What changed in this filing

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Item 1. Business

2026-03-18 compared with 2025-03-26 · 154 added, 73 removed, 214 unchanged (51% of the section changed)

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We will continue to look for opportunities (both internally and externally) to enhance our offerings to meet customer demands as they arise.

Since 1998, Usio has entered a number of market verticals within the payments industry in order to satisfy the growing payment needs of consumers and merchants across the United States.

Beginning with our Electronic Bill Presentment and Payment, or EBPP, product that launched the Company, we entered into the electronic funds transfer space through the Automated Clearing House, or ACH, network, developing ancillary and complementary products such as PINless debit in 2016, and Remotely Created Checks, or RCC, account validation, and account inquiry in 2019.

Since 1998, through our merchant services business lines, which now consist of Automated Clearing House, or ACH, and complementary services, credit card processing and prepaid cards, Usio has entered a number of market verticals within the payments industry in order to satisfy the growing payment needs of consumers and merchants across the United States.

Beginning with our Electronic Bill Presentment and Payment, or EBPP, product that launched the Company, we entered into the electronic funds transfer space through the ACH network, developing ancillary and complementary products such as PINless debit in 2016, and Remotely Created Checks, or RCC, account validation, and account inquiry in 2019.

These supplementary product options offer customers access to faster and more convenient payment options and tools to improve operating efficiencies.

Further, our credit card payment offering was expanded in 2017 with the development of Payment Facilitation, or PayFac, that utilizes our unique technology that allows for instant enrollment of merchants and combined our suite of payment options into an integrated platform for merchants and customers to utilize.

Further, our credit card payment offering was expanded in 2017 with the development of Payment Facilitation, or PayFac, which utilizes our unique technology that allows for instant enrollment of merchants and combined our suite of payment options into an integrated platform for merchants and customers to utilize.

Through our innovative Prepaid Debit Card platform, we offer a variety of prepaid card products such as reloadable, incentive, promotional and corporate card programs.

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This offering allows us a superior opportunity to increase our cross-selling efforts through all of our payment methods.

Throughout 2025, we enhanced our Consumer Choice product to accommodate additional methods of disbursement, such as issuing funds through PayPal and Venmo, alongside integration with the PIN4 network to allow cardless ATM withdrawals.

With the growing need for faster payment methods, we continue to invest in technology that can help us further expand our suite of payment technology.

With the rise of Real Time Payments, or RTP, we began expansion into this market vertical in 2023, which serves as an alternative to ACH payments.

As well, we continue to enhance our existing product offerings, with improvements in reporting, data management, fraud and risk monitoring, ease of access, and accelerations in client onboarding and implementation times.

With our transition to a cloud-based platform, our speed, security, and scalability in payment processing has been further expanded, allowing us to seamlessly grow as the market demands.

We also continue to enhance our existing product offerings, with improvements in reporting, data management, fraud and risk monitoring, ease of access, and accelerations in client onboarding and implementation times.

With our transition to a cloud-based platform, our speed, security, and scalability in payment processing have been further expanded, allowing us to seamlessly grow as the market demands.

In our over 25 year history, we have created a loyal customer base that relies on us for our convenient, secure, innovative and adaptive services and technology, and we have built long-standing and valuable relationships with premier banking institutions such as Fifth Third Bank, Sunrise Bank, TransPecos Bank and others.

Payment Acceptance.

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Similarly, our PINless debit product allows merchants to debit and credit accounts in real-time.

In the first half of 2025, we began, and completed, development of a new EBPP product.

This offering allows merchants to create and distribute bills to their customers that can be viewed, and paid, online through our platform and payment processing services, increasing the opportunities for cross-selling between our various business lines.

Card-Based 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.

Our UsioCard platform supports Apple Pay®, Samsung Pay™ and Google Pay™.

In our over 25+year history, we have created a loyal customer base that relies on us for our convenient, secure, innovative and adaptive services and technology, and we have built long-standing and valuable relationships with premier banking institutions such as Fifth Third Bank, Sunrise Bank, TransPecos and others.

Our UsioCard platform supports Apple Pay®, Samsung Pay™ and Google Pay™ with full mobile wallet provisioning.

In 2025 we also launched, and rolled out a new distribution strategy for our Prepaid card services, with a wearable device program.

Our prepaid cards can now be successfully loaded onto items such as watches, wristbands, belt buckles, or nearly any wearable product through the use of embedded chips.

