What changed in this filing

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Item 1. Business

2022-02-18 compared with 2021-02-19 · 119 added, 86 removed, 182 unchanged (53% of the section changed)

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and its consolidated subsidiaries are referred to collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.

We are a leading pure play payments technology company providing cutting edge payments and software solutions to approximately 3.5 million merchant locations and more than 1,300 financial institutions across more than 100 countries throughout North America, Europe, Asia-Pacific and Latin America.

Our technologies, services and employee expertise enable us to provide a broad range of solutions that allow our customers to operate their businesses more efficiently across a variety of channels around the world.

Headquartered in Georgia with approximately 24,000 employees worldwide, Global Payments is a member of the S&P 500.

We are a leading payments technology company delivering innovative software and services to approximately 4.0 million merchant locations and more than 1,350 financial institutions across more than 170 countries throughout North America, Europe, Asia-Pacific and Latin America.

Our technologies, services and team member expertise allow us to provide a broad range of solutions that enable our customers to operate their businesses more efficiently across a variety of channels around the world.

Headquartered in Georgia with approximately 25,000 team members worldwide, Global Payments is a Fortune 500 company and is a member of the S&P 500.

Our common stock is traded on the New York Stock Exchange under the symbol "GPN."

Merger with Total System Services, Inc.

On September 18, 2019, we consummated our merger with Total System Services, Inc.

("TSYS") (the "Merger") for total purchase consideration of $24.5 billion, primarily funded with shares of our common stock.

Prior to the Merger, TSYS was a leading global payments provider, offering seamless, secure and innovative solutions to issuers, merchants and consumers.

See "Note 2—Acquisitions" in the notes to the accompanying consolidated financial statements for further discussion of the Merger.

Industry Overview

The payments technology industry provides financial institutions, businesses and consumers with payment processing services, merchant acceptance solutions and related information and other value-added services.

The industry continues to grow as a result of wider merchant acceptance and increased use of credit and debit cards, advances in payment processing technology and migration to ecommerce, omnichannel and contactless payment solutions.

The proliferation of credit and debit cards, as well as other digital payment solutions, has made the acceptance of electronic payments a necessity for many businesses, regardless of size, in order to remain competitive.

The outbreak of the COVID-19 virus in 2020 has further accelerated the use of electronic payments, the need for development of technologies and electronic-based solutions and expansion of ecommerce, omnichannel and contactless payment solutions.

The industry continues to grow as a result of wider merchant acceptance and increased use of credit and debit cards, advances in payment solutions and processing technology and migration to ecommerce, omnichannel and contactless payment solutions.

The proliferation of credit and debit cards, as well as other digital payment solutions, has made the acceptance of digital payments a necessity for many businesses, regardless of size, in order to remain competitive.

The COVID-19 pandemic has further accelerated the use of digital payments, the need for development of technologies and digital-based solutions and expansion of ecommerce, omnichannel and contactless payment solutions.

This increased use of cards and the availability of more sophisticated technology services to all market segments has resulted in an increasingly competitive and specialized industry.

We seek to leverage the adoption of, and transition to, card, electronic and digital-based payments by expanding our share in our existing markets through our distribution channels and service innovation, as well as through acquisitions to improve our offerings and scale.

We seek to leverage the adoption of, and transition to, card and digital-based payments by expanding our share in our existing markets through our distribution channels and service innovation, as well as through acquisitions to improve our offerings and scale.

We also seek to enter new markets through acquisitions, alliances and joint ventures around the world.

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The key tenets of our strategy include the following:

• Deepen our competitive advantage through our pure play payments strategy;

• Continue to scale the three pillars of our strategy:

software-driven focus, omnichannel expansion and exposure to faster growth markets;

• Further expand our leadership position in our technology-enabled businesses;

• Enhance and expand our offerings as a product-led, sales-driven company;

• Deliver operational excellence and outstanding customer experiences;

• Continue to develop seamless multinational solutions for leading global customers;

• Pursue potential domestic and international acquisitions of, investments in and alliances with companies that have high growth potential, significant market presence, sustainable distribution platforms and/or key technological capabilities.

• Leading with technology and innovation to deepen our competitive advantages;

• Further scaling the four pillars of our strategy:

software-driven focus, ecommerce & omnichannel solutions, exposure to faster growth markets and business-to-business ("B2B") payments;

• Delivering commerce enablement solutions globally to broaden our leading position as a sales-driven, product-led company;

• Providing frictionless, best-in-class customer experiences, creating longer-term relationships;

• Nurturing our culture, values and diversity, equity and inclusion initiatives to attract, retain and motivate exceptional team members;

• Supporting our communities as a socially responsible company with purpose and understanding.

