currently conducted, we may be required to modify or terminate some or all of our Business and Consumer Solutions products and services offered in the relevant jurisdiction or certain of the issuing banks may terminate their relationship with us.
−Removed: Moreover, as a number of our Business and Consumer Solutions distributors are engaged in offering payday, title and/or installment loans, current and future legislative and regulatory restrictions that negatively impact their ability to continue their operations could have a corresponding negative impact on our revenue and earnings from these relationships, potentially resulting in a significant decline in revenue from the Business and Consumer Solutions segment.
+Added: If we are unsuccessful in making a persuasive argument that a distributor should not be subject to such licensing requirements and it is therefore deemed to be in violation of one or more of the state money transmitter statutes, it could result in the imposition of fines, the suspension of the distributor’s ability to offer some or all of our related services in the relevant jurisdiction, civil liability and criminal liability, each of which could negatively affect our financial position and results of operations.
+Added: Furthermore, if the federal government or one or more state governments impose additional legislative or regulatory requirements on our Business and Consumer Solutions segment, the issuing banks or the distributors, or prohibit or limit the activities of our Business and Consumer Solutions segment as currently conducted, we may be required to modify or terminate some or all of our Business and Consumer Solutions services offered in the relevant jurisdiction or certain of the issuing banks may terminate their relationship with us.
+Added: Moreover, as a number of our Business and Consumer Solutions distributors are engaged in offering payday, title and/or installment loans, current and future legislative and regulatory restrictions that negatively affect their ability to continue their operations could have a corresponding negative effect on our revenue and earnings from these relationships, potentially resulting in a significant decline in revenue from the Business and Consumer Solutions segment.
Changes to legal rules and regulations, or interpretation or enforcement thereof, even if not directed at us, may require significant efforts to change our systems and services and may require changes to how we price our services to customers, adversely affecting our business.
Even an inadvertent failure to comply with laws and regulations, as well as rapidly evolving social expectations of corporate fairness, could damage our business or our reputation.
−Removed: Furthermore, we are subject to tax laws in each jurisdiction where we conduct business.
−Removed: Changes in such laws or their interpretations could decrease the value of revenues we receive, the value of tax losses and tax credit carry forwards recorded on our balance sheet and have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: New or revised tax regulations, unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense.
+Added: Changes in tax laws or their interpretations could result in changes to enacted tax rates and may require complex computations to be performed that were not previously required, significant judgments to be made in interpretation of the new or revised tax regulations and significant estimates in calculations, as well as the preparation and analysis of information not previously relevant or regularly produced.
+Added: Future changes in enacted tax rates could negatively affect our results of operations.
+Added: Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities.
+Added: An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively affecting our results of operations and cash flows.
+Added: We have recognized estimated liabilities on the balance sheet for material known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item.
+Added: These liabilities reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.
+Added: While we believe that the liabilities are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be finally resolved at a financial amount no more than any related liability.
+Added: An unfavorable resolution, therefore, could negatively affect our financial position, results of operations and cash flows in the current and/or future periods.
+Added: Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk.
+Added: We operate in a rapidly changing industry.
+Added: Accordingly, our risk management policies and procedures may not be fully effective to identify, monitor and manage our risks.
+Added: If our policies and procedures are not fully effective or if we are not always successful in identifying and mitigating all risks to which we are or may be exposed, we may suffer uninsured liability, harm to our reputation or be subject to litigation or regulatory actions that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: Financial Risks
We are subject to risks associated with changes in interest rates or currency exchange rates, which could adversely affect our business, financial position, results of operations and cash flows, and we may not effectively hedge against these risks.
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A downgrade in the ratings of our debt could restrict our ability to access the debt capital markets and increase our interest costs.
−Removed: In connection with the Merger, we achieved an investment grade debt structure.
+Added: We currently maintain investment credit ratings with Moody's Investors Service and Standard & Poor's Ratings Services.
Unfavorable changes in the ratings that rating agencies assign to our debt may ultimately negatively affect our access to the debt capital markets and increase the costs we incur to borrow funds.
−Removed: If ratings for our debt fall below investment grade, our access to the capital markets could become restricted.
+Added: If ratings for our debt fall below investment grade, our access to the capital markets could become restricted and our relationships with certain customers of our Issuer Solutions segment could also be affected.