We first demonstrated this new product in October 2025, and continue to refine the product, anticipating it will assist in enhancing our prepaid card program's marketability and diversity in the overall payment ecosystem.

Electronic and Paper Billing.

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

The success of this business line depends on our ability to realize the anticipated growth opportunities;

we cannot provide any assurance that we will be able to realize these opportunities.

Since the acquisition of substantially all of the assets of IMS, we have invested in new equipment to enhance the capacity and speed of the business unit, such as a new inserter and folder, on October 1, 2023, that was implemented over the course of 2024.

Further, in December 2024, we partnered with an outsourced presorting company, that we believe will help lower costs of postage and labor, while increasing the speed of our mail delivery services.

Usio Output Solutions, Inc., or Output Solutions, offers a unique, and complementary payment related solution to our merchant services products of ACH, credit card, and prepaid card processing, with an opportunity for enhanced cross-selling efforts.

The success of this business line depends on our ability to realize the anticipated growth opportunities, although we cannot provide any assurance that we will be able to realize these opportunities.

Further, in December 2024, we partnered with an outsourced presorting company to further automate our print and mail systems.

Despite challenges in growing revenues from Output Solutions in 2025, we have significantly reduced labor costs related to print and mail processing.

We believe this reduction has better positioned the business line to pursue and successfully generate much larger opportunities than we previously were able to through the increase in capacity and automation.

Results have already been realized, as the quantity of mail we printed and delivered in the first two months of 2026 was higher than in any other two-month period in the history of the Company.

Throughout 2025, we adopted and began implementing our "Usio One" strategy, designed to unify our brand, sales approach, and payments offerings.

Through this strategy, we are developing enhanced client onboarding features, superior customer management, improved reporting and fraud monitoring, alongside a consolidated sales and marketing team to better cross-sell our various payment methods and ancillary services.

We believe this strategy will help better position our merchant services and Output Solutions business segments to customers and the broader payments related market as a more cohesive service offering.

In turn, we anticipate being able to better leverage our resources, reduce friction in new customer acquisition, and drive more meaningful cross-selling opportunities, which we anticipate will help increase our products' stickiness and customer retention.

Success from this strategy has already been realized by our sales and client management staff through the generation of new integrations between our existing customers and our ancillary business lines.

The consolidation of our various technologies into a more seamless product continues to progress, and we anticipate that it will ultimately result in a client and customer onboarding process that enables all of our customers to automatically be enrolled in, and have access to, each of our payment acceptance and issuing products.

In turn, we expect this to eliminate the need for distinct contracts, dashboards, funding accounts, and support teams per product.

PostCredit Acquisition.

In November of 2025, we acquired substantially all of the assets of PostCredit, allowing an entry point into the expense management space.

PostCredit was a developing technology that would cater to companies looking for fund management and expense tracking that integrated with various Enterprise Resource Planning, or ERP, systems.

The Company anticipates continuing to develop this technology, while simultaneously integrating it into our existing products, opening a new sales channel to the broader market already utilizing ERPs such as Microsoft Business Dynamics and Business Central.

This would combine seamlessly with the EBPP product launched in 2025, allowing clients to send invoices, payments, manage funds, and reconcile with their various ERP platforms utilizing our payment channels.

In combination with the other efforts of our Usio One strategy, we believe we will be able to develop a central Usio Hub that further encourages and incentivizes the utilization of our products, cross-sells our corporate expense solution, and assists in retaining the deposits we hold for our customers to help maintain or grow our interest revenues.

We believe we will be able to implement phased portions of this strategy, and other PostCredit related projects, by the end of 2026.

Industry Background and Trends

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According to the triennial 2022 Federal Reserve Payments Study, or FRPS, as updated through July 27, 2023, with supplementary reporting on Cards and Alternative Payments in 2021 and 2022 released in November 2024, the estimated number of non-cash payments continue to increase at accelerated rates.

The FRPS reflects the effects of the COVID-19 pandemic which resulted in an increase of non-paper payments by 24% from 2019 through the end of 2020, and subsequent growth and recovery.

The growth of electronic commerce has made the acceptance of card-based and other electronic forms of payment a necessity for businesses, both large and small, in order to remain competitive.

The value of core noncash payments in the United States grew 9.5% per year since 2018, faster than in any previous FRPS measurement period since 2000.

This data was further supplemented by the Federal Reserve's Diary of Consumer Payment Choice, released annually, and last updated in 2025, covering statistics from 2024.