Competitive Strengths

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• Technology Solutions - We provide innovative technology-based solutions, including enterprise software solutions, that enable our customers to operate their business more efficiently and simplify the payments process, regardless of the channel through which the transaction occurs.

We believe our robust technology solutions will continue to differentiate us in the marketplace and will position us for continued growth.

We believe our robust technology solutions will continue to differentiate us in the marketplace and position us for continued growth.

• Scalable Operating Environment and Technology Infrastructure - We operate with a multi-channel, global technology infrastructure, which provides scalable and innovative service offerings and a consistent service experience to our merchants, customers, financial institutions and other partners worldwide, while also driving sustainable operating efficiencies.

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• Disciplined Acquisition Approach - Our proven track record for selectively and successfully sourcing, completing and integrating acquired businesses in existing and new markets positions us well for future growth and as an attractive partner for potential acquisition targets.

Recent Acquisitions

On June 10, 2021, we acquired Zego, a real estate technology company that provides a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States, for cash consideration of approximately $933 million .

This acquisition aligns with our technology-enabled, software driven strategy and expands our business into a new vertical market.

During the year ended December 31, 2021, we completed other strategic business acquisitions for an aggregate purchase price of approximately $963 million.

Our acquisition of MineralTree, a leading provider of accounts payable automation and B2B payments solutions, expands our target addressable market and provides incremental avenues for growth in one of the most attractive technology markets.

Our acquisitions of the Bankia merchant services business and Worldline's PayOne Austrian acquiring business deepen our presence in Europe and expand the scale of our distribution and technologies.

On September 18, 2019, we consummated our merger with Total System Services, Inc.

("TSYS") (the "Merger") for total purchase consideration of $24.5 billion, primarily funded with shares of our common stock.

Prior to the Merger, TSYS was a leading global payments provider, offering seamless, secure and innovative solutions to issuers, merchants and consumers.

See "Note 2—Acquisitions" in the notes to the accompanying consolidated financial statements for further discussion of these acquisitions.

Business Segments

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Through our Merchant Solutions segment, we provide payments technology and software solutions to customers globally.

Our payment technology solutions are similar around the world in that we enable our customers to accept card, electronic, check and digital-based payments.

Our comprehensive offerings include, but are not limited to, authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements and on-line reporting.

Our payment technology solutions are similar around the world in that we enable our customers to accept card, check and digital-based payments.

Our comprehensive offerings include, but are not limited to, authorization, settlement and funding services, customer support, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and reporting.

In addition, we offer a wide array of enterprise software solutions that streamline business operations to customers in numerous vertical markets.

We also provide a variety of value-added services, including specialty point-of-sale solutions, analytic and customer engagement tools, payroll and human capital management services and reporting that assist our customers with driving demand and operating their businesses more efficiently.

We also provide a variety of value-added solutions and services, including specialty point-of-sale software, analytic and customer engagement, human capital management and payroll and reporting that assist our customers with driving demand and operating their businesses more efficiently.

Our value proposition is to provide distinctive high-quality, responsive and secure services to all of our customers.

We distribute our Merchant Solutions services globally through multiple relationship-led and technology-enabled distribution channels and target customers in many vertical markets located throughout North America, Europe, Asia-Pacific and Latin

We distribute our Merchant Solutions services globally through multiple technology-enabled and relationship-led distribution channels and target customers in many vertical markets located throughout North America, Europe, Asia-Pacific and Latin America.

The majority of our revenues is generated by services priced as a percentage of transaction value or a specified fee per transaction, depending on the payment type or the market.

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Distribution Channels

In the Merchant Solutions segment, we actively market and provide our payment services, enterprise software solutions and other value-added services directly to our customers through a variety of relationship-led and technology-enabled distribution channels.

Through our relationship-led direct sales force worldwide, as well as bank and other referral partnerships, we offer our payments technology services, software and other value-added solutions directly to customers across numerous verticals in the markets we serve.

We offer high-touch services that provide our customers with reliable and secure solutions coupled with high quality and responsive support services.

Although our primary focus is on building high quality direct relationships with merchants, we also provide our services to merchants through independent sales organizations ("ISOs") and financial institutions.

