What changed in this filing

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Item 1A. Risk Factors

2021-02-12 compared with 2020-02-14 · 33 added, 47 removed, 174 unchanged (31% of the section changed)

institutions and non-governmental organizations (“NGOs”), and end users other than those we have traditionally worked with.

payments markets, we are continually involved in diversifying our integrated products and services.

These efforts carry the risks associated with any diversification initiative, including cost overruns, delays in delivery and performance problems.

These projects also carry risks associated with working with different types of customers, for example organizations such as corporations that are not financial institutions and non-governmental organizations (“NGOs”), and end users other than those we have traditionally worked with.

These differences may present new operational challenges in the development and implementation of our new products or services.

Our failure to render these integrated products and services could make our other integrated products and services less desirable to customers, or put us at a competitive disadvantage.

In addition, if there is a delay in the implementation of our products or services or if our products or services do not perform as anticipated, we could face additional regulatory scrutiny, fines, sanctions or other penalties, which could materially and adversely affect our overall business and results of operations, as well as negatively impact our brand and reputation.

These new customers are typically less regulated, and as a result, enhanced infrastructure and monitoring is required.

Our failure to deliver these integrated products and services could make our other integrated products and services less desirable to customers, or put us at a competitive disadvantage.

In addition, if there is a delay in the implementation of our products or services or if our products or services do not perform as anticipated, or we are unable to adequately anticipate risks related to new types of customers, we could face additional regulatory scrutiny, fines, sanctions or other penalties, which could materially and adversely affect our overall business and results of operations, as well as negatively impact our brand and reputation.

Information Security and Service Disruptions

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These threats include cyber-attacks such as computer viruses, malicious code, phishing attacks or information security breaches and could lead to the misappropriation of consumer account and other information and identity theft.

The advent of the global COVID-19 pandemic has resulted in a significant rise in these types of threats due to a significant portion of our workforce working from home in a mostly remote environment.

Our operations rely on the secure processing, transmission and storage of confidential, proprietary and other information and technology in our computer systems and networks, as well as the systems of our third-party providers.

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Our risk and exposure to these matters remain heightened because of, among other things, the evolving nature of these threats, our prominent size and scale and our role in the global payments and technology industries, our plans to continue to implement our digital and mobile channel strategies and develop additional remote connectivity solutions to serve our customers and account holders when and how they want to be served, our global presence, our extensive use of third-party vendors and future joint venture and merger and acquisition opportunities.

As a result, information security and the continued development and enhancement of our controls, processes and practices designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority for us.

As a result, information security and the continued development and enhancement of our controls, processes and practices designed to protect our systems, computers, software, data and networks

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from attack, damage or unauthorized access remain a priority for us.

As cyber-threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.

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Damage to our reputation or that of our brands resulting from an account data breach of either our systems or the systems of our customers, merchants and other third parties could decrease the use and acceptance of our integrated products and services.

Such events could also slow or reverse the trend toward

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electronic payments.

Such events could also slow or reverse the trend toward electronic payments.

In addition to reputational concerns, the cumulative impact of multiple account data compromise events could increase the impact of the fraud resulting from such events by, among other things, making it more difficult to identify consumers.

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If one of our service providers fails to provide the communications capacity or services we require, as a result of natural disaster, operational disruptions, terrorism, hacking or any other reason, the failure could interrupt our services.

Although we maintain a business continuity program to analyze risk, assess potential impacts, and develop effective response strategies, we cannot ensure that our business would be immune to these risks, because of the intrinsic importance of our switching systems to our business, any interruption or degradation could adversely affect the perception of the reliability of products carrying our brands and materially adversely affect our overall business and our results of operations.

Although we maintain a enterprise resiliency program to analyze risk, assess potential impacts, and develop effective response strategies, we cannot ensure that our business would be immune to these risks, because of the intrinsic importance of our switching systems to our business, any interruption or degradation could adversely affect the perception of the reliability of products carrying our brands and materially adversely affect our overall business and our results of operations.

Stakeholder Relationships

Losing a significant portion of business from one or more of our largest financial institution customers could lead to significant revenue decreases in the longer term, which could have a material adverse impact on our business and our results of operations.

Most of our financial institution customer relationships are not exclusive and may be terminated by our customers.