The growth of electronic commerce has made the acceptance of card-based and other electronic forms of payment crucial for businesses, both large and small, in order to remain competitive.

In 2024, cash payment use as a percentage of total payments was 14%, having declined every year since 2021, and down from 31% in 2016.

In 2024, credit and debit card payments accounted for 65% of U.S.

consumers total payments per month, up from 51% of total payments in 2018.

23% of consumer purchases and peer-to-peer payments were made remotely in 2024, a share that has increased each year since 2021 when it was 18%.

consumers made an average of 11 payments per month with a mobile phone in 2024, up from four payments per month in 2018.

The value of core noncash payments in the United States grew 9.5% per year from 2018 through 2021, faster than in any previous FRPS measurement period since 2000.

The number of core non-cash payments, comprising debit card, credit card, ACH, and check payments, reached 204.5 billion in 2021, an increase of 30.7 billion from 2018.

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In 2022, remote payments represented 36.2% of the total number of card payments, down slightly versus the 37.7% of total card payments at the end of 2020.

This decline representing the recovery from the COVID-19 pandemic.

This decline represented the recovery from the COVID-19 pandemic.

Chip authenticated payments accounted for 87.5% of in-person GP card payments in 2022, compared to 75.2% in 2020, while 29.1% used chip and PIN, and 19.7% were contactless.

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Mobile wallet payments continued to exhibit strong growth, reaching 14.4 billion transactions in 2022, up from 2.9 billion in 2018.

2024 Survey and Diary of Consumer Payment Choice.

2022 Federal Reserve Payments Study & 2023 annual Supplement.

Figure 1 (below) illustrates the overall growth in key non-cash metrics since the Federal Reserve Payments Study was first reported for the year 2000 and reflects the acceleration of growth in recent years.

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2022 Federal Reserve Payments Study & 2023 annual Supplement.

Figure 3 (below) illustrates the overall percentage share of payment instrument use for all payments since 2016 and reflects the increasing share of non cash payment each year.

2024 Survey and Diary of Consumer Payment Choice.

We believe that the electronic payment processing industry will continue to benefit from the following trends:

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More consumers are beginning to use card-based and other electronic payment methods for purchases at an earlier age.

These consumers have witnessed the wide adoption of card products, technology innovations such as mobile phone payment applications, widespread adoption of the internet and a significant increase in card not present transactions and on-line shopping during COVID-19, that subsequently remained at levels higher than pre 2020.

These consumers have witnessed the wide adoption of card products, technology innovations such as mobile phone payment applications, widespread adoption of the internet and a significant increase in card not present transactions and on-line shopping during COVID-19, which subsequently remained at levels higher than prior to 2020.

As younger consumers comprise an increasing percentage of the population and as they enter the work force, we expect purchases using electronic payment methods will become a larger percentage of total consumer spending.

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Census Bureau, estimated retail e-commerce sales for 2024 were estimated at $1,192.6 billion, an increase of approximately 8.1% from 2023, and e-commerce sales in 2024 accounted for 16.1% of total sales, compared to 15.3% in 2023.

We believe that our success in 2026 and beyond will continue to depend in large part on our ability to (a) scale recurring revenues and deepen partner relationships, (b) expand our product offerings, (c) pursue disciplined, accretive opportunities, (d) enhance shareholder value via operational execution and capital allocation, and (e) assimilate current and future acquisitions of companies and customer portfolios.

We will continue to invest in our sales force and technology platforms to drive revenue growth.

In particular, we are focused on growing our ACH merchants, adding new software integrators, and growing our electronic bill presentment, document composition, document decomposition, printing and mailing services business while providing incremental services to existing merchants.

In addition to our near-term growth opportunities, we are focused on leveraging and optimizing the infrastructure of our business to enable expansion of our payment processing and mail and printing capabilities without significantly increasing our operating costs.

We continue to seek ways to grow revenue, and net new client implementations and onboards occur regularly due to our ability to address the needs of our market.

Growing Revenues.

Revenue growth remains a consistent focus for the Company, as we strive to achieve expanded scale, and establish a strong reputation within the financial technologies space.

This growth assists us in maintaining our diversified offerings and remaining relevant in the payments ecosystem by developing payment platforms that address the current needs of our marketplace.

In 2025, our revenues increased 3% to $85.4 million, as compared to $82.9 million in 2024, due primarily to strong growth in our ACH and complementary services line of business, though offset in large part by declines in our prepaid card services line of business and interest revenues.