In the Merchant Solutions segment, we actively market and provide our payment services, enterprise software solutions and other value-added services directly to our customers through a variety of technology-enabled and relationship-led distribution channels.

Technology-Enabled.

Many of our payment solutions are technology-enabled in that they incorporate or are incorporated into innovative, technology-driven solutions, including enterprise software solutions, designed to enable merchants to better manage their businesses.

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Our technology-enabled distribution includes integrated and vertical market software solutions and ecommerce and omnichannel solutions, each as described below.

Global Payments Integrated Solutions.

Integrated Solutions.

Our integrated solutions provide advanced payments technology that is deeply embedded into business management software solutions owned by our technology partners who operate in numerous vertical markets, primarily in North America.

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• AdvancedMD .

Through AdvancedMD, we provide cloud-based enterprise solutions to small-to-medium sized ambulatory physician practices in the United States.

Through AdvancedMD, we provide cloud-based enterprise solutions to small-to-medium sized ambulatory care physician practices in the United States.

• Education Solutions .

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We offer a comprehensive suite of solutions to the gaming market in North America.

These solutions include credit and debit card cash advance, cashless advance, iGaming solutions, traditional and electronic check processing and other services specific to this market.

Through Xenial, we offer leading-edge enterprise software solutions, integrated with our payment services and other adjacent business service applications, to the restaurant and hospitality and retail vertical markets.

These solutions include credit and debit card cash advance, cashless advance, iGaming solutions, traditional and digital check processing and other services specific to this market.

Through Xenial, we offer leading-edge enterprise software and hardware solutions, integrated with our payment services and other adjacent business service applications, to the restaurant and hospitality vertical markets.

Ecommerce and Omnichannel .

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We sell ecommerce and omnichannel solutions to customers of all sizes, from small businesses accepting payments in a single country to enterprise and multinational businesses that have complex payment needs and operate retail and online businesses in multiple countries.

Relationship-Led.

We offer high-touch services that provide our customers with reliable and secure solutions coupled with high-quality and responsive support services.

Although our primary focus is on building high-quality, direct relationships with merchants, we also provide our services to merchants through independent sales organizations ("ISOs") and financial institutions.

Credit and Debit Card Transaction Processing

Credit and debit card transaction processing includes the processing of the world's major international card brands, including American Express, Discover Card ("Discover"), JCB, Mastercard, UnionPay International ("UPI") and Visa, as well as certain domestic debit networks, such as Interac in Canada.

Credit and debit card transaction processing includes the processing of the world's major international card brands, including American Express, Discover Card ("Discover"), JCB, Mastercard, UnionPay International and Visa, as well as certain domestic debit networks, such as Interac in Canada.

Credit and debit networks establish uniform regulations that govern much of the payment card industry.

During a typical payment transaction, the merchant and the card issuer do not interface directly with each other, but instead rely on payments technology companies, such as Global Payments, to facilitate transaction processing services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back office support services such as chargeback and retrieval resolution.

We process funds settlement under two models:

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Through our Issuer Solutions segment, we provide solutions that enable financial institutions and other financial service providers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform.

In addition, we provide flexible commercial payments and ePayables solutions that support business-to-business payment processes for businesses and governments.

In addition, we provide flexible commercial payments and ePayables solutions that support B2B payment processes for businesses and governments.

We also offer complementary services, including account management and servicing, fraud solution services, analytics and business intelligence, cards, statements and correspondence, customer contact solutions and risk management solutions.

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Payment processing services revenues are generated primarily from charges based on the number of accounts on file, transactions and authorizations processed, statements generated and/or mailed, managed services, cards embossed and mailed, and other processing services for cardholder accounts on file.

Most of these contracts have prescribed annual minimums, penalties for early termination, and service level agreements that may affect contractual fees if specific service levels are not achieved.

Issuer Solutions revenues also include loyalty redemption services and professional services.

Most of these contracts

have prescribed annual minimums, penalties for early termination, and service level agreements that may affect contractual fees if specific service levels are not achieved.

Issuer Solutions segment revenues also include loyalty redemption services and professional services.

Business and Consumer Solutions Segment

Our Business and Consumer Solutions segment provides general purpose reloadable ("GPR") prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States through our Netspend® and other brands.

Through our Business and Consumer Solutions segment, we provide customers with access to depository accounts insured by the Federal Deposit Insurance Corporation ("FDIC") with a menu of features specifically tailored to their needs.