Losing a significant portion of business from one or more of our largest customers could lead to significant revenue decreases in the longer term, which could have a material adverse impact on our business and our results of operations.

Most of our customer relationships are not exclusive and may be terminated by our customers.

Our customers can reassess their commitments to us at any time in the future and/or develop their own competitive services.

Accordingly, our business agreements with these customers may not reduce the risk inherent in our business that customers may terminate their relationships with us in favor of relationships with our competitors, or for other reasons, or might not meet their contractual obligations to us.

In addition, a significant portion of our revenue is concentrated among our five largest financial institution customers.

In addition, a significant portion of our revenue is concentrated among our five largest customers.

Loss of business from any of our large customers could have a material adverse impact on our overall business and results of operations.

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A significant loss of our existing revenue or transaction volumes from these customers could have a material adverse impact on our business.

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Consolidation in the banking industry could materially and adversely affect our overall business and results of operations.

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These developments could materially and adversely affect our results of operations.

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Our business significantly depends on the continued success and competitiveness of our issuing and acquiring customers and, in many jurisdictions, their ability to effectively manage or help manage our brands.

While we work directly with many stakeholders in the payments system, including merchants, governments and large digital companies and other technology companies, we are, and will continue to be, significantly dependent on our relationships with our issuers and acquirers and their respective relationships with account holders and merchants to support our programs and services.

While we work directly with many stakeholders in the payments system, including merchants, governments, fintechs and large digital companies and other technology companies, we are, and will continue to be, significantly dependent on our relationships with our issuers and acquirers and their respective relationships with account holders and merchants to support our programs and services.

Furthermore, we depend on our issuing partners and acquirers to continue to innovate to maintain competitiveness in the market.

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merchant litigations.

Some merchants are increasingly asking regulators to review and potentially regulate our own network fees, in addition to interchange.

See our risk factor in “Risk Factors – Other Regulation” in this Part I, Item 1A with respect to payments industry regulation, including interchange fees.

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Additionally, if the rate of merchant acceptance growth slows our business could suffer.

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Our work with governments exposes us to unique risks that could have a material impact on our business and results of operations.

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A violation and subsequent judgment or settlement under these laws could subject us to substantial monetary penalties and damages and have a significant reputational impact.

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• Working or contracting with governments, either directly or via our financial institution customers, can subject us to heightened reputational risks, including extensive scrutiny and publicity, as well as a potential association with the policies of a government as a result of a business arrangement with that government.

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Revenue from switching cross-border and currency conversion transactions for our customers fluctuates with the levels and destinations of cross-border travel and our customers’ need for transactions to be converted into their base currency.

Cross-border activity may be adversely affected by world geopolitical, economic, weather and other conditions.

These include the threat of terrorism and outbreaks of flu, viruses and other diseases, as well as major environmental events (including those related to climate change).

Cross-border activity has, and may continue to be, adversely affected by world geopolitical, economic, health, weather and other conditions.

These include COVID-19, as well as the threat of terrorism and separate outbreaks of flu, viruses and other diseases, as well as major environmental events (including those related to climate change).

The uncertainty that could result from such events could decrease cross-border activity.

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In each case, decreased cross-border activity could decrease the revenue we receive.

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Our operations as a global payments network rely in part on global interoperable standards to help facilitate safe and simple payments.

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In addition, some of the revenue we generate outside the United States is subject to unpredictable currency fluctuations including devaluation of currencies where the values of other currencies change relative to the U.S.

dollar strengthens compared

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to currencies in which we generate revenue, this revenue may be translated at a materially lower amount than expected.

dollar strengthens compared to currencies in which we generate revenue, this revenue may be translated at a materially lower amount than expected.

Furthermore, we may become subject to exchange control regulations that might restrict or prohibit the conversion of our other revenue currencies into U.S.

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The occurrence of currency fluctuations or exchange controls could have a material adverse impact on our results of operations.

The United Kingdom’s proposed withdrawal from the European Union could harm our business and financial results.

In June 2016, voters in the United Kingdom approved the withdrawal of the U.K.

from the E.U.

(commonly referred to as “Brexit”).

government triggered Article 50 of the Lisbon Treaty on March 29, 2017, which commenced the official E.U.

withdrawal process.