The strong growth in our ACH and complementary services line of business was due to organic growth from existing customers and net new client implementations and onboarding.

The decrease in our prepaid card services revenues was due to declines from one of our key prepaid card programs, as its business was impacted by the loss of a key customer that made significant contributions to Usio revenues in 2024.

Lower interest revenues were driven by interest rates and interest bearing deposits declining versus the prior year.

Expand our product offerings.

We maintain a committed focus on the ever changing technological landscape within the payments ecosystem.

We believe that regularly attending payments focused conferences, webinars, and training sessions, alongside our consistent communication with customers and clients, enables us to be informed of the most current, and future, applications and evolutions of financial technologies.

We believe that this allows us to implement new feature functionality to existing products and introduce new payment methods.

This has led to our evolution from being an EBPP provider at the Company's founding, to the diverse payment provider we are today, with offerings such as ACH processing, PINless debit, RTP, prepaid card issuance, and credit card processing.

In the digital marketplace, it is especially crucial to match the need for diversified payment options in an increasingly ecommerce driven world.

Pursue disciplined, accretive opportunities.

Acquisitions have been a key element in our growth-focused strategy, both by adding net new customers and by enhancing our suite of payment technologies.

This is evident through our acquisitions of Akimbo Financial, Inc., Singular Payments, and IMS, which allowed us to introduce new offerings such as prepaid card issuance, PayFac, and electronic bill presentment, all of which represent significant portions of our current revenues.

The Company continually evaluates the markets for opportunities to acquire or partner with accretive opportunities that align with our core competencies.

In 2025, we acquired the assets of PostCredit, which we believe once again represents an opportunity to enhance our existing products and to introduce us as a new competitor in the expense management market vertical.

We cannot assure you that we will be able to complete any acquisitions in the future.

Enhancing shareholder value via operational execution and capital allocation.

By appropriately managing our expenses (which are discussed under "- Results of Operations - Selling, General and Administrative Expenses" below), we believe we can achieve better economies of scale, and drive revenue growth.

We believe that carefully evaluating our existing selling, general and administrative, or SG&A, expenses, and balancing them against the need for client implementation and support, together with our technology staff driving product innovation, will guide our operational strategies while maintaining a focus on efficiencies and profitability.

SG&A expenses were up in the year, at $18.4 million as compared to $16.7 million in the prior year.

The increase in SG&A expense was primarily due to increases in salary alongside increases in network infrastructure, travel expenditures, professional fees, and other various general expenses.

For more information, see "-Results of Operations - Selling, General and Administrative Expenses" below.

Assimilating Current and Future Acquisitions.

The assimilation of our previous acquisitions has been critical in both the retention of purchased assets and their growth, through cross-selling and implementation into our broader infrastructure, which allows for increased diversity of offerings and support.

Successfully assimilating acquisitions remains a crucial priority for the success of the Company.

The recent acquisition of PostCredit represents an especially critical component of this strategy, and may require significant time investment and capital expenditure to fully implement.

We cannot assure you that we will be able to successfully assimilate new and future acquisitions.

Products and Services

Our suite of payment solutions is driven by a sophisticated infrastructure that merges our own technology with strategic alliances, offering secure, scalable, and resilient payment processing services.

Leveraging the latest in cloud computing and cybersecurity, including Microsoft Azure's robust security features, we ensure the protection of data transmissions and transactions.

Leveraging the latest in cloud computing and cybersecurity, including Microsoft Azure's robust security features, we work to ensure the protection of data transmissions and transactions.

Our adoption of Azure's hub-spoke architecture and other cutting-edge technologies supports enhanced performance and security, facilitating seamless integrations with third-party processors and offering tailored payment services to meet the specific requirements of our clients.

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Electronic Billing .

Following the acquisition of substantially all of the assets of IMS, we've enhanced and expanded our services to include electronic bill presentment and comprehensive document management solutions, catering to a wide array of industries.

Following the acquisition of substantially all of the assets of IMS, we have enhanced and expanded our services to include electronic bill presentment and comprehensive document management solutions, catering to a wide array of industries.

Our state-of-the-art digital printing capabilities, combined with our status as a seamless mailer with USPS, enable us to meet high-volume demands efficiently, ensuring we remain at the forefront of printing and mailing services.

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Further, in December 2024, we partnered with an outsourced presorting company, that we believe will help lower costs of postage and labor, while increasing the speed of our mail delivery services.