Future tightening in the credit markets and a reduced level of liquidity in many financial markets due to turmoil in the financial and banking industries could affect our access to the debt capital markets or the price we pay to issue debt.
Additionally, our credit facilities include an increase in interest rates if the ratings for our debt are downgraded.
−Removed: Changes in the method for determining the London Interbank Offered Rate ("LIBOR") and the potential replacement of the LIBOR benchmark interest rate could adversely affect our business, financial condition, results of operations and cash flows.
+Added: The alteration or replacement of the London Interbank Offered Rate ("LIBOR") benchmark interest rate could adversely affect our business, financial condition, results of operations and cash flows.
A portion of our current indebtedness bears interest at a variable rate based on LIBOR, and we may incur additional variable indebtedness based on LIBOR.
2 unchanged sentences
The FCA has indicated they will support the LIBOR indices through 2021, to allow for an orderly transition to an alternative reference rate.
+Added: It is possible that the ICE Benchmark Administration Limited (formerly NYSE Euronext Rate Administration Limited) and the panel banks which contribute to LIBOR could continue to produce LIBOR on the current basis after 2021.
+Added: The ICE Benchmark Administration Limited recently announced that it will consult on its intention to extend the publication of most tenors LIBOR to June 30, 2023.
The Alternative Reference Rates Committee has proposed the Secured Overnight Financing Rate ("SOFR") as its recommended alternative to LIBOR, and the Federal Reserve Bank of New York began publishing SOFR rates in April 2018.
−Removed: SOFR is intended to be a broad measure of the cost of borrowing cash overnight collateralized by U.S.
−Removed: Treasury securities.
−Removed: We are evaluating the potential effect of the eventual replacement of the LIBOR benchmark interest rate, including the possibility of SOFR as the dominant replacement.
−Removed: The market transition away from LIBOR and towards SOFR is expected to be gradual and complicated, including the development of term and credit adjustments to accommodate differences between LIBOR and SOFR.
−Removed: Introduction of an alternative rate also may introduce additional basis risk for market participants as an alternative index is utilized along with LIBOR.
−Removed: There can be no guarantee that SOFR will become widely used and that alternatives may or may not be developed with additional complications.
−Removed: We are not able to predict whether LIBOR will cease to be available after 2021, whether SOFR will become a widely accepted benchmark in place of LIBOR, or what the effect of such a possible transition to SOFR may be on our business, financial condition, results of operations or cash flows.
−Removed: The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies of operating these businesses as one are not achieved, a loss of strategic opportunities if management is distracted by the integration process, and a loss of customers if our service levels drop during or following the integration process.
−Removed: The acquisition, integration, and conversion of businesses and the formation or operation of alliances, such as joint ventures and other partnering arrangements involve a number of risks.
−Removed: Core risks are in the area of valuation (negotiating a fair price for the business based on inherently limited diligence) and integration and conversion (managing the complex process of integrating the acquired company's people, services, information security and technology and other assets to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition).
−Removed: In addition, international acquisitions and alliances often involve additional or increased risks including, for example:
−Removed: managing geographically separated organizations, systems, and facilities;
−Removed: integrating personnel with diverse business backgrounds and organizational cultures;
−Removed: complying with foreign regulatory requirements;
−Removed: fluctuations in currency exchange rates;
−Removed: enforcement of intellectual property rights in some foreign countries;
−Removed: difficulty entering new foreign markets due to, among other things, customer acceptance and business knowledge of those new markets;
−Removed: and general economic and political conditions.
−Removed: If the integration and conversion process does not proceed smoothly, the following factors, among others, could reduce our revenues and earnings, increase our operating costs, and result in us not achieving projected synergies:
−Removed: If we are unable to successfully integrate the benefits plans, duties and responsibilities, and other factors of interest to the management and employees of the acquired business, we could lose employees to our competitors in the region, which could significantly affect our ability to operate the business and complete the integration;
−Removed: If the integration process causes any delays with the delivery of our services, or the quality of those services, we could lose customers to our competitors;
−Removed: The acquisition may otherwise cause disruption to the acquired company’s business and operations and relationships with financial institution sponsors, customers, merchants, employees and other partners;
−Removed: The acquisition and the related integration could divert the attention of our management from other strategic matters including possible acquisitions and alliances and planning for new product development or expansion into new markets for payments technology and software solutions;
−Removed: The costs related to the integration of the acquired company’s business and operations into ours may be greater than anticipated.
