Item 1A. Risk Factors
Our operations are subject to a number of risks and uncertainties, including those described below. You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not necessarily organized in order of priority or probability.
If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our Common Stock could decline substantially.
This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below and elsewhere in this Annual Report.
GOVERNMENT AND REGULATION
As a multinational company, we face legal and operational risks from diverse local regulations that may impact our operations.
Conducting business internationally complicates compliance with varied regional laws. Our financial transaction processing networks introduce new products that are subject to rapidly changing regulations. Despite having skilled local personnel, we cannot guarantee full compliance with customs, currency controls, data protection, anti-money laundering, sanctions, employment, and transfer pricing laws. We also cannot predict potential changes to these regulations that may negatively affect our business.
For our epay Segment, as we expand our electronic payment offerings, these may become subject to state, federal, or international laws requiring licensure for us and our partners. Increased regulation could adversely impact our epay business, particularly if gift voucher regulations change, affecting revenue from unredeemed vouchers.
Our money transfer services are regulated by U.S. states, the federal government, and foreign governments where we operate. Changes in these regulations or our ability to maintain necessary licenses may materially affect our financial results and cash flow. Furthermore, evolving regulations may alter the competitive landscape, potentially impacting our financial outcomes. New laws or changes from organizations like Visa® and Mastercard® that limit our pricing or services could substantially affect our business. Additionally, shifts in regulatory interpretations could heighten the risk of enforcement actions, fines, and penalties across jurisdictions.
Our operations in emerging markets, including Central and Eastern Europe, the Middle East, Asia Pacific, Africa, and South America, expose us to significant geopolitical and economic risks.
Political Instability: Political unrest, regime change, and military conflicts can disrupt our operations, damage our assets, and impact consumer confidence.
Economic Downturns: Economic downturns, including those driven by inflation, currency fluctuations, and global recessions, can reduce demand for our services and negatively impact our financial performance.
Regulatory Uncertainty: Changes in government policies, including those related to foreign investment, currency controls, and taxation, can create significant uncertainty and operational challenges.
Repatriation of Profits: Restrictions on the repatriation of profits from foreign subsidiaries can limit our ability to access capital and negatively impact our financial flexibility.
The ongoing geopolitical tensions, including the conflict in Ukraine and the Middle East, highlight the potential for unforeseen events to significantly impact our business and financial results.
We conduct business in many international markets with complex and evolving tax rules, including value added tax rules, which subject us to international tax compliance risks which could adversely affect our operating results.
While we obtain advice from legal and tax advisors as necessary to help assure compliance with tax and regulatory matters, most tax jurisdictions that we operate in have complex and subjective rules regarding the valuation of intercompany services, cross-border payments between affiliated companies and the related effects on income tax, value added tax (“VAT”), transfer tax and share registration tax. Our foreign subsidiaries frequently undergo VAT reviews, and from time to time undergo comprehensive tax reviews and may be required to make additional tax payments should the review result in different interpretations, allocations or valuations of our products and services.
Additionally, as a result of economic downturns, tax receipts have decreased and/or government spending has increased in many of the countries in which we operate. Consequently, governments may increase tax rates or implement new taxes in order to compensate for gaps between tax revenues and expenditures. Governments may prohibit or restrict the use of certain legal structures designed to minimize taxes. Any such tax increases, whether borne by us or our customers, could negatively impact our operating results or the demand for our products and services.
The European Union ("EU") member states formally adopted the EU's Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15 percent minimum effective tax rate for multinational enterprises, in every jurisdiction in which they operate. While we do not anticipate that the Pillar Two Directive will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate, including eligibility for any transitional safe harbor rules.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or other similar anti-corruption laws.
Our global operations expose us to the risk of violating anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (FCPA) and similar laws in other jurisdictions. These laws prohibit improper payments to government officials or employees of commercial enterprises. We operate in various countries with varying levels of corruption, and complying with these laws can sometimes conflict with local customs. Our interactions with government officials and our contracts with foreign entities increase the risk of violations.
Despite our compliance policies and procedures, there is no guarantee that all our employees, consultants, and agents will adhere to them. Violations of anti-corruption laws could result in significant penalties, including criminal and civil fines, which could materially harm our financial performance.
Changes in immigration policies and enforcement practices may adversely affect our money transfer business.