Further, in December 2024, we partnered with an outsourced presorting company to further automate our print and mail systems.

Despite challenges in growing revenues from Output Solutions in 2025, we have significantly reduced labor costs related to print and mail processing.

Results have already been realized, as the quantity of mail we printed and delivered in the first two months of 2026 was higher than in any other two-month period in the history of the Company.

The Company capitalizes the costs associated with software developed or purchased for internal use.

The software is capitalized when both the preliminary project stage is complete and the software being developed is placed-in service.

Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project, and (iii) interest costs incurred, when material, while developing internal-use software.

The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose.

For the years ended December 31, 2025 and December 31, 2024, the Company capitalized $1,102,368 and $796,004, respectively.

Relationships with Sponsors and Processors

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In order to provide payment processing services for ACH transactions, we must maintain a relationship with an Originating Depository Financial Institution, or ODFI, in the ACH network because we are not a bank and therefore, we are not eligible to be an ODFI.

For the ODFI portion of our ACH business, we have entered into agreements with the North American Banking Company, or NABC, Metropolitan Commercial Bank and TransPecos Banks.

For the ODFI portion of our ACH business, we have entered into agreements with the North American Banking Company, or NABC, and TransPecos Bank.

We are financially liable for all fees, fines, chargebacks, and losses related to our ACH processing merchant customers.

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We estimate our potential loss for chargebacks by performing a historical analysis of our charge-back loss experience with similar merchants and considering other factors that could affect that experience in the future, such as the types of card transactions processed and nature of the merchant relationship with their consumers.

We are currently sponsored by Evolve Bank & Trust and TransPecos Bank in order to access certain regional debit networks.

Through these sponsorships, we created a new service in late 2016 to provide both the issuance of real time credits and debits to a debit card holder via a regional network without using a PIN.

We are currently sponsored by TransPecos Bank in order to access certain regional debit networks.

Through this sponsorship, we provide both the issuance of real time credits and debits to a debit card holder via a regional network without using a PIN.

Regional networks are not affiliated with major credit card associations and operate independently.

Through our sponsorships with Evolve Bank & Trust, and TransPecos Bank, we are financially liable for all fees, fines, chargebacks and losses related to our PINless debit card processing for our merchant customers.

Through our sponsorship with TransPecos Bank, we are financially liable for all fees, fines, chargebacks and losses related to our PINless debit card processing for our merchant customers.

We may also require cash deposits and other types of collateral from certain merchants to mitigate any such risk.

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We also market and sell our prepaid card program directly to government entities, corporations and to consumers through the Internet.

We have recently undertaken a major initiative to package and cross-sell of our platform of payment options across our portfolio of merchants.

We have recently undertaken a major initiative to package and cross-sell our platform of payment options across our portfolio of merchants.

As a part of this major initiative, we will continue to analyze our sales and marketing efforts to optimize productivity, increase sales force effectiveness, broaden our reach through reseller initiatives and advantageous alliances and effectively optimize sales and marketing expenses while meeting our revenue and profit objectives.

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This service, which we began with the acquisition of substantially all of the assets of IMS in December 2020, allows us to cross-sell existing service offerings to our customers.

Since December 2024, we have pursued the “One Usio” strategy in order to increase the integration of all of our various product offerings so that we approach the market as a unified force with a portfolio of capabilities that can meet our customer’s various electronic payment and associated needs.

Throughout 2025, we pursued the “Usio One” strategy in order to increase the integration of all of our various product offerings so that we approach the market as a unified force with a portfolio of capabilities that can meet our customers’ various electronic payment and associated needs.

This strategy is designed to sell multiple, complementary Usio products to an increasing number of clients who benefit from the synergies and efficiencies that arise from consolidating their relationship.

We have already seen the successful cross-selling of existing client relationships with this improved organizational structure, with more well-rounded and knowledgeable staff throughout our organization able to manage clients and products that previously would have required the intervention of a separate team.

We continue to build out the onboarding, funding, and management technology that will drive our consolidated platform in order to further accelerate our ability to capture an increased share of our clients' business.

Elements of this strategy include:

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enhanced security and fraud protection through the development of new fraud detection tools, and a unified risk and compliance team.

Our customers are consumers, merchants, and businesses that use our Automated Clearing House and/or card-based processing services in order to provide their consumers with the ability to pay for goods and services without having to use cash or a paper check.