−Removed: The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position, results of operations and cash flows.
−Removed: We are from time-to-time involved in various litigation matters and governmental or regulatory investigations or similar matters arising out of our current or future business.
−Removed: Our insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
−Removed: Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws.
−Removed: Should the ultimate judgments or settlements in any pending litigation or future litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: At this time, it is not possible to predict when LIBOR will be replaced as the reference rate in the agreements governing the Company’s indebtedness and hedging agreements or the effect any discontinuance, modification or other reforms to LIBOR, or the establishment of alternative reference rates such as SOFR, or any other reference rate, will have on the Company.
+Added: However, if LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form, the Company’s borrowing costs may be adversely affected.
+Added: Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.
+Added: Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in our annual report.
+Added: If we fail to maintain the adequacy of our internal controls, including, but not limited to, preventing unauthorized access to our systems, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting.
+Added: Furthermore, this assessment may be complicated by any acquisitions we have completed or may complete.
+Added: In certain markets, including, without limitation, China and Spain, our member sponsors perform payment processing operations and related support services pursuant to services agreements.
+Added: We expect that the member sponsors will continue to provide these services until such time as we may integrate these functions into our operations.
+Added: Accordingly, we rely on our member sponsors to provide financial data, such as amounts billed to merchants, to assist us with compiling our accounting records.
+Added: As such, our internal control over financial reporting could be materially affected, or is reasonably likely to be materially affected, by the internal control and procedures of our member sponsors in these markets.
+Added: While we continue to dedicate resources and management time to ensuring that we have effective internal control over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on the market's perception of our business and on our stock price.
+Added: Intellectual Property Risks
We may not be able to successfully manage our intellectual property and may be subject to infringement claims.
In our rapidly developing legal framework, we rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our proprietary technology.
−Removed: Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or may develop software or technology that competes with ours.
+Added: Despite our efforts to protect our intellectual
+Added: property, third parties may infringe or misappropriate our intellectual property or may develop software or technology that competes with ours.
Our competitors may independently develop similar technology, duplicate our services or design around our intellectual property rights.
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We may also be subject to costly litigation in the event our services and technology infringe upon another party’s proprietary rights.
−Removed: Third parties may have, or may eventually be issued, patents that would be infringed by our services or technology.
+Added: Third parties may have, or may eventually be issued, patents that could be infringed by our services or technology.
Any of these third parties could make a claim of infringement against us with respect to our services or technology.
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An adverse determination in any litigation of this type could limit our ability to use the intellectual property subject to these claims and require us to design around a third party’s patent, which may not be possible, or to license alternative technology from another party, which may be costly.
−Removed: In addition, litigation is often time consuming and expensive to defend and could result in the diversion of the time and attention of our employees.
−Removed: New or revised tax regulations, unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense.
−Removed: Changes in tax laws or their interpretations could result in changes to enacted tax rates and may require complex computations to be performed that were not previously required, significant judgments to be made in interpretation of the new or revised tax regulations and significant estimates in calculations, as well as the preparation and analysis of information not previously relevant or regularly produced.
−Removed: Future changes in enacted tax rates could negatively affect our results of operations.
−Removed: Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities.
−Removed: An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively affecting our results of operations and cash flows.
−Removed: We have recognized estimated liabilities on the balance sheet for material known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item.
−Removed: These liabilities reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.
−Removed: While we believe that the liabilities are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an
−Removed: issue raised by a tax authority will be finally resolved at a financial amount no more than any related liability.
−Removed: An unfavorable resolution, therefore, could negatively affect our financial position, results of operations and cash flows in the current and/or future periods.
−Removed: We may become subject to additional U.S., state or foreign taxes that cannot be passed through to our customers, in which case our earnings and cash flows could be adversely affected.
−Removed: We are or may be subject in various jurisdictions to certain taxes that are not derived based on earnings (e.g.
−Removed: sales, gross receipts, property, value-added and other business taxes).
