What changed in this filing

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Item 1. Business

2023-02-17 compared with 2022-02-18 · 134 added, 125 removed, 176 unchanged (60% of the section changed)

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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.

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

The 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 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.

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We believe that our competitive strengths include the following:

• Global Footprint and Distribution - Our worldwide presence allows us to focus our investments on markets with promising gross domestic product fundamentals and favorable secular trends, makes us more attractive to customers with international operations and exposes us to emerging innovations that we can adopt globally, while diversifying our economic risk.

• 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.

• Technology Solutions - We provide innovative technology-based solutions, including enterprise software and other ecommerce enablement solutions, that enable our customers to operate their business more efficiently, increase sales 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 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.

Recent Business Acquisitions and Dispositions

EVO Payments, Inc.

On August 1, 2022, we entered into a merger agreement to acquire EVO Payments, Inc.

(“EVO”) for total purchase consideration of approximately $4 billion.

EVO is a leading payment technology and services provider, offering an array of payment solutions to merchants ranging from small and middle market enterprises to multinational companies and organizations across the Americas and Europe.

The acquisition aligns with our technology-enabled payments strategy, expands our geographic presence and augments our B2B software and payment solutions business.

The acquisition is expected to close in the first quarter of 2023, subject to customary closing conditions.

Consumer Business

On July 31, 2022, we entered into a definitive agreement to sell the consumer portion of our Netspend business for $1 billion, subject to certain closing adjustments.

The disposition further aligns our businesses with our strategy to focus on our core corporate customers, including merchants, financial institutions, software partners and technology leaders.

The transaction is expected to close in the first quarter of 2023, subject to required regulatory approvals and other customary closing conditions.

Gaming Business

On December 6, 2022, we entered into a definitive agreement to sell our gaming business for consideration of approximately $400 million, subject to certain closing adjustments.

The disposition further aligns our businesses with our strategy to focus on our core corporate customers.

The transaction is expected to close in the first quarter of 2023 and is subject to customary terms and conditions, including any required regulatory approvals.

Sale of Merchant Solutions Business in Russia

As a result of economic sanctions that were imposed on individuals and entities in Russia in April 2022 that would have affected our ability to continue normal operations in Russia, we sold our Merchant Solutions business in Russia effective April 29, 2022 for cash proceeds of $9 million.

See "Note 2—Acquisitions" and “Note 3—Business Dispositions” in the notes to the accompanying consolidated financial statements for further discussion of these and other recent transactions.

Business Segments

We operate in three reportable segments:

Merchant Solutions, Issuer Solutions and Business and Consumer Solutions.

During 2022, as a result of the pending divestiture of our consumer business and changes in how our business is managed, we realigned the businesses previously comprising our Business and Consumer Solutions segment to include the B2B portion within our Issuer Solutions segment and the consumer portion forming our new Consumer Solutions segment.

Our three reportable segments now are:

Merchant Solutions, Issuer Solutions and Consumer Solutions.

See "Note 17—Segment Information" in the notes to the accompanying consolidated financial statements for additional information about our segments, including revenues, operating income and depreciation and amortization by segment as well as financial information about geographic areas in which we operate.

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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 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.

We also provide a variety of value-added solutions and services, including specialty point-of-sale software, analytics 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.

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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.

We also earn software subscription and licensing fees, as well as other fees based on specific value-added services that may be unrelated to the number or value of transactions.

We also earn software subscription and licensing fees, as well as other fees for specific value-added services, that may be unrelated to the number or value of transactions.

Distribution Channels

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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.

We grow our integrated solutions business when new or existing merchants enable payments services through enterprise software solutions sold by our partners, including existing and new partners.

We grow our integrated solutions business when new or existing merchants enable payments services through enterprise software solutions sold by our partners, both new and existing.

Vertical Markets Software Solutions .

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We offer integrated payment solutions specifically designed for all levels of educational institutions.

At the university level, we offer integrated commerce solutions, payment services, higher education loan services, credentialing services and open- and closed-loop payment solutions.

For kindergarten through 12 th grade, we provide ecommerce and in-person payments, cafeteria POS solutions and back-office management software, hardware, technical support and training.

For colleges and universities, we offer integrated commerce software solutions, payment services, loan services, credentialing services, open- and closed-loop payment solutions, hardware, technical support and training.