Our customers are consumers, merchants, and businesses that use our ACH and/or card-based processing services in order to provide their consumers with the ability to pay for goods and services without having to use cash or a paper check.

These merchant customers operate in a variety of predominately retail industries and are under contract with us to exclusively use the services that we provide to them.

Through Output Solutions, we engage with customers seeking various print and mail services, alongside online document delivery and storage.

Recent areas of customer focus have included system integrators, law firms, churches, charitable organizations, medical and dental clinics, doctor's offices, property management and homeowner associations, hospitality firms and municipalities.

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 20% to 7,549 customers at December 31, 2024 from 6,281 customers at December 31, 2023.

Our customers are geographically dispersed throughout the United States.

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Many small and large companies compete with us in providing payment processing services and related services to a wide range of merchants.

There are a number of large transaction processors, including Fiserv, Inc., Elavon Inc., WorldPay, Stripe and Block, Inc.

There are a number of large transaction processors, including Fiserv, Inc., Elavon Inc., WorldPay, Global Payments, Inc., Stripe and Block, Inc.

(formerly known as Square), that serve a broad market spectrum from large to small merchants and provide banking, automatic teller machine, and other payment-related services and systems in addition to card-based payment processing.

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We believe this allows us to satisfy the market demands for risk management and service reliability.

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.

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

This integrated payments approach helps offer superior quality in service, alongside industry leading implementation times, and platform reliability.

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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.

The inclusion of these 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.

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.

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Any new, or changes made to, U.S.

federal, state and local laws, regulations, card network rules or other industry standards affecting our business may require significant development efforts or have an unfavorable impact to our financial results.

Failure to comply with these laws and regulations may result in the suspension or revocation of licenses or registrations, the limitation, suspension or termination of services and/or the imposition of civil and criminal penalties, including fines.

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The Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") effected and required significant changes to United States financial regulations, include regulations addressing 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 by our customers.

The CFPB is responsible for enforcing and writing rules regarding consumer access to disclosures, fees and statements, error resolution, limited liability and overdrafts when using prepaid cards.

As an agent of, and third-party service provider to, our issuing banks, we are subject to indirect regulation and direct audit and examination by the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or FRB, and the Federal Deposit Insurance Corporation.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (“CARD Act”) imposes requirements relating to disclosures, fees and expiration dates that are generally applicable to gift certificates, store gift cards and general-use prepaid cards.

We believe that our general purpose re-loadable prepaid cards, and the maintenance fees charged on our general purpose re-loadable cards, are exempt from the requirements under this rule, as they fall within an express exclusion for cards which are re-loadable and not marketed or labeled as a gift card or gift certificate.

However, this exclusion is not available if the issuer, the retailer selling the card to a consumer or the program manager, promotes, even if occasionally, the use of the card as a gift card or gift certificate.

As a result, we provide retailers with instructions and policies regarding the display and promotion of our general purpose re-loadable cards.

However, it is possible that despite our instructions and policies to the contrary, a retailer engaged in offering our general purpose re-loadable cards to consumers could take an action with respect to one or more of the cards that would cause each similar card to be viewed as being marketed or labeled as a gift card, such as by placing our general purpose re-loadable cards on a display which prominently features the availability of gift cards and does not separate or otherwise distinguish our general purpose re-loadable cards from the gift cards.

In such event, it is possible that such general purpose re-loadable cards would lose their eligibility for such exemption to the CARD Act and its requirements, and therefore we could be deemed to be in violation of the CARD Act and the rule, which could result in the imposition of fines, the suspension of our ability to offer our general purpose re-loadable cards, civil liability, criminal liability, and the inability of our issuing banks to apply certain fees to our general purpose re-loadable cards, each of which would likely have a material adverse impact on our revenues.

Any gift cards we issue will be governed by the CARD Act and other various regulations.

Any violations with our gift card issuance could result in the imposition of fines, the suspension of our ability to offer our gift cards, civil liability, criminal liability, and the inability of our issuing banks to apply certain fees to our gift cards, each of which would likely have a material adverse impact on our revenues.

The Dodd‑Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") effected significant changes to U.S.

financial regulations, including regulations addressing debit card interchange fees and merchant transaction‑routing rights.

The Dodd-Frank Act also created the Consumer Financial Protection Bureau (“CFPB”), which regulates consumer financial services, including many services offered by our customers.

The CFPB enforces rules regarding consumer disclosures, fees and statements, error‑resolution procedures, limited liability protections and overdraft restrictions applicable to prepaid programs.