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Business and Consumer Solutions currently has active agreements with four card issuing banks.

Additionally, our Business and Consumer Solutions segment provides B2B payment services and software-as-a-service (“SaaS”) offerings that automate key procurement processes, including invoice capture, coding and approval, and enable virtual cards and integrated payments options across a variety of key vertical markets.

The Business and Consumer Solutions segment markets its services through multiple distribution channels, including alternative financial service providers, traditional retailers, direct-to-consumer and online marketing programs and contractual relationships with corporate employers.

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Customers are also charged a monthly maintenance fee after a specified period of inactivity.

We also charge fees associated with additional services offered in connection with our accounts, including the use of overdraft features, a variety of bill payment options, card replacement, foreign exchange and card-to-card transfers of funds initiated through our call centers.

We also charge fees associated with additional services offered in connection with programs we manage, including the use of overdraft features, a variety of bill payment options, card replacement, foreign exchange and card-to-card transfers of funds initiated through our call centers.

Revenues are recognized net of fees charged by the payment networks for services they provide in processing transactions routed through them.

Our Merchant Solutions segment competes with financial institutions and merchant acquirers who provide businesses with merchant acquiring services and related services.

We believe that as of December 31, 2020, we were one of the largest merchant acquirers in the small and medium-sized business segment (merchants who have less than $5 million in annual bankcard sales volume) in the United States.

We have recently commenced a strategic evaluation of the consumer portion of this segment with the intent to focus on our growing B2B portfolio.

Our Merchant Solutions segment competes with financial institutions, merchant acquirers and other financial technology companies who provide businesses with merchant acquiring services and related services.

As of December 31, 2021, we believe that we were one of the largest merchant acquirers in the small and medium-sized business segment (merchants who have less than $5 million in annual bankcard sales volume) in the United States.

In the United States, we compete primarily with Fiserv, Inc.

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("FIS"), Chase Paymentech Solutions, LLC, Elavon, Inc., a subsidiary of U.S.

Bancorp, Wells Fargo Bank, N.A and Square, Inc.

While these are our primary competitors, our vertically focused business in the United States compete with other organizations.

Bancorp, Wells Fargo Bank, N.A and Block Inc.

(formerly known as Square, Inc.).

While these are our primary competitors, our vertically focused business in the United States competes with other organizations.

Advances in technology are also enabling new entrants, some of which depart from traditional payment models.

Internationally, financial institutions remain the primary providers of payment technology services to merchants, although the outsourcing of these services to third-party service providers is becoming more prevalent.

In addition to financial institutions, competitors in Europe include Ayden N.V.

Our Issuer Solutions segment encounters competition from third-party payment card issuer processors, core banking platform providers, independent software vendors and various other firms that provide products and services to payment card issuers in the markets we serve.

The United States market for third-party issuer processing is primarily serviced by three vendors, including TSYS, with our largest competitor being a subsidiary of Fiserv.

We believe that as of December 31, 2020, we were the largest third-party processor for credit card issuers in North America and one of the largest in Europe based on net revenue from solutions provided to credit card issuers.

We expect competition to continue to increase as new companies enter our markets and existing competitors expand or consolidate their product lines and services.

Our Issuer Solutions segment encounters competition from other third-party payment card processors, the card brands, core banking platform providers, independent software vendors and various other firms that provide products and services to payment card issuers in the markets we serve.

The United States market for third-party issuer processing is primarily serviced by three vendors, including TSYS.

As of December 31, 2021, we believe that we were the largest third-party processor for credit card issuers in North America and one of the largest in Europe based on net revenue from solutions provided to credit card issuers.

Our Business and Consumer Solutions segment primarily competes with other demand deposit account and prepaid debit account program managers to provide financial service solutions to the underbanked and other consumers and businesses.

Our primary competitors in this space include Green Dot Corporation, InComm and Fiserv.

As of December 31, 2020, we believe that we were one of the two largest prepaid program managers in the United States based on gross dollar volume (total spending on the accounts we manage) processed.

Our primary competitors in this space include Green Dot Corporation, InComm, Fiserv and Chime.

December 31, 2021, we believe that we were one of the two largest prepaid program managers in the United States based on gross dollar volume (total spending on the accounts we manage) processed.

Safeguarding Our Business

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and international patents, trademarks, service marks and domain names that align with our brand strategy.

We also enforce our trademarks against potential sources of confusion that could harm our brand and ability to compete.