For institutions serving kindergarten through 12 th grade levels, we provide ecommerce and in-person payments, cafeteria POS solutions and back-office management software, hardware, technical support and training.

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 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.

On December 6, 2022, we entered into a definitive agreement to sell our gaming business, and that transaction is expected to close in the first quarter of 2023.

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

Through Zego, we offer a comprehensive resident experience management software and digital commerce solutions to property managers, primarily in the United States.

Ecommerce and Omnichannel .

We offer ecommerce and omnichannel solutions to our customers that seamlessly blend payment gateway services, retail payment acceptance infrastructure and payment technology service capabilities through a unified commerce platform to allow merchants to accept various payment methods through any channel across our geographical footprint.

We offer ecommerce and omnichannel solutions that seamlessly blend payment gateway services, retail payment acceptance infrastructure and payment technology service capabilities through a unified commerce platform to allow merchants to accept various payment methods through any channel across our geographical footprint.

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.

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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 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, among others, 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.

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These agreements allow us to route transactions under the Members' control and identification numbers to clear card transactions through Mastercard and Visa.

In this model, the standards of the card networks restrict us from performing funds settlement or accessing merchant settlement funds, and, instead, require that these funds be in the possession of the Member until the merchant has been funded.

In this model, the standards of the card networks restrict us from

performing funds settlement or accessing merchant settlement funds, and, instead, require that these funds be in the possession of the Member until the merchant has been funded.

Under the direct membership model, we are direct members in various payment networks, allowing us to process and fund transactions without third-party sponsorship.

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How a Card Transaction Works

A typical payment transaction begins when a cardholder presents a card for payment at a merchant location where the card information is captured by a point-of-sale ("POS") terminal card reader or mobile device card reader, which may be sold or leased to the merchant and serviced by us.

Alternatively, card and transaction information may be captured and transmitted to our network through a POS device or ecommerce portal by one of a number of services that we offer directly or through a value-added reseller.

The card reader electronically records sales draft information, such as the card identification number, transaction date and transaction amount.

After the card and transaction information is captured, the POS device automatically connects to our network through the internet or other communication channel in order to receive authorization of the transaction.

A typical payment transaction begins when a cardholder presents a card for payment to a merchant at which time card and transaction information, such as the card identification number, transaction date and transaction amount, is captured and transmitted to our network.

The information is captured by a point-of-sale ("POS") terminal card reader or mobile device card reader, which may be sold or leased to the merchant and serviced by us, or through a POS device or ecommerce portal by one of a number of services that we offer directly or through a value-added reseller.

After the card and transaction information is captured, the POS device or ecommerce portal automatically connects to our network through the internet or other communication channel in order to receive authorization of the transaction.

For a credit card transaction, authorization services generally refer to the process in which the card issuer indicates whether a particular credit card is authentic and whether the impending transaction amount will cause the cardholder to exceed defined credit limits.

In a debit card transaction, we obtain authorization for the transaction from the card issuer through the payment network verifying that the cardholder has access to sufficient funds for the transaction amount.

As an illustration, shown below in the sponsorship model, on a $100.00 card transaction, the card issuer may fund the Member, our sponsor, (indirectly through the card network) $98.50 after retaining approximately $1.50 referred to as an interchange fee.

The card issuer seeks reimbursement of $100.00 from the cardholder in the cardholder's monthly credit card statement.

As an illustration, shown below in the sponsorship model, on a $100.00 card transaction the card issuer may fund the Member, our sponsor, (indirectly through the card network) $98.50 after retaining $1.50 referred to as an interchange fee.

The card issuer would seek reimbursement of $100.00 from the cardholder in the cardholder's monthly credit card statement.

The Member would, in turn, pay the merchant $100.00.

The net settlement after this transaction would require us to advance the Member $1.50.

After the end of the month, we would bill the merchant a percentage of the transaction amount, or merchant discount, to cover the full amount of the interchange fee and our fee from the transaction.

If our discount rate for the merchant in the above example was 2.00%, we would bill the merchant $2.00 after the end of the month for the transaction, reimburse ourselves for $1.50 in interchange fees and retain $0.50 as our fees for the transaction.

The net settlement after this transaction would require us to advance the $1.50 interchange fee to the Member.

After the end of the month, we would bill the merchant a percentage, also known as the merchant discount, of the transaction amount to cover the full amount of the interchange fee and our fee from the transaction.