As an agent of, and third‑party service provider to, our issuing banks, we are subject to examination by federal banking regulators, including the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.

The Credit Card Accountability, Responsibility, and Disclosure Act (“CARD Act”) imposes requirements relating to disclosures, fees and expiration dates applicable to gift certificates, store gift cards and general‑use prepaid cards.

Our general‑purpose reloadable prepaid cards fall within an exclusion from certain CARD Act requirements if they are not marketed or labeled as gift cards;

however, misplacement or improper display of our cards by retailers could cause these cards to lose this exemption and subject us to penalties or business disruption.

Evolving ACH and Electronic Payments Regulation

We provide services that rely on ACH payment processing, and as a result we are subject to the NACHA Operating Rules and related regulatory obligations.

In recent years, NACHA has adopted several significant amendments intended to strengthen fraud prevention, increase transaction transparency, and modernize network operations.

Beginning March 20, 2026, large‑volume ACH originators and third‑party service providers (those with 2023 origination volumes of six million or more) must implement enhanced risk‑based fraud‑monitoring programs, with all other non‑consumer originators and third‑party participants becoming subject to these requirements on June 19, 2026.

NACHA also adopted amendments effective April 1, 2025 requiring all ACH Network participants—other than consumers—to implement base‑level payment‑monitoring processes intended to reduce fraud, including business‑email‑compromise‑related risk, and to improve transparency between ODFIs and Receiving Depository Financial Institutions, or RDFIs, in responding to return‑status requests.

Additional ACH Network changes include rule amendments effective March 20, 2026 addressing fraud monitoring and company entry descriptions as part of a broader risk‑management package, as well as future rules related to sanctions‑compliance return codes, international ACH transactions (IAT), and IAT contact‑registration requirements.

Recent updates to return codes such as R17 allow RDFIs to return suspected fraudulent transactions earlier in the process, and changes to the Written Statement of Unauthorized Debit (WSUD) process allow optional earlier filing for pending debits.

Beginning in June 2026, organizations that send ACH payments are expected to comply with NACHA’s new risk‑assessment and bank‑account‑verification standards.

Data Privacy Laws

Our billers, financial institutions, partners and their consumers, store personal and business information, financial information and other sensitive information on our platform.

In addition, we receive, store, handle, transmit, use and otherwise process personal and business information and other data from and about actual and prospective billers, financial institutions and partners, as well as our employees and service providers.

As a result, we and our handling of data are subject to a variety of laws, rules and regulations relating to privacy, data protection and information security, including regulation by various governmental authorities, such as the U.S.

Federal Trade Commission, or FTC, and various state, local and foreign agencies.

Our data handling and processing activities are also subject to contractual obligations and industry standard requirements.

The legislative and regulatory landscapes for privacy, data protection and information security continue to evolve in jurisdictions worldwide, with an increasing focus on privacy and data protection issues with the potential to affect our business.

In the United States, various laws and regulations apply to the security, collection, processing, storage, use, disclosure and other processing of certain types of data, In addition, many states in which we operate have enacted laws that protect the privacy and security of sensitive and personal data, such as the California Consumer Privacy Act, or CCPA, as amended by the California Privacy Rights Act, or CPRA, in California.

Certain other state laws impose similar privacy obligations, such as in New York, Nevada, Virginia, Colorado, Connecticut and Utah to name a few.

In addition, all 50 states have data breach laws including obligations to provide notification of security breaches of computer databases that contain personal information to affected individuals, state officers and others.

In addition to the laws and regulations described above, various regulatory agencies in the United States and in foreign jurisdictions continue to examine a wide variety of issues which are or may be applicable to us and may impact our business.

These issues include payments, identity theft, account management guidelines, privacy, disclosure rules, cybersecurity and marketing.

The banks we partner with are under growing pressure to increase scrutiny and oversight of their fintech customers, resulting in increasing pressure on us by our bank partners to enhance our AML/BSA compliance and sanctions screening controls.

There is a risk a partner bank’s regulator will examine our compliance program under enhanced standards applicable to banks.

In addition, in the United States, almost all states regulate money transmission and while our services do not involve the movement of funds directly, there is a risk that a state regulator may misinterpret our services and find we are offering unlicensed money transmission.

The Consumer Financial Protection Bureau, or CFPB, and several states have provided guidance or prohibitions against the use of convenience or similar "pay-to-pay" fees in certain industries that may impact us and or our billers.

