What changed in this filing

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Item 1. Business

2023-03-08 compared with 2022-03-17 · 24 added, 23 removed, 290 unchanged (14% of the section changed)

4 unchanged sentences

Our principal offices are located at 3611 Paesanos Parkway, Suite 300, San Antonio, TX 78231.

Our telephone number is (210) 249-4100.

Our website is located at www.usio.com.

Information contained on our website does not constitute part of this report.

Our telephone number is (210) 249-4100. 

We provide integrated payment processing services to merchants and businesses, including all types of Automated Clearing House, or ACH, processing, credit, prepaid card and debit card-based processing services.

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We also offer prepaid cards to consumers for use as a tool to stay on budget, manage allowances and share money with family and friends.

Usio Card platform supports Apple Pay®, Samsung Pay™

Usio's Card platform supports Apple Pay®, Samsung Pay™

and Google Pay™.

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Through our Akimbo Now technology we offer a comprehensive money disbursement platform that allows businesses to pay their contractors, employees, or other recipients by choosing between a prepaid debit Mastercard, real-time deposit to a checking account, traditional ACH, direct deposit or paper check.

With the acquisition of the assets of Information Management Solutions, LLC in December 2020, we now offer additional services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions.  This product offering provides an outsourced solution for document design, print and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies.

With the acquisition of the assets of Information Management Solutions, LLC, or IMS, in December 2020, we also offer additional services relating to electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions.  This product offering provides an outsourced solution for document design, print and electronic delivery to potential customers and entities looking to reduce postage costs and increase efficiencies.

We provide integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and transaction processing via the ACH network.

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Output Solutions : 

On December 15, 2020, we acquired the assets of Information Management Solutions, LLC ("IMS") in the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions.  Through the acquisition, we acquired new customers and their sales force.

On December 15, 2020, we acquired the assets of IMS and entered into the business of electronic bill presentment, document composition, document decomposition and printing and mailing services serving hundreds of customers representing a wide range of industry verticals, including utilities and financial institutions.  Through the acquisition, we acquired new customers and their sales force.

We bought an existing portfolio of customers with a significant revenue stream.

This acquisition increased our ability to grow new revenue streams and allows us to reenter the electronic bill presentment and payment revenue stream.

The first full year of operations from the Output Solutions unit achieved $14.8 million in top line revenue in 2021, exceeding expectations.

The success of this new business line will continue to depend on our ability to realize the anticipated growth opportunities and we cannot provide any assurance that we will be able to realize these opportunities.

Our websites are www.usio.com, www.payfacinabox.com, www.ficentive.com, www.akimbocard.com, and www.usiooutput.com.

Information contained on our websites does not constitute part of this annual report.

Information contained on our websites do not constitute part of, and are not incorporated by reference into, this annual report.

Industry Background

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In 2000, in contrast, the number of ACH payments was 2.1 billion compared to 42.6 billion check payments.

In 2020, card payments were the most used method of noncash payments by number, exceeding ACH and check, whereas by value, ACH exceeds card and check.

In 2020, card payments were the most used method of noncash payments by number, exceeding ACH and check, whereas by value, ACH exceeded card and check.

Card payments continued to show robust growth from 2015 to 2018, collectively increasing 8.9% per year by number and 8.6% by value up from the 6.8% yearly rate of increase in the 2012 to 2015.

1 unchanged sentence

Some of the decline of in-person card payments was offset by remote payments late in 2020.

Since 2015, total card payments - the sum of credit card, non-prepaid debit card and prepaid debit card payments - increased 29.7 billion to reach 131.2 billion payments by number and increased $1.56 trillion to reach $7.08 trillion by value in 2018.

From 2015 to 2018, total card payments - the sum of credit card, non-prepaid debit card and prepaid debit card payments - increased 29.7 billion to reach 131.2 billion payments by number and increased $1.56 trillion to reach $7.08 trillion by value in 2018.

Within card payments, there was a surge in prepaid and non-prepaid debit card payments by number relative to credit card payments from 2015 to 2018, a change from previous reporting periods.

9 unchanged sentences

Card payments include general-purpose and private-label versions.

Prepaid debit card payments include general-purpose, private-label, and electronic benefits transfer (EBT) versions.