−Removed: Application of these taxes is an emerging issue in our industry and the taxing authorities have not yet all adopted uniform regulations on certain of these topics.
−Removed: If we are required to pay such taxes and are not able to pass the tax cost through to our customers, our earnings and cash flows would be negatively affected.
−Removed: We have structured our business in accordance with existing tax laws and interpretations of such laws which have been confirmed through either tax rulings or opinions obtained in various jurisdictions, including those related to value-added taxes in Europe.
−Removed: Changes in tax laws or their interpretations could decrease the value of revenues we receive and the amount of our cash flows and have a material adverse effect on our business.
−Removed: Risks Related to the Merger with TSYS
−Removed: We have incurred and expect to continue to incur substantial costs in connection with integration activities related to the Merger.
−Removed: We have incurred and expect to continue to incur substantial costs and charges in connection with integration activities related to the Merger, including costs associated with employee termination benefits, consulting and other advisory fees, as well as asset write-offs.
−Removed: There are a large number of processes, policies, procedures, operations, technologies and systems that may need to be integrated, including our business operating platforms and other operational matters as well as integrating our purchasing, accounting and finance, sales, payroll, pricing and benefits and other administrative processes.
−Removed: While we have assumed that a certain level of costs will be incurred, there are many factors beyond our control that could affect the total amount or the timing of the integration costs.
−Removed: Moreover, many of the costs that will continue to be incurred are, by their nature, difficult to estimate accurately.
−Removed: These costs could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative costs and the realization of economies of scale and cost savings.
−Removed: These integration costs may result in significant charges against earnings, and the amount and timing of such charges are uncertain at present.
−Removed: Combining with TSYS may be more difficult, costly or time consuming than expected and we may fail to realize the anticipated benefits of the Merger.
−Removed: The success of the Merger will depend, in part, on the ability to realize the anticipated cost savings from combining our business with the acquired operations of TSYS.
−Removed: To realize the anticipated benefits and cost savings from the Merger, we must successfully integrate and combine our businesses in a manner that permits those cost savings to be realized.
−Removed: If we are not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.
−Removed: In addition, the actual cost savings and anticipated benefits of the Merger could be less than anticipated.
−Removed: It is possible that the integration process could result in the loss of key employees, the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers, commercial counterparties and employees or to achieve the anticipated benefits and cost savings of the Merger.
−Removed: Integration efforts may also divert management attention and resources.
−Removed: These integration matters could have an adverse effect on us for an undetermined period.
−Removed: Our future results may suffer if we do not effectively manage our expanded operations.
−Removed: Following the completion of the Merger, the size of our business increased significantly.
−Removed: Our future success will depend, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
−Removed: We may also face increased scrutiny from governmental authorities as a result of the significant increase in the size of our business.
−Removed: There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings, revenue enhancements or other benefits currently anticipated from the Merger.
−Removed: Risks Related to Our Organizational and Capital Structure
−Removed: If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.
−Removed: All of our businesses function at the intersection of rapidly changing technological, social, economic and regulatory developments that requires a wide ranging set of expertise and intellectual capital.
−Removed: To successfully compete and grow, we must recruit, develop and retain the necessary personnel who can provide the needed expertise across the entire spectrum of intellectual capital needs.
−Removed: In addition, we must develop our personnel to fulfill succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital.
−Removed: However, the market for qualified personnel is competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors.
−Removed: In addition, the success of the Merger will depend in part on our ability to retain key employees.
−Removed: It is possible that these employees may decide not to remain with us.
−Removed: We cannot assure that key personnel, including executive officers, will continue to be employed or that we will be able to attract and retain qualified personnel in the future.
−Removed: Failure to retain or attract key personnel could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: In addition, such litigation is often time consuming and expensive to defend and could result in the diversion of the time and attention of our employees.
+Added: Risks Related to Our Capital Structure
Our substantial indebtedness could adversely affect us and limit our business flexibility.
−Removed: We have a significant amount of indebtedness.
+Added: We have a significant amount of indebtedness and may incur other debt in the future.
Our level of debt and the covenants to which we agreed could have negative consequences on us, including, among other things, (1) requiring us to dedicate a large portion of our cash flow from operations to servicing and repayment of the debt;
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No assurance can be given that we will be able to or will choose to pay any dividends or repurchase any shares in the foreseeable future.