In January 2024, the CFPB issued a proposed rule that would prohibit non-sufficient funds fees on transactions declined in real time, with a swipe, tap or click.

The laws and regulations relating to financial services, privacy, data protection and information security are evolving, can be subject to significant change and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions.

In late 2023, the CFPB proposed new federal oversight of large technology firms and providers of digital wallets and payment applications that would require such firms to adhere to the same rules as large banks, credit unions and other financial institutions already supervised by the CFPB.

The ultimate adoption, scope or impact of this rule is uncertain, but if it becomes applicable to us, it could materially increase regulatory risks and impact the way we conduct our business.

As our business continues to develop and expand, including internationally, we continue to monitor the additional laws and regulations that may become relevant.

Any actual or perceived failure to comply with legal and regulatory requirements may result in, among other things, revocation of required licenses or registrations, loss of approved status, private litigation, including class action litigation, consent decrees and injunctions, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, damages, fines, penalties, adverse publicity, reputational damage and constraints on our ability to continue to operate.

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.

Our billers, financial institutions, partners and their consumers store personal, business and financial information on our platforms, and we receive, store, handle, transmit, use and otherwise process such data.

Accordingly, we are subject to a range of U.S.

federal, state and local laws and regulations relating to privacy, data protection and information security.

State privacy laws—including the California Consumer Privacy Act (CCPA), as amended by the California Privacy Rights Act (CPRA), as well as laws adopted in New York, Nevada, Virginia, Colorado, Connecticut and Utah—continue to expand consumer data‑access, deletion, correction and opt‑out rights, and impose enhanced operational and cybersecurity requirements.

All 50 states maintain data‑breach notification laws.

Regulators continue to examine issues applicable to the broader payments’ ecosystem, including identity‑theft prevention, cybersecurity, consumer disclosures and marketing practices.

Partner banks face intensifying oversight responsibilities over fintech partners, requiring us to enhance BSA, AML and sanctions‑screening programs.

Some state regulators may interpret certain payment‑related activities as money transmission, even without direct movement of funds.

The CFPB and certain state agencies have issued guidance affecting convenience or “pay‑to‑pay” fees in some industries.

The CFPB has also proposed a rule prohibiting non‑sufficient funds fees on real‑time declined transactions and is considering extending supervisory authority to large digital‑wallet and payment‑app providers.

Anti-Money Laundering, Anti-Corruption and Sanctions Regulations

In many countries, we are legally or contractually required to comply with anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act, and similar laws of other countries, which require that customer identifying information be obtained and verified.

In some countries, we are directly subject to these requirements;

in other countries, we have contractually agreed to assist our sponsor financial institutions with their obligation to comply with anti-money laundering requirements that apply to them.

In addition, we and our sponsor financial institutions are subject to the laws and regulations, enforced by the Office of Foreign Assets Control, that prohibit U.S.

persons from engaging in transactions with certain prohibited persons or entities.

Similar requirements apply in other countries.

We have developed procedures and controls that are designed to monitor and address legal and regulatory requirements and developments and that allow our customers to protect against having direct business dealings with such prohibited countries, individuals or entities.

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

Foreign Corrupt Practices Act, or FCPA, the U.K.

Bribery Act of 2010 and other laws that generally prohibit the making or offering of improper payments to foreign government officials and political figures for the purpose of obtaining or retaining business or to gain an unfair business advantage.

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

We are subject to unclaimed or abandoned property state laws in the United States and in certain foreign countries that require us to transfer to certain government authorities the unclaimed property of others that we hold when that property has been unclaimed for a certain period of time.

Moreover, we are subject to audit by state and foreign regulatory authorities with regard to our escheatment practices.

Environmental and Workplace Regulations

We are subject to environmental, health and safety laws regulating hazardous materials, emissions and workplace safety.

To date, compliance costs have not been material.

We employ a diverse workforce and provide mandatory training, including anti‑harassment and anti‑discrimination programs.

Human Capital Resources

As of December 31, 2024, we had 107 full-time employees, and four part-time employees.

As of December 31, 2025, we had 107 full-time employees, and three part-time employees.

We are not a party to any collective bargaining agreements.

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Our corporate website is located at www.usio.com.

We make available on this website, free of charge, copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as applicable and as soon as reasonably practicable after we electronically file or furnish such materials to the U.S.

Securities and Exchange Commission.

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.

3 unchanged sentences

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