Prepaid debit card payments include general-purpose, private-label, and electronic benefits transfer, or EBT, versions.

Estimates for prepaid debit card payments are not displayed for 2000 and 2003 because only EBT was collected.

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Most of our merchant customers have signed long-term contracts, generally with three-year terms, that provide for volume-based transaction fees.

Our merchant accounts increased 1% to 5,039 customers at December 31, 2021 from 4,984 customers at December 31, 2020.

Our merchant accounts increased 11% to 5,601 customers at December 31, 2022 from 5,039 customers at December 31, 2021.

Our customers are geographically dispersed throughout the United States.

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Furthermore, we believe we present a competitive distinction through our internal technology to provide a single integrated payment warehouse that consolidates, processes, tracks and reports all payments regardless of payment source or channel.

We also believe our customized technology solutions and high level of service provides a competitive advantage, particularly for smaller businesses that do not have large internal technology capabilities or the ability to comply with payment security regulations.

We also believe our customized technology solutions and high level of service provide a competitive advantage, particularly for smaller businesses that do not have large internal technology capabilities or the ability to comply with payment security regulations.

Our prepaid card offerings are competitive due to our proprietary systems and our ability to create and establish corporate-branded card programs in shorter time frames than our competitors.

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and their respective designs.

Some of our material websites are www.usio.com, www.payfacinabox.com, www.ficentive.com, www.akimbocard.com, and www.usiooutput.com. 

The inclusion of these website addresses in this Annual Report do not include or incorporate by reference the information on or accessible through these websites, and the information contained on or accessible through these websites should not be considered as part of this annual report on Form 10-K.

We rely on a combination of copyright, trademark and trade secret laws, employee and third-party nondisclosure agreements, and other intellectual property protection methods to protect our services and related products.

On January 11, 2008, we executed an agreement to sell selected patents and patent applications, including U.S.

7,021,530, to PCT Software Data, LLC for net proceeds of approximately $750,000.

The patents and patent applications sold relate to bill payments made with debit and stored value cards.

We retained a worldwide, non-exclusive license under the patents for use with all current and future customers.

Government Regulation

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The Dodd-Frank Act regulates the fees charged or received by issuers for processing debit transactions and the transaction routing options available to merchants.

The Dodd-Frank Act also established the Consumer Financial Protection Bureau (CFPB) to regulate consumer financial services, including many services offered to our customers.

These rules clarify the regulatory prepaid landscape for consumer access to disclosures, fees and statements, error resolution, limited liability and overdrafts.

The Dodd-Frank Act also established the Consumer Financial Protection Bureau or CFPB to regulate consumer financial services, including many services offered to our customers.

These rules clarify the prepaid regulatory landscape for consumer access to disclosures, fees and statements, error resolution, limited liability and overdrafts.

Additionally, the Durbin Amendment to the Dodd-Frank Act provided that interchange fees that a card issuer or payment network receives or charges for debit transactions will now be regulated by the Federal Reserve and must be “reasonable and proportional”

35 unchanged sentences

The programs in place to process these products generally may be modified by the payment networks at their discretion and such modifications could also impact us, financial institutions, merchants and others.

Environmental Laws

We are subject to a variety of federal, state, local and foreign environmental, health and safety laws and regulations governing, among other things, the generation, storage, handling, use and transportation of hazardous materials;

the emission and discharge of hazardous materials into the environment;

and the health and safety of our employees.

We have incurred and expect to continue to incur costs to maintain or achieve compliance with environmental, health and safety laws and regulations. 

To date, these costs have not been material to the Company.

As of December 31, 2022, we had 117 full-time employees.

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Securities and Exchange Commission.

Our website and the information contained therein or connected thereto are not intended to be incorporated into this annual report on Form 10-K.

You may also read and copy any materials we file with the SEC.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Interested persons can view such materials without charge under the "Investor Relations" section and then by clicking "Financials" on the Company's website, www.usio.com.

The inclusion of website addresses in this Annual Report does not include or incorporate by reference the information on or accessible through these websites, and the information contained on or accessible through these websites should not be considered as part of this annual report on Form 10-K.

You may also read and copy any materials we file with or furnish to the SEC.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at https://www.sec.gov.

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