Our money transfer business depends heavily on remittances sent by workers who migrate to foreign countries for employment. Changes in U.S. and foreign government immigration policies—including restrictions on worker visas, employer sponsorship rules, border controls, and enforcement priorities—can influence migration patterns and the availability of migrant labor. A decline in migrant populations due to policy changes or increased enforcement may reduce the number of remitters, the frequency of transactions, or the average transaction size, which could negatively affect our revenues and results of operations.
In the United States, heightened immigration ‑ enforcement activity, including increased documentation checks and related government actions, has also led some customers to avoid visiting physical agent locations. Because a significant portion of our U.S. ‑ based remittance transactions are conducted in person, reduced customer willingness to enter retail or agent locations may decrease transaction volumes. If such customer behavior persists or expands, our revenues and earnings from physical corridors could be adversely affected.
Additionally, proposed or enacted migration reforms in key host countries—such as caps on visa categories, enhanced verification requirements, or limitations on family reunification—may create uncertainty or reduce labor mobility for migrant workers. Policy changes affecting remittance behavior, including remittance ‑ specific taxes, reporting obligations, fees, or incentives to use alternative channels, may shift flows between corridors, increase compliance costs, or disrupt distribution relationships. Broader macroeconomic factors, including changes in labor demand and employment conditions in destination markets, may further influence remittance activity.
Any of these developments could have a material adverse effect on our business, financial condition, and results of operations.
Market Expansion and Regulatory Risks
Our future growth depends on our ability to expand our market share in the existing electronic money transfer market and successfully enter new markets. Achieving this requires significant investments in technology and distribution channels, which may not be feasible given our available resources. Additionally, the evolving regulatory landscape, including anti-money laundering (AML), sanctions, and consumer protection regulations, presents significant compliance challenges. Non-compliance with these regulations could result in substantial fines and penalties, potentially impacting our financial performance and hindering our growth prospects.
Expectations relating to environmental, social and governance considerations and related reporting obligations expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion. In addition, we make statements about our goals and initiatives through our various non-financial reports, information provided on our website, press statements and other communications. Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside our control. We cannot guarantee that we will achieve our environmental, social and governance goals and initiatives. In addition, some stakeholders may disagree with our goals and initiatives. Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state, or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Our business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.
We are subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future. In addition, agreements entered into by us sometimes include indemnification provisions which can subject us to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and government investigations involving us, and the alleged magnitude of such claims, proceedings, and government investigations, has generally increased over time and may continue to increase. In recognition of these considerations, we may enter into agreements or other arrangements to settle litigation and resolve such challenges. There can be no assurance such agreements can be obtained on acceptable terms or that will not occur. These agreements can also significantly increase our cost of sales and operating expenses and require us to change its business practices and limit our ability to offer certain products and services. The outcome of or government is inherently uncertain. If one or more legal matters were resolved us or an indemnified third party in a reporting period for amounts above management’s expectations, our results of operations and financial condition for that reporting period could be materially affected. Further, such an outcome can result in significant compensatory, or trebled monetary , of revenue or profits, remedial corporate measures or injunctive relief us, and has from time to time required, and can in the future require, us to change our business practices and limit our ability to offer certain products and services, all of which could materially affect the Company’s business, reputation, results of operations and financial condition. While we maintain insurance coverage for certain types of , such insurance coverage may be to cover all or all types of that may arise.
SUPPLY CHAIN AND THIRD PARTIES
Because we typically enter into short-term contracts with content providers and retailers, our epay business is subject to the risk of non-renewal of those contracts, or renewal under less favorable terms.
Our contracts with content providers to distribute and process content, including prepaid mobile airtime top-up services, typically have terms of less than three years. Our contracts with content providers are not exclusive, so these providers may enter into contracts with other service providers. In addition, our service contracts with major retailers typically have terms of one to three years. The cancellation or non-renewal of one or more of our significant content provider or retail contracts, or of a large enough group of our contracts with smaller retailers, could have a material adverse effect on our business, financial condition, and results of operations. The renewal of contracts under less favorable payment terms, margins or other terms could have a material adverse impact on our working capital requirements and/or results from operations. In addition, our contracts generally permit content providers to reduce our margin or commission at any time. Commission and margin revenue or fee reductions by any of the content providers could also have a material adverse effect on our business, financial condition, or results of operations.
Our epay business is focused on expanding and differentiating its suite of prepaid digital product offerings on a global basis, there can be no assurance that we will be able to enter into relationships on favorable terms with additional content providers or renew or expand current relationships and contracts on favorable terms. The inability to continue to grow our suite of electronic content and electronic payment product offerings could have a material adverse effect on our business, financial condition, and results of operations.