Assuming the merchant discount in the above example is 2%, we bill the merchant $2.00 after the end of the month for the transaction, reimburse ourselves for $1.50 in interchange fees and retain $0.50 as our fee for the transaction.

Under some arrangements, we remit the net amount of $98.00 to the merchant, rather than funding the full $100.00 and subsequently billing the merchant at the end of the month.

Discount rates vary based on negotiations with merchants and the economic characteristics of transactions.

Discount rates vary based on negotiations with merchants and the economic characteristics of transactions and take many forms, such as interchange plus our fee or a bundled rate that includes all fees.

Interchange rates also vary based on the economic characteristics of individual transactions.

Accordingly, our fee per transaction varies across our merchant base and is subject to change based on changes in discount rates and interchange rates.

Our profit on the transaction reflects the fee received less payment network fees and operating expenses, including systems cost to process the transaction and commissions paid to our sales force or ISO.

Our profit on a transaction reflects the merchant discount less interchange fees, payment network fees and operating expenses, including systems costs to process the transaction and commissions paid to our sales force or external partner.

Payment network fees are charged by the card brands, in part, based on the value of transactions processed through their networks.

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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 B2B payment processes for businesses and governments.

In addition, we provide flexible commercial payments, accounts payable and electronic payment alternatives 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.

Issuer Solutions segment revenues are derived from long-term processing contracts with financial institutions and other financial services providers.

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

Issuer Solutions segment revenues are primarily derived from long-term processing contracts with financial institutions and other financial services providers.

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 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 and parts of Europe 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.

The Business and Consumer Solutions segment has an extensive distribution and reload network comprised of financial service centers and other retail locations throughout the United States, and is a program manager for FDIC-insured depository institutions that provide the services that the Business and Consumer Solutions segment develops, promotes and distributes.

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.

Business and Consumer Solutions segment revenues principally consist of fees collected from cardholders and fees generated by cardholder activity in connection with the programs that we manage.

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

Issuer Solutions segment revenues also include software subscription, licensing fees, loyalty redemption services and professional services.

Consumer Solutions Segment

Our 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 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.

The Consumer Solutions segment has an extensive distribution and reload network comprised of financial service centers and other retail locations throughout the United States, and is a program manager for

FDIC-insured depository institutions that provide the services that the Consumer Solutions segment develops, promotes and distributes.

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

The 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.

Consumer Solutions segment revenues principally consist of fees collected from cardholders and fees generated by cardholder activity in connection with the programs that we manage.

Customers are typically charged a fee for each purchase transaction made using their cards, unless the customer is on a monthly or annual service plan, in which case the customer is instead charged a monthly or annual subscription fee, as applicable.

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

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.

(and its alliances) ("Fiserv"), Fidelity National Information Services, Inc.

On July 31, 2022, we entered into a definitive agreement to sell our consumer business, and that transaction is expected to close in the first quarter of 2023.

In each of our business segments, we compete with a large variety of companies - financial institutions, financial technology companies, traditional payment providers, new market entrants, and others, both large and small.

The markets for the services we provide are highly fragmented and competitive.

Many of these providers compete with us across our segments, markets and geographies.

Some of these competitors possess greater financial, sales and marketing resources than we do.

We expect each of our segments to become more competitive over time, as advances in technology enable new entrants, barriers to entry fall and existing providers expand their services, both operationally and geographically.

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

In the United States, we compete with a large number of providers, including but not limited to Fiserv, Inc.

("Fiserv"), Fidelity National Information Services, Inc.

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

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

Bancorp, Bank of America Merchant Services, Wells Fargo Merchant Services, Toast, Inc., Stripe, Inc., Shopify Inc.

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.

While these are our primary competitors in the merchant acquiring space, our vertically focused businesses in the United States compete with numerous other providers in their respective verticals.

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.

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.

We compete outside the U.S.

with financial institutions in the markets in which we operate, as well as both large providers (such as FIS, Worldline, Nexi) and new entrants (such as Adyen, Block and Stripe).

We have seen competition internationally increase and expect that trend to continue 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, B2B providers, and various other firms that deliver services to payment card issuers in the markets we serve, as well as financial institutions who provide such services in-house.

Our competitors in this segment include, but are not limited to Fiserv, FIS, Marqeta, Nexi, Worldline, i2c, Bill.com, AvidExchange, Billtrust, Adyen and Stripe.