We also enforce our trademarks against potential sources of misunderstanding that could harm our brand and ability to compete.

In addition to using our intellectual property in our own operations, we grant licenses to certain of our customers to use our intellectual property.

Human Capital Management

Our company currently does business in over 100 countries around the world, with team members living and working in 38 of them.

As of December 31, 2020, our approximately 24,000-employee workforce represented approximately 80 nationalities and 16 natively spoken languages, with approximately 68% residing in the Americas, 12.5% residing in Europe and 19.5% residing in Asia Pacific.

Many of our employees are highly skilled in technical areas specific to payment technology and software solutions.

Growth and Development

Our strategy to develop and retain the best talent includes an emphasis on employee development and training.

Our online training platform provides a vast array of tools and application resources for all team members to build learning experiences and skills.

In order to help our employees strengthen the skills and behaviors needed for career advancement, the enhanced curriculum has been mapped to each of our defined leadership capabilities.

Mandatory annual unconscious bias training is also required for all team members.

Well-being and Safety during COVID-19 Pandemic

Team Member Population

We currently do business in over 170 countries around the world, with team members living and working in 32 of them.

As of December 31, 2021, our approximately 25,000 team member workforce represented approximately 80 nationalities and 18 natively spoken languages, with approximately 64% residing in the Americas, 16% residing in Europe and 20% residing in Asia Pacific.

Many of our team members are highly skilled in technical areas specific to payment technology and software solutions.

Talent Management and Retention

We place an emphasis on attracting and retaining premier and diverse team members.

To that end, we have implemented programs and initiatives focused on enriching new hire experiences, developing team members through extensive training and professional development opportunities, including mentorship programs, promoting team members’ wellness and safety, particularly during challenging times such as the COVID-19 pandemic, providing flexible work arrangements and offering comprehensive and competitive benefits packages, including paid parental leave, team member assistance and savings and retirement programs.

Further, we honor and recognize the efforts of all of our team members and celebrate our team members through a combination of programs, including team appreciation activities to celebrate all team members and annual awards programs to honor top performers and notable contributors.

We also regularly survey our team members to help us understand their perspectives related to workplace culture, engagement, well-being and to inform our diversity and inclusion strategies and initiatives.

The results from these surveys are leveraged to further develop our talent management initiatives.

Well-being and Safety

The success of our business is connected to the well-being of our team members.

Accordingly, we are committed to the health, safety and wellness of our team members worldwide.

Accordingly, we are committed to the health, safety and wellness of our team members worldwide, and we provide team members with various health and wellness programs and benefits.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our team members as well as the communities in which we operate.

This included enabling the vast majority of our worldwide employees to seamlessly shift to work from home.

Over the past several years, we have made significant investments in our operating environments and technology that support day-to-day execution.

This included enabling the vast majority of our worldwide team members to seamlessly shift to remote work.

Over the past several years, we have made significant investments in modernizing our operating environments and technologies that support day-to-day execution.

The largely cloud-based systems and collaboration tools we use globally facilitated this smooth transition of operations to business continuity mode.

Additional health and safety measures have been implemented for team members continuing critical work within office locations, such as:

For those team members who continued to work in our offices, and as team members have returned in certain regions in accordance with local guidelines and mandates, we have implemented health and safety protocols to help keep our team members safe, such as:

• Increasing cleaning protocols across all our locations;

• Initiating regular communication regarding effects of the COVID-19 pandemic on our operations, including health and safety protocols and procedures;

• Expanding resources and benefits available to team members, including hosting team member vaccination clinics, free at-home COVID-19 testing and expanded mental health and well-being initiatives;

• Adjusting attendance policies to encourage those who are sick to stay home;

• Implementing protocols to address actual and suspected COVID-19 cases and potential exposure.

Growth and Development

Our strategy to develop and retain the best talent includes an emphasis on team member development and training.

We provide a variety of training and development opportunities to team members globally, including our online training platform that contains a vast array of tools and application resources for all team members to build learning experiences and skills.

In order to help our team members strengthen the skills and behaviors needed for career advancement, our new performance management program enables team members to drive their development with a focus on growth, performance, and well-being through regular meetings with their leader.

Inclusion and Diversity

Our inclusion and diversity program focuses on workforce (our people), workplace (culture, tools and programs) and community.

Our inclusion and diversity program focuses on workforce (our team members), workplace (culture, tools and programs) and community.

We believe that our business is strengthened by a diverse workforce that reflects the communities in which we operate.