−Removed: Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk.
−Removed: We operate in a rapidly changing industry.
−Removed: Accordingly, our risk management policies and procedures may not be fully effective to identify, monitor and manage our risks.
−Removed: If our policies and procedures are not fully effective or if we are not always successful in identifying and mitigating all risks to which we are or may be exposed, we may suffer uninsured liability, harm to
−Removed: our reputation or be subject to litigation or regulatory actions that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
−Removed: Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
−Removed: Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in our annual report.
−Removed: If we fail to maintain the adequacy of our internal controls, including, but not limited to, preventing unauthorized access to our systems, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
−Removed: Furthermore, this assessment may be complicated by any acquisitions we have completed or may complete.
−Removed: In certain markets, including, without limitation, China, the Republic of Malta and Spain, our member sponsors perform payment processing operations and related support services pursuant to services agreements.
−Removed: We expect that the member sponsors will continue to provide these services until such time as we may integrate these functions into our operations.
−Removed: Accordingly, we rely on our member sponsors to provide financial data, such as amounts billed to merchants, to assist us with compiling our accounting records.
−Removed: As such, our internal control over financial reporting could be materially affected, or is reasonably likely to be materially affected, by the internal control and procedures of our member sponsors in these markets.
−Removed: While we continue to dedicate resources and management time to ensuring that we have effective internal control over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on the market's perception of our business and on our stock price.
+Added: Risks related to the COVID-19 pandemic
+Added: Our business has been and will likely continue to be negatively affected by the COVID-19 pandemic.
+Added: The COVID-19 pandemic continues to adversely affect global commercial activity and has contributed to significant volatility in the financial markets.
+Added: We experienced revenue declines in fiscal 2020 related to COVID-19 due to a reduction in spending and closures of or slowdowns of certain of our customer businesses throughout North America, Europe and Asia Pacific.
+Added: While we expect the COVID-19 pandemic will continue to have an adverse effect on our revenues and earnings in 2021, we do expect a steady and progressive economic recovery throughout the year.
+Added: We have experienced and may continue to experience adverse effects due to a number of operational factors, including but not limited to:
+Added: • Third-party disruptions due to COVID-19, including potential outages and service effects at network providers, call centers and other suppliers due to restrictions or closures imposed in relation to the pandemic;
+Added: • Increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption, given increased online banking, e-commerce, remote work and other online activity;
+Added: • Challenges to the availability and reliability of our solutions and services due to changes to operations, including the possibility of one or more clusters of COVID-19 cases occurring at our facilities, affecting key employees or a significant portion of our workforce or third parties on which we depend.
+Added: • Increased operational, business continuity and cybersecurity risk resulting from the significant increase in the number of our employees working remotely as a result of the pandemic.
+Added: Additionally, COVID-19 could require new or modified processes, procedures and controls to respond to changes in our business environment.
+Added: Any of these developments may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations, financial condition and cash flows even after the COVID-19 pandemic has subsided.
+Added: The full effects of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and are difficult to predict at this time.
+Added: Such developments include, but are not limited to, the ultimate severity, scope and duration of the pandemic and the preventative measures implemented to help limit the spread of the illness, the availability and effectiveness of treatments or vaccines and how soon and to what extent normal economic conditions, operations and demand for our services can resume.
+Added: The continued spread of COVID-19 has caused an economic slowdown and recession in the United States and other markets in which we operate, and it is possible that it could cause a global recession.
+Added: It may also affect financial markets and corporate credit markets which could adversely affect our access to financing or the terms of any such financing.
+Added: Moreover, the global macroeconomic effects of the pandemic may persist for an indefinite period, even after the pandemic has subsided.
+Added: Accordingly, the ultimate effects on our operations, financial condition and cash flows cannot be determined at this time.
+Added: In addition, many of the other risk factors described herein are heightened by the effects of the COVID -19 pandemic and related economic conditions, which in turn could materially adversely affect our business, financial condition, access to financing, results of operations and liquidity.
+Added: Risks Related to General Economic Conditions
+Added: We are subject to economic and geopolitical risk, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could negatively affect our business, financial condition, results of operations and cash flows.