We expect the number of competitors in this segment to continue to expand.

Our 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, 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.

See the section titled “Risk Factors - Risks Related to Our Business Model and Operations” for further information on the competitive and continuously evolving markets we serve.

Safeguarding Our Business

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.

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.

We may have responsibility to the card networks, financial institutions, and in some instances, our merchants, ISOs and/or individuals, for our failure or the failure of our associated third parties (as applicable) to protect this information.

We are subject to cyber security and information theft risks in our operations, which we seek to manage through cyber and information security programs, training and insurance coverage.

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.

We may have responsibility to the card networks, financial institutions, and in some instances, our merchants, ISOs and/or individuals, for our failure or the failure of our associated third-party service providers (as applicable) to protect this information.

We are subject to cybersecurity and information theft risks in our operations, which we seek to manage through cyber and information security programs, training and insurance coverage.

To strengthen our security and cyber defenses, we continue to deploy multiple methods at different layers to defend our systems against misuse, intrusions and cyberattacks and to protect the data we collect.

Further, we work with information security and forensics firms and employ advanced technologies to help prevent, investigate and address issues relating to processing system security and availability.

Furthermore, we work with information security and forensics firms and employ advanced technologies to help prevent, investigate and address issues relating to processing system security and availability.

We also collaborate with third parties, regulators and law enforcement, when appropriate, to resolve security incidents and assist in efforts to prevent unauthorized access to our processing systems.

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

Our overall workforce strategies are developed and managed by our Chief People Officer, who reports to the CEO.

We regularly engage with our team members through a variety of forums, including periodic surveys, to help us understand their perspectives related to workplace culture, engagement, talent management and well-being and to inform our diversity, equity and inclusion ("DEI") strategies and initiatives.

The results of these interactions are leveraged to further develop our talent management initiatives.

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

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 and leadership programs, promoting team members’ wellness and safety, providing flexible work arrangements and offering comprehensive and competitive benefits packages, including paid parental leave, team member assistance and savings and retirement programs.

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

Over the past several years, we have also made significant investments in modernizing our operating environments and technologies to include cloud-based systems and collaboration tools that support day-to-day engagement and execution.

Health and Well-being

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, 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 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.

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

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, including employee education and assistance programs that focus on physical, financial, social and emotional resources.

Diversity, Equity and Inclusion

We remain committed to addressing the ever-changing needs of our team members and finding new ways to improve our culture.

Our DEI strategy reflects the shift in our current workforce, changing business landscape and potential talent and is anchored by three pillars:

Leadership Accountability, Inclusive Capability and Engagement.

We have also broadened our focus to include social and racial equity in our conversations, and equip and empower our Employee Resource Group ("ERG") leaders with the right tools and training to lead their networks, including the launch of “Inclusion 365,” an initiative to reinforce inclusion and belonging throughout our workforce.

These efforts are further supported by our Chief Diversity Officer who leads a dedicated and specialized team designated to advance DEI within our Company.

Our Compensation Committee assists the Board in overseeing the Company’s DEI initiatives.

Employee 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 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 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.

In addition, we are subject to rules promulgated by the various payment networks, including American Express, Discover, Interac, Mastercard and Visa.

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

Government Regulation

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.

Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain.

These regulations and laws involve a variety of matters, including privacy and information security, data and personal information protection, money-transmission and payment instrument laws and regulations, consumer protection laws, anti-money laundering and anti-bribery laws, tax, environmental sustainability (including climate change), human rights and security regulations.

In addition, we are subject to rules promulgated by the various payment networks, including Nacha, American Express, Discover, Interac, Mastercard and Visa.

Set forth below is a brief summary of some of the significant laws and regulations that apply to us.

These descriptions are not exhaustive, and these laws, regulations and rules frequently change and are increasing in number.

We are currently in compliance with existing legal and regulatory requirements and do not expect that maintaining compliance with these regulations will have a material adverse effect on our capital expenditures, earnings or competitive and financial positions.

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

We are currently in compliance in all material respects with applicable existing legal and regulatory requirements and do not expect that maintaining compliance with these regulations will have a material adverse effect on our capital expenditures, earnings or competitive and financial positions.

For additional information about government regulation and laws applicable to our business and the potential risks associated with future changes in laws or regulations, see "Item 1A - Risk Factors" of this Annual Report on Form 10-K, including the risk factor titled "Legal, Regulatory Compliance and Tax Risks."