The stability and growth of our EFT Processing Segment may be adversely affected if we are unable to maintain our current card acceptance and ATM management agreements with banks and international card organizations, and to secure new arrangements for card acceptance and ATM management.
The stability and future growth of our EFT Processing Segment depends in part on our ability to sign card acceptance and ATM management agreements with banks and international card organizations. Card acceptance agreements allow our ATMs to accept credit and debit cards issued by banks and international card organizations. ATM management agreements generate service income from our management of ATMs for banks.
These agreements have expiration dates, and banks and international card organizations are generally not obligated to renew them. Our existing contracts generally have terms of five to seven years and a number of them expire or are up for renewal each year. In some cases, banks may terminate their contracts prior to the expiration of their terms. We cannot assure you that we will be able to continue to sign or maintain these agreements on terms and conditions acceptable to us or that international card organizations will continue to permit our ATMs to accept their credit and debit cards. The inability to continue to sign or maintain these agreements, or to continue to accept the credit and debit cards of local banks and international card organizations at our ATMs in the future, could have a material adverse effect on our business, growth, financial condition, or results of operations.
ATM Processing Risks
Our ATM business faces several key risks related to:
Transaction Fees:
We are subject to competitive pressures on ATM transaction fees, including potential reductions in interchange fees set by card networks and declining fees charged to customers.
Our ability to maintain or increase transaction fees is limited, as they are often determined by market forces and agreements with other industry players.
Settlement Risks:
We rely on third parties, such as card networks and processing switches, for the settlement of transactions.
Changes in rules or procedures by these third parties, or their failure to fulfill their obligations, could disrupt settlement processes and negatively impact our revenue.
Dependence on Third Parties:
Our business is dependent on the continued cooperation and support of card networks, processing switches, and other third parties.
Changes in their policies, rules, or fees could significantly impact our profitability.
We could incur substantial losses if one of the third-party depository institutions or financial institutions we use in our operations were to fail.
As part of our business operations, we maintain cash balances at third party depository institutions. We could incur substantial losses if a financial institution in which we have significant deposits fails.
Our money transfer business involves transferring funds internationally and is dependent upon foreign and domestic financial institutions, including our competitors, to execute funds transfers and foreign currency transactions. Changes to existing regulations of financial institution operations, such as those designed to combat terrorism or money laundering, could require us to alter our operating procedures in a manner that increases our cost of doing business or to terminate certain product offerings. In addition, as a result of existing regulations and/or changes to those regulations, financial institutions could decide to cease providing the services on which we depend, requiring us to terminate certain product offerings.
Dependence on Third Parties for ATM Operations
Our ATM operations rely heavily on third parties, including:
Sponsor Banks: In many markets, we require sponsor bank arrangements to comply with local regulations and operate on financial transaction switching networks.
Cash Providers: We rely on third-party financial institutions to provide a significant portion of the cash required to operate our ATM networks.
Dependence on these third parties presents several risks:
Loss of Operating Licenses: Failure to secure or maintain sponsor bank arrangements could prevent us from operating in certain markets.
Disruption of Cash Supply: If cash providers terminate their agreements or are unable to fulfill their obligations, it could severely disrupt our ATM operations and require us to find alternative sources of funding, potentially at higher costs.
Negotiation Challenges: Negotiating and maintaining favorable terms with sponsor banks and cash providers can be challenging and may involve significant costs.
These risks could adversely impact our ability to operate our ATM networks, increase our operating costs, and negatively impact our financial results.
If we are unable to maintain our money transfer agent and correspondent networks, our business may be adversely affected.
Our consumer-to-consumer money transfer-based revenues are primarily generated through the use of our agent and correspondent networks. If agents or correspondents decide to leave our network or if we are unable to sign new agents or correspondents, our revenue and profit growth rates may be adversely affected. Our agents and correspondents are also subject to a wide variety of laws and regulations that vary significantly, depending on the legal jurisdiction. Changes in these laws and regulations could adversely affect our ability to maintain the networks or the cost of providing money transfer services. In addition, agents may generate fewer transactions or less revenue due to various factors, including increased competition. Because our agents and correspondents are third parties that may sell products and provide services in addition to our money transfer services, they may encounter business difficulties unrelated to the provision of our services, which may cause the agents or correspondents to reduce their number of locations or hours of operation, or cease doing business altogether.