+Added: The global payments technology industry depends heavily on the overall level of consumer, business and government spending.
+Added: We are exposed to general economic conditions that affect consumer confidence, spending, and discretionary income and changes in consumer purchasing habits.
+Added: A sustained deterioration in general economic conditions in the markets in which we operate or increases in interest rates may adversely affect our financial performance by reducing the number or average purchase amount of transactions made using electronic payments.
+Added: A reduction in the amount of consumer spending could result in a decrease in our revenues and profits.
+Added: If our merchants make fewer sales to consumers using electronic payments or consumers using electronic payments spend less per transaction, we will have fewer transactions to process or lower transaction amounts, each of which would contribute to lower revenues.
+Added: Additionally, credit card issuers may reduce credit limits and
+Added: become more selective in their card issuance practices.
+Added: Any of these developments could have a material adverse effect on our financial position and results of operations.
+Added: A downturn in the economy could force merchants, financial institutions or other customers to close or petition for bankruptcy protection, resulting in lower revenue and earnings for us and greater exposure to potential credit losses and future transaction declines.
+Added: We also have a certain amount of fixed costs, including rent, debt service, and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy.
+Added: Changes in economic conditions could also adversely affect our future revenues and profits and cause a materially adverse effect on our business, financial condition, results of operations and cash flows.
+Added: Reject losses arise from the fact that, in most markets, we collect our fees from our merchants on the first day after the monthly billing period.
+Added: This results in the build-up of a substantial receivable from our customers.
+Added: If a merchant were to go out of business during the billing period, we may be unable to collect such fees, which could negatively affect our business, financial condition, results of operations and cash flows.
+Added: In addition, our business, growth, financial condition or results of operations could be materially adversely affected by instability or changes in a country’s or region’s economic conditions;
+Added: changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise;
+Added: increased difficulty of conducting business in a country or region due to actual or potential political or military conflict;
+Added: or action by the United States or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities.
+Added: A possible slowdown in global trade caused by increasing tariffs or other restrictions could decrease consumer or corporate confidence and reduce consumer, government and corporate spending in countries inside or outside the United States, which could adversely affect our operations.
+Added: On January 31, 2020, the United Kingdom ceased to be a member state of the European Union ("Brexit"), with a transition period that ended on December 31, 2020.
+Added: During the transition period, existing arrangements between the U.K.
+Added: remained in place.
+Added: Following the transition period, the U.K.
+Added: is no longer a part of the E.U.
+Added: single market.
+Added: In December 2020, the U.K and E.U.
+Added: announced they had entered into a post-Brexit deal on certain aspects of trade and other strategic and political issues.
+Added: This new agreement could potentially avoid some of the anticipated disruption of the U.K.’s exit from the E.U.
+Added: While we have not experienced significant adverse effects on our U.K.
+Added: business and its financial condition, results of operations and cash flows to date as a result of the new deal, no assurance can be given regarding the potential future effects of the agreed Brexit trade deal, and our U.K.
+Added: business and our financial conditions, results of operations and cash flows may be adversely affected.
+Added: General Risk Factors
+Added: If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.
+Added: All of our businesses function at the intersection of rapidly changing technological, social, economic and regulatory developments that requires a wide ranging set of expertise and intellectual capital.
+Added: To successfully compete and grow, we must recruit, develop and retain personnel who can provide the needed expertise across the entire spectrum of intellectual capital needs.
+Added: In addition, we must develop our personnel to fulfill succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital.
+Added: However, the market for qualified personnel is competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors.
+Added: We cannot assure that key personnel, including executive officers, will continue to be employed or that we will be able to attract and retain qualified personnel in the future.
+Added: Failure to retain or attract key personnel could have a material adverse effect on our business, financial condition, results of operations and cash flows.
+Added: The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position, results of operations and cash flows.
+Added: We are from time-to-time involved in various litigation matters and governmental or regulatory investigations or similar matters arising out of our current or future business.
+Added: Our insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
+Added: Litigation could be costly, time-consuming and divert attention of management from daily operational needs.
+Added: Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws.
+Added: Should the ultimate judgments or settlements in any pending litigation or future litigation or investigation significantly exceed our insurance coverage, they could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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.