Dodd-Frank Act

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The prohibition on network exclusivity has not significantly affected our ability to pass on network fees and other costs to our customers, nor do we expect it to in the future.

The Dodd-Frank Act also created the Consumer Financial Protection Bureau ("CFPB"), which has assumed responsibility for enforcing federal consumer protection laws, and the Financial Stability Oversight Council, which has the authority to determine whether any nonbank financial company, such as us, should be supervised by the Board of Governors of the Federal Reserve System (the "Federal Reserve") on the ground that it is "systemically important" to the U.S.

authority to determine whether any nonbank financial company, such as us, should be supervised by the Board of Governors of the Federal Reserve System (the "Federal Reserve") on the ground that it is "systemically important" to the U.S.

financial system.

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Money Transmission, Sale of Checks and Payment Instrument Laws and Regulations

Our Business and Consumer Solutions segment is subject to money transfer and payment instrument licensing regulations.

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.

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.

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 Consumer Solutions segment is subject to money transfer and payment instrument licensing regulations and has 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.

Our 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.

Our 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.

Banking Laws and Regulations

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.

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 we are also subject to supervision or examination, as may be applicable, by various state and international 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

Privacy and Data Protection Regulation

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.

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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.

Compliance with the data protection regulations applicable to us or our customers requires increasing resources devoted to monitoring changes and developing solutions for our affected businesses.

Maintaining compliance over time could require substantive technology infrastructure and process changes across many of the Company’s businesses.

Noncompliance with the European Union General Data Protection Regulation ("GDPR"), the California Privacy Rights Act (“CPRA”), U.S.

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) or similar regulations could lead to substantial regulatory fines and penalties, or damages from private causes of action.

Evolving data localization requirements may affect how we provide services to customers in regions like the European Union.

Additionally, evolving sector-specific regulations that affect the payments industry may introduce overlap or conflict with data privacy regulations, and these conflicts in regulatory requirements may affect our operations.

We also maintain processes to ensure that third parties upon whom we rely to facilitate or enable our business activities are similarly in compliance with applicable regulations.

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.

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

These regulations could limit our ability to use and share personal or other data and increase costs related to compliance.

In addition, emerging technologies including innovations in machine learning and artificial intelligence have triggered new waves of regulation targeted to the specific risks anticipated from these technologies.

As our portfolio of services evolves, we may offer more services outside of our traditional business-to-business interaction context.

As we interact directly with consumers, in conjunction with our existing customers and partners or directly on our own behalf, our compliance obligations under privacy regulations may expand.

Anti-Money Laundering, Anti-Bribery and Sanctions Regulations

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The Financial Crimes Enforcement Network of the U.S.

Department of the Treasury ("FinCEN") has issued a rule regarding the applicability of the Bank Secrecy Act's anti-money laundering provisions to "prepaid access programs." This rulemaking clarifies the anti-money laundering obligations for entities, such as our Business and Consumer Solutions business and its distributors, engaged in the provision and sale of prepaid access devices like our GPR prepaid cards.

Department of the Treasury ("FinCEN") has issued a rule regarding the applicability of the Bank Secrecy Act's anti-money laundering provisions to "prepaid access programs." This rulemaking clarifies the anti-money laundering obligations for entities, such as our Consumer Solutions business and its distributors, engaged in the provision and sale of prepaid access devices like our GPR prepaid cards.

Certain of our operating subsidiaries have registered with FinCEN as a money services business.

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The use of payroll card programs as a means for an employer to remit wages or other compensation to its employees or independent contractors is governed by state labor laws related to wage payments, which laws are subject to change.

The paycard portion of our Business and Consumer Solutions segment includes payroll cards and convenience checks and is designed to allow employers to comply with applicable state wage and hour laws.

The paycard portion of our business includes payroll cards and convenience checks and is designed to allow employers to comply with applicable state wage and hour laws.

Most states permit the use of payroll cards as a method of paying wages to employees, either through statutory provisions allowing such use or, in the absence of specific statutory guidance, the adoption by state labor departments of formal or informal policies allowing for their use.

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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

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.

Environmental, Social and Governance ("ESG")

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.

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), which is available in the investor relations section of our website at www.globalpaymentsinc.com .

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, and our Global Responsibility Report (which is not incorporated herein) 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 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