We believe all of our employees should be treated with respect and equality, regardless of gender, ethnicity, sexual orientation, gender identity, religious beliefs, or other characteristics and to further this goal, we formally launched an inclusion and diversity initiative in 2018.

As part of this initiative, we became a signatory to the CEO Action for Diversity and Inclusion, the largest CEO-driven business commitment to advance inclusion and diversity in the workplace.

We have worked to make inclusion and diversity a common thread in all of our human resource practices so that we can attract, develop, and retain the best talent for our workforce.

Our focus on these efforts includes:

• Establishing an Inclusion and Diversity Advisory Council, consisting of team members worldwide who provide insight and input on our inclusion and diversity initiative;

• Launching employee resource groups whose mission is to foster support, professional development, and cultural inclusivity for LGBTQIA, women, veterans, and Black team members;

• Creating a sponsorship program to ensure that women and people of color are represented in succession planning for key leadership roles;

• Establishing the Social Justice and Equality fund as a part of our pre-established philanthropic giving, which is used to advocate for or support education, health and wellness, financial empowerment and social equality in underserved communities.

For more information on certain of our human capital practices, including inclusion and diversity, refer to the Proxy Statement Summary section of our 2021 Proxy Statement.

We believe all of our team members should be treated with respect and equality, regardless of gender, ethnicity, sexual orientation, gender identity, religious beliefs, or other characteristics;

to further this goal, we formally launched an inclusion and diversity initiative in 2018.

In 2020, we undertook a series of initiatives to further enhance our existing diversity and inclusion programs.

We have also broadened our focus on inclusion and diversity by including social and racial equity in our conversations and equipping and empowering our Employee Resource Group ("ERG") leaders with the right tools and training to lead their networks.

Through this plan, our aspirational goals are to:

• Improve diversity at all levels across the company, including increasing the representation of women and minorities in leadership positions;

• Increase team member engagement and awareness through education and participation in diversity and inclusion programs, such as our Conversations of Understanding series we have launched to discuss racial inequality in our communities, and the Inclusion and Diversity Advisory Counsel, consisting of team members worldwide who provide insight and input on the progress of our inclusion and diversity initiatives;

• Enhance the strategy and initiatives for our ERGs to expand their reach and effectiveness in educating and supporting our team members.

Environmental, Social and Governance ("ESG")

As part of our annual ESG reporting, we provide additional information about our approach to ESG matters in our Global Responsibility Report (which is not incorporated herein), available in the investor relations section of our website at www.globalpaymentsinc.com .

Various aspects of our business are subject to regulation and supervision under federal, state and local laws in the United States, and foreign laws, regulations and rules, as well as local escheat laws and privacy and information security regulations.

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We have obtained licenses to operate as a money transmitter, seller of checks and/or provider of payment instruments in 49 states and the District of Columbia.

of our authorized agents, maintaining permissible investments in an amount equal to or in excess of our outstanding payment obligations, recordkeeping and reporting and disclosures to consumers.

Our Business and Consumer Solutions segment is also subject to periodic examinations by the relevant licensing authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, distributors and other third parties, privacy and data security policies and procedures and other matters related to our business.

Our Business and Consumer Solutions segment is subject to direct supervision and regulation by the relevant state banking departments or similar agencies charged with enforcement of the relevant statutes and we must comply with various requirements, such as those related to the maintenance of a certain level of net worth, surety bonding, selection and oversight of our authorized agents, maintaining permissible investments in an amount equal to or in excess of our outstanding payment obligations, recordkeeping and reporting and disclosures to consumers.

banks, distributors and other third parties, privacy and data security policies and procedures and other matters related to our business.

Banking Laws and Regulations

Because we provide electronic payment processing services to banks and other financial institutions, we are subject to examination by the Federal Financial Institutions Examination Counsel (the "FFIEC"), an interagency body comprised primarily of federal banking regulators, and also subject to examination by the various state financial regulatory agencies that supervise and regulate the financial institutions for which we provide electronic payment processing and other payment related services.

Because we provide digital payment processing services to banks and other financial institutions, we are subject to examination by the Federal Financial Institutions Examination Council (the "FFIEC"), an interagency body comprised primarily of federal banking regulators, and also subject to examination by the various state financial regulatory agencies that supervise and regulate the financial institutions for which we provide digital payment processing and other payment related services.