CORPORATE GROWTH STRATEGIES
Risks Related to Acquisitions
Our growth strategy may include future acquisitions. However, acquisitions involve inherent risks, including:
Integration Challenges: Successfully integrating acquired businesses, including CoreCard, can be complex and challenging. Difficulties in integrating operations, technology, and personnel can disrupt business operations, negatively impact customer relationships, and hinder the achievement of anticipated synergies.
Unforeseen Liabilities and Contingencies: Acquired businesses may have undisclosed liabilities or contingent obligations that could adversely impact our financial results.
Difficulties in Achieving Synergies: Realizing the anticipated synergies from acquisitions can be difficult and may take longer than expected. Factors such as unforeseen competitive pressures, regulatory changes, and economic downturns can hinder the achievement of these synergies.
Dilution of Shareholder Value: Acquisitions may be financed through the issuance of equity, which could dilute existing shareholders' ownership and potentially depress the market price of our common stock.
If consumer confidence in our business or brands declines, our business may be adversely affected.
A decline in consumer confidence in our brands, our ability to provide reliable and secure services, or the money transfer industry as a whole could materially and adversely impact our business.
Specifically, a decline in consumer confidence could:
Reduce transaction volumes: Customers may choose to use alternative money transfer methods, such as cash or competing services, or may reduce their overall remittance activity.
Increase customer churn: Existing customers may switch to competitors perceived to be more reliable or trustworthy.
Damage our reputation: Negative publicity or perceived service disruptions can erode customer trust and negatively impact our brand image.
Increase operating costs: We may need to invest in additional marketing and customer service efforts to regain customer trust and mitigate the impact of declining confidence.
A significant decline in consumer confidence could have a material adverse effect on our revenue, profitability, and financial condition.
CAPITAL MARKETS AND ECONOMIC CONDITIONS
Macroeconomic and Currency Risks
Our business is subject to various macroeconomic and currency risks, including:
Economic Cycles and Seasonality:
o Economic downturns, recessions, and changes in consumer spending patterns can negatively impact transaction volumes across our business segments.
o Seasonal fluctuations in demand, such as holiday seasonality and tourism patterns, can lead to significant variations in our quarterly results.
Currency Fluctuations:
o Fluctuations in foreign exchange rates can adversely impact our financial results, particularly in the Money Transfer Segment where we are exposed to currency exchange risk between the currencies of sending and receiving countries.
o The adoption of new currencies in the countries where we operate could also create significant operational and financial challenges.
Geopolitical and Economic Instability:
o Geopolitical events, such as wars, political instability, and natural disasters, can disrupt our operations and negatively impact customer demand.
These risks can impact our business by:
Reducing transaction volumes.
Increasing operating costs.
Impairing the value of our assets.
Creating volatility in our financial results.
We utilize various strategies to mitigate these risks, such as:
Diversification of our geographic footprint.
Hedging strategies to mitigate currency exchange risk.
Continuous monitoring of economic and political developments.
However, we cannot fully eliminate the impact of these macroeconomic and currency risks on our business.
We have a substantial amount of debt and other contractual commitments, and while the cost of servicing those obligations is not expected to adversely affect our business, the risk could increase if we incur more debt. We may be required to prepay our obligations under the credit facility.
As of December 31, 2025 , total liabilities were $ 5,166.2 million, of which $ 1,311.5 million are long term liabilities. We may not have sufficient funds to satisfy all such obligations as a result of a variety of factors, some of which may be beyond our control. If the opportunity of a strategic acquisition arises or if we enter into new contracts that require the installation or servicing of infrastructure, such as processing centers, ATM machines or POS terminals on a faster pace than anticipated, we may be required to incur additional debt for these purposes and to fund our working capital needs, including ATM network cash, which we may not be able to obtain. The level of our indebtedness could have important consequences to investors, including the following:
our ability to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements or other purposes may be limited, or financing may be unavailable;
a portion of our cash flows must be dedicated to the payment of principal and interest on our indebtedness and other obligations and will not be available for use in our business;
our level of indebtedness could limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
our level of indebtedness will make us more vulnerable to changes in general economic conditions and/or a downturn in our business, thereby making it more difficult for us to satisfy our obligations; and
because a portion of our debt bears interest at a variable rate of interest, our actual debt service obligations could increase as a result of adverse changes in interest rates.