In January 2020, Parliament and the E.U.

approved of an agreement between the U.K.

and the E.U., and the U.K.

officially departed from the E.U.

On February 1, 2020, the U.K.

entered into a transition/implementation period, during which all E.U.

laws regulations, court decisions, trading agreements and other obligations continue to apply to the U.K.

During this period, which is set to expire on December 31, 2020, the U.K.

will negotiate additional terms.

Uncertainty over these terms could cause political and economic uncertainty in the U.K.

and the rest of Europe, which could harm our business and financial results.

Subsequent to the end of the transition/implementation period on December 31, 2020, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations in the U.K.

We, as well as our customers who have significant operations in the U.K., may incur additional costs and expenses as we adapt to potentially divergent regulatory frameworks from the rest of the E.U.

We may also face additional complexity with regard to immigration and travel rights for our employees located in the U.K.

These factors may impact our ability to operate in the E.U.

Any of these effects of Brexit, among others, could harm our business and financial results.

Brand and Reputational Impact

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From time to time, our customers may take actions that we do not believe to be in the best interests of our brands, such as creditor practices that may be viewed as “predatory”.

Moreover, adverse developments with respect to our industry or the industries of our customers or other companies and organizations with which we work may also, by association, impair our reputation, or result in greater regulatory or legislative scrutiny.

Moreover, adverse developments with respect to our industry or the industries of our customers or other companies and organizations that use our products and services (including certain legally permissible but high risk merchant categories, such as alcohol, tobacco, fire-arms and adult content) may also, by association, impair our reputation, or result in greater public, regulatory or legislative scrutiny.

We have also been pursuing the use of social media channels at an increasingly rapid pace.

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The market for key personnel is highly competitive, particularly in technology and other skill areas significant to our business.

Additionally, changes in immigration and work permit laws and regulations and related enforcement have made it difficult for employees to work in, or transfer among, jurisdictions in which we have operations and could impair our ability to attract and retain qualified employees.

Additionally, changes in immigration and work permit laws and visa regulations and related enforcement have made it difficult for employees to work in, or transfer among, jurisdictions in which we have operations and could impair our ability to attract and retain qualified employees.

Moreover, as a result of the global COVID-19 pandemic, a significant portion of our workforce is working in a mostly remote environment.

This remote environment may continue after the pandemic due to potential resulting trends, and could impact the quality of our corporate culture.

Failure to attract, hire, develop, motivate and retain highly qualified and diverse employee talent, or to maintain a corporate culture that fosters innovation, creativity and teamwork could harm our overall business and results of operations.

We rely on key personnel to lead with integrity.

We rely on key personnel to lead with integrity and decency.

To the extent our leaders behave in a manner that is not consistent with our values, we could experience significant impact to our brand and reputation, as well as to our corporate culture.

Acquisitions, strategic investments or entry into new businesses could disrupt our business and harm our results of operations or reputation.

Although we may continue to evaluate and/or make strategic acquisitions of, or acquire interests in joint ventures or other entities related to, complementary businesses, products or technologies, we may not be able to successfully partner with or integrate them, despite original intentions and focused efforts.

Acquisitions, strategic investments or entry into new businesses could be impacted by regulatory scrutiny, and if successful, could disrupt our business and harm our results of operations or reputation.

As we continue to evaluate our strategic acquisitions of, or acquiring interests in joint ventures or other entities related to, complementary businesses, products or technologies, we face increasing regulatory scrutiny with respect to antitrust and other considerations.

Such scrutiny could prevent us from successfully completing such acquisitions in the future.

To the extent we do make these acquisitions, we may not be able to successfully partner with or integrate them, despite original intentions and focused efforts.

In addition, such an integration may divert management’s time and resources from our core business and disrupt our operations.

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Furthermore, we may not be able to successfully finance the business following the acquisition as a result of costs of operations, including any litigation risk which may be inherited from the acquisition.

Any acquisition or entry into a new business could subject us to new regulations with which we would need to comply.

Any acquisition or entry into a new business could subject us to new regulations, both directly as a result of the new business as well as in the other existing parts of our business, with which we would need to comply.

This compliance could increase our costs, and we could be subject to liability or reputational harm to the extent we cannot meet any such compliance requirements.

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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 1A. Risk Factors