The FFIEC examines large data processors in order to identify and mitigate risks associated with systemically significant service providers, including specifically the risks they may pose to the banking industry.

Privacy, Information Security and Other Business Practices Regulation

Aspects of our business are also subject, directly or indirectly, to business and trade practices regulation in the United States, the United Kingdom, the European Union and elsewhere.

For example, in the United States, we and our financial institution customers are, respectively, subject to the Federal Trade Commission’s and the federal banking regulators’ privacy and information safeguarding requirements under the Gramm-Leach-Bliley Act.

These requirements limit the manner in which personal information may be collected, stored, used and disclosed.

The Federal Trade Commission’s information safeguarding rules require us to develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate for our size and complexity, the nature and scope of our activities and the sensitivity of any customer information at issue.

In many jurisdictions, including every U.S.

State, consumers must be notified in the event of a data breach, and such notification requirements continue to increase in scope and cost.

The changing privacy laws in the United States, Europe and elsewhere, including the adoption by the European Union of the General Data Protection Regulation, and the California Consumer Privacy Act, which became effective in January 2020, create new individual privacy rights and impose increased obligations on companies handling personal data.

Aspects of our business are subject, directly or indirectly, to privacy and data protection regulations in the United States, the United Kingdom, the European Union and elsewhere.

In most of the countries in which we operate, these laws impose requirements on the manner in which personal information can be collected, processed, stored and shared.

They also impose requirements, which vary materially by jurisdiction, in the event of a personal data breach.

Compliance with the data protection regulations could potentially require substantive technology infrastructure and process changes across many of the Company’s businesses.

Noncompliance with the General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act, or similar laws and regulations could lead to substantial regulatory fines and penalties, or damages from private causes of action.

We also face security and operational risks relating to third parties upon whom we rely to facilitate or enable our business activities or upon whom our customers rely.

Such third parties include vendors and other partners.

New regulations (including new state laws in the United States or a possible federal privacy law) and new interpretations of existing regulations like the GDPR could create new privacy rights for individuals and new obligations for companies handling personal information.

Such additional laws and regulations could limit our ability to use and share personal or other data, increase costs related to compliance, or adversely affect our ability to move data across borders.

The effect of the regulations could harm our business and financial condition.

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), together with the HIPAA Privacy Rule, governs the use and disclosure of protected health information in healthcare treatment, payment and operations by covered entities.

In addition, multiple states, Congress and regulators outside the United States are considering similar laws or regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data.

See "Item 1A - Risk Factors" for additional discussion of the potential risks associated with future changes in laws or regulations.

Anti-Money Laundering and Counter Terrorist Requirements

Anti-Money Laundering, Anti-Bribery and Sanctions Regulations

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, as amended by the USA PATRIOT Act (collectively, the "Bank Secrecy Act"), and similar laws of other countries, which require that customer identifying information be obtained and verified.

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This registration results in our having direct responsibility to maintain and implement an anti-money laundering compliance program for such subsidiaries.

We are subject to anti-corruption laws and regulations, including the U.S.

Foreign Corrupt Practices Act (“FCPA”) and similar laws outside of the U.S.

such as the U.K.

Bribery Act, that prohibit the making or offering of improper payments to foreign government officials and political figures.

The FCPA has a broad reach and requires maintenance of appropriate records and adequate internal controls to prevent and detect possible FCPA violations.

State Wage Payment Laws and Regulations

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The TCPA regulates certain telephone calls and SMS messages placed using automatic telephone dialing systems or artificial or prerecorded voices.

ESG and Sustainability

Certain governments around the world are adopting laws and regulations pertaining to ESG performance, transparency and reporting.

Regulations may include mandated corporate reporting on ESG overall or in individual areas such as mandated reporting on climate-related financial disclosures.

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.

Where to Find More Information

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In addition, certain of our SEC filings, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and amendments to them can be viewed and printed, free of charge, from the investor relations section of our website at www.globalpaymentsinc.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

Certain materials relating to our corporate governance, including our codes of ethics applicable to our directors, senior financial officers and other employees, are also available in the investor relations section of our website.

Certain materials relating to our corporate governance, including our codes of ethics applicable to our directors, senior financial officers and other employees, and our Global Responsibility Report (which is not incorporated herein) are also available in the investor relations section of our website.

Copies of our filings, specified exhibits and corporate governance materials are also available, free of charge, by writing us using the address on the cover of this Annual Report on Form 10-K.

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

What changed 10-K

Item 1. Business