If we fail to make required debt payments, or if we fail to comply with other covenants in our debt service agreements, we would be in default under the terms of these agreements. This default would permit the holders of the indebtedness to accelerate repayment of this debt and could cause defaults under other indebtedness that we have.
Restrictive covenants in our credit facilities may adversely affect us. Our Credit Facility (as defined below) contains two financial covenants that we must meet as defined in the agreement: (1) Consolidated Total Leverage Ratio, and (2) Consolidated Interest Coverage Ratio. To remain in compliance with our debt covenants, we may be required to increase Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), repay debt, or both. We cannot assure you that we will have sufficient assets, liquidity or EBITDA to meet or avoid these obligations, which could have an adverse impact on our financial condition.
Our ability to secure additional financing for growth or to refinance any of our existing debt is also dependent upon the availability of credit in the marketplace, which has experienced severe disruptions in the past. If we are unable to secure additional financing or such financing is not available at acceptable terms, we may be unable to secure financing for growth or refinance our debt obligations, if necessary.
CYBER, PHYSICAL ASSET, AND DATA SECURITY
Our business relies heavily on sophisticated computer systems and networks. These systems are vulnerable to various operational and cybersecurity risks, including:
System Outages: Disruptions to our computer systems and telecommunications networks due to hardware or software failures, power outages, natural disasters, or security breaches can significantly impact our operations, leading to service interruptions, revenue losses, and damage to our reputation.
Cybersecurity Threats: We face the risk of cyberattacks, including data breaches, malware infections, ransomware attacks, and denial-of-service attacks. These threats can result in unauthorized access to sensitive customer data, financial losses, reputational harm, regulatory fines, and legal liabilities.
Data Privacy and Security: We are subject to stringent data privacy and security regulations. Breaches of customer data can result in significant fines, litigation, and damage to our brand.
Our mitigation efforts include:
Implementing robust security measures, such as encryption, access controls, and intrusion detection systems.
Maintaining business continuity and disaster recovery plans.
Regularly updating and enhancing our security protocols.
However, despite these efforts, we cannot guarantee complete protection against all cyber threats and operational disruptions.
Failures of third-party service providers we rely upon could lead to financial loss.
We rely on third party service providers to support key portions of our operations. We also rely on third party service providers to provide part or all of certain services we deliver to customers. While we have selected these third-party vendors carefully, we do not control their actions. The failure of these services by a third-party could have a material impact upon our delivery of services to customers. Such a failure could lead to damage claims, loss of customers, and reputational harm, depending on the duration and severity of the failure. Third parties perform significant operational services on our behalf. These third-party vendors are subject to similar risks as us relating to cybersecurity, breakdowns or failures of their own systems or employees. One or more of our vendors may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be addressed, either operationally or financially, by the third-party vendor. Certain of our vendors may have limited indemnification obligations or may not have the financial capacity to their indemnification obligations. If a vendor is to meet our needs in a timely manner or if the services or products provided by such a vendor are or otherwise and if we are not to develop alternative sources for these services and products quickly and cost-effectively, our customers could be impacted, and it could have a material effect on our business.
Our business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data protection.
We are subject to an increasing number of federal, state, and international laws relating to the collection, use, retention, security and transfer of various types of personal information. In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among us and our international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing requirements causes us to incur substantial costs and has required and may in the future require us to change our business practices. Noncompliance could result in significant penalties or legal liability. We make statements about our use and disclosure of personal information through its our privacy policy, information provided on its our website, press statements and other privacy notices provided to customers. Any failure by us to comply with these public statements or with other federal, state or international privacy or data protection laws and regulations could result in inquiries or proceedings against us by governmental entities or others. In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability. In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, we are also subject to specific obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data. Health data and financial data are subject to additional privacy, security and notification requirements, and we are subject to audit by governmental authorities regarding our compliance with these obligations. If we to comply with these rules and requirements, or if health data or financial data is handled in a manner not permitted by law or under our agreements with healthcare or financial institutions, we can be subject to or government , and can be liable for associated investigatory expenses, and can also incur significant fees or . Payment card data is also subject to additional requirements. Under payment card rules and obligations, if cardholder information is potentially compromised, we can be liable for associated investigatory expenses and can also incur significant fees or if we to follow payment card industry data security standards. We could also experience a significant increase in payment card transaction costs or the ability to process payment cards if it we to follow payment card industry data security standards, which could materially affect our business, reputation, results of operations and financial condition.
Cryptocurrency and Digital Asset Risk
The Company has recently begun exploring and developing potential use cases for certain cryptocurrencies, including the possible application of stablecoins within aspects of its business operations. While these initiatives remain in early stages and may not ultimately be implemented, any meaningful use of cryptocurrencies would expose the Company to a range of internal and external risks that could adversely impact its operations, regulatory obligations, financial condition, or relationships with key partners. These risks include, but are not limited to, the following:
Regulatory Scrutiny: U.S. banking and financial regulators have cautioned that crypto ‑ asset safekeeping, transaction processing, and related activities present unique fraud, operational, supervisory, and legal risks that require enhanced risk ‑ management controls.
Rising Fraud Activity: Cryptocurrency ‑ related scams—particularly those involving the misuse of crypto ATMs and other consumer ‑ facing channels—have increased, prompting regulatory interventions, customer ‑ protection initiatives, and litigation activity that could affect digital ‑ asset adjacent services.
State ‑ Level Regulations: Several U.S. states have adopted or proposed digital ‑ asset rules such as transaction caps, enhanced identity ‑ verification standards, fee limitations, and mandatory fraud disclosures, which could complicate or restrict the Company’s ability to offer or support certain services involving digital assets.
AML and Illicit ‑ Finance Exposure: Digital ‑ asset transactions can elevate anti ‑ money ‑ laundering and counter ‑ terrorist ‑ financing risks due to their speed, pseudonymity, and cross ‑ border characteristics, potentially increasing compliance requirements and regulatory expectations for financial intermediaries.
Fragmented Global Regulation: Digital ‑ asset oversight continues to evolve inconsistently across jurisdictions. Divergent or rapidly changing regulatory frameworks may raise compliance costs, create operational uncertainty, affect relationships with financial institutions, or require modifications to existing processes.
Indirect Business Impact: Even if the Company does not ultimately introduce crypto ‑ related products, broader industry developments, supervisory expectations, or third ‑ party risk assessments associated with digital assets may influence the Company’s compliance obligations, availability of banking partners, operational risk standards, or the regulatory posture applied to its products and services.
Artificial Intelligence Risk
The increasing use of artificial intelligence (“AI”), including machine learning and generative AI, in our internal systems, vendor tools, customer-facing applications, and fraud ‑ detection processes exposes us to emerging technology, operational, and regulatory risks. A growing number of public companies now disclose AI as a material enterprise risk due to concerns related to cybersecurity, data privacy, model accuracy, regulatory uncertainty, competition, and reputational exposure.
AI systems—whether developed internally or provided by third parties—may produce incorrect, biased, or unreliable outputs, which could adversely affect our operations, decision ‑ making, compliance programs, and customer interactions. As AI expands the potential attack surface for cyber threats, it may increase the likelihood or severity of data breaches and unauthorized access to sensitive information.
Regulatory scrutiny is rapidly increasing. Emerging frameworks such as the EU Artificial Intelligence Act and new U.S. state ‑ level AI laws may impose additional compliance obligations, restrict certain uses of AI, or require costly system changes. The SEC has also warned against “AI washing,” increasing the risk of enforcement actions if disclosures regarding AI capabilities are inaccurate or misleading.
AI-related operational risks include potential failures or outages in AI ‑ enabled tools—such as fraud ‑ prevention models or transaction ‑ monitoring systems—that could disrupt services or impair accuracy. Competitors leveraging AI more effectively may gain efficiency or product advantages. In addition, reliance on third ‑ party AI models exposes us to data ‑ quality issues, intellectual ‑ property risks, and vendor performance failures. Perceived or actual misuse of AI, including algorithmic bias or consumer harm, could result in reputational damage, litigation, or regulatory action.
As AI regulations and stakeholder expectations evolve, we may incur additional costs to strengthen governance, oversight, testing, and monitoring of AI systems. Despite these efforts, we cannot guarantee that our use of AI—or the use of AI by our vendors—will not materially adversely affect our business, results of operations, or financial condition.
COMPETITIVE LANDSCAPE
Our competition in the EFT Processing Segment, epay Segment and Money Transfer Segment includes large, well-financed companies and financial institutions larger than us with earlier entry into the market. As a result, we may lack the financial resources and access to capital needed to capture increased market share.
EFT Processing Segment - Our principal EFT Processing competitors include ATM networks owned by banks and national switches consisting of consortiums of local banks that provide outsourcing and transaction services only to banks and independent ATM deployers in that country. Large, well-financed companies offer ATM network and outsourcing services that compete with us in various markets. In some cases, these companies also sell a broader range of card and processing services than we do, and are, in some cases, willing to discount ATM services to obtain large contracts covering a broad range of services. Competitive factors in our EFT Processing Segment include network availability and response time, breadth of service offering, price to both the bank and to its customers, ATM location and access to other networks.
epay Segment - We face competition in the epay business in all of our markets. A few multinational companies operate in several of our markets, and we therefore compete with them in a number of countries. In other markets, our competition is from smaller, local companies. Major retailers with high volumes are in a position to demand a larger share of margin/commissions or to negotiate directly with the content providers, which may compress our margins. Additionally, certain of our content providers, including mobile phone operators have entered into direct contracts with retailers and/or have developed processing technology that diminishes or eliminates the need for intermediate processors and distributors.
Money Transfer Segment - Our primary competitors in the money transfer and bill payment business include other large money transfer companies and electronic money transmitters, as well as certain major national and regional banks, financial institutions, and independent sales organizations. Our competitors include The Western Union Company and MoneyGram International Inc. The Western Union Company has a significant competitive advantage due to its greater resources and access to capital for expansion. This may allow them to offer better pricing terms to customers, which may result in a loss of our current or potential customers or could force us to lower our prices. Either of these actions could have an adverse impact on our revenues. In addition, our competitors may have the ability to devote more financial and operational resources than we can to the development of new technologies that provide improved functionality and features to their product and service offerings. If successful, their development efforts could render our product and service offerings less desirable, resulting in the of customers or a reduction in the price we could demand for our services. In addition to traditional money payment services, new technologies are emerging that may effectively compete with traditional money payment services, such as stored-value cards, debit networks, web-based services, and digital currencies. Our continued growth depends upon our ability to compete effectively with these alternative technologies.
Developments in payments could materially reduce our transaction levels and revenues.
Certain developments in the field of payments may reduce the need for ATMs, prepaid product POS terminals and money transfer agents. An example of this type of development is the use of near-field technology in retail transactions, which if widely accepted in a market reduces the need for cash and can negatively impact the level of ATM transactions in that market. Advances in biometric payment solutions could have similar adverse impacts. These developments may reduce the transaction levels that we experience on our networks in the markets where they occur. Financial institutions, retailers and agents could elect to increase fees to their customers for using our services, which may cause a decline in the use of our services and have an adverse effect on our revenues. If transaction levels over our existing network of ATMs, POS terminals, agents and other distribution methods do not increase, growth in our revenues will depend primarily on increased capital investment for new sites and developing new markets, which reduces the margin we realize from our revenues.
The mobile phone industry is a rapidly evolving area, in which technological developments, in particular the development of new billing models and distribution methods or services, may affect the demand for other services in a dramatic way. The development of any new models or technology that reduce the need or demand for prepaid mobile airtime could materially and adversely affect our business.
Competition in our EFT Processing Segment has increased over the last several years, increasing the risk that certain of our long-term bank outsourcing contracts may be terminated or not renewed upon expiration.
The developing markets in which we have done business have matured over the years, resulting in increasing competition. In addition, as consolidation of financial institutions in Central and Eastern Europe continues, certain of our customers have established or are establishing internal ATM management and processing capabilities. As a result of these developments, negotiations regarding renewal of contracts have become increasingly challenging and in certain cases we have reduced fees to extend contracts beyond their original terms. In certain other cases, contracts have been, and in the future may be, terminated by financial institutions resulting in a substantial reduction in revenue. Contract termination payments, if any, may be inadequate to replace revenues and operating income associated with these contracts.
Pricing and Competitive Pressures
Setting competitive and profitable remittance prices across various corridors presents significant challenges.
Factors such as:
Intense Competition: The global remittance market is highly competitive with numerous players, including traditional money transfer operators, banks, and fintech companies.
Varying Market Dynamics: Each remittance corridor (e.g., U.S. to Mexico, The Netherlands to Morocco) has unique characteristics, including varying levels of competition, customer demand, regulatory environments, and operating costs.
Currency Fluctuations: Exchange rate volatility can significantly impact profitability, requiring constant adjustments to pricing models.
Regulatory Changes: Changes in regulations in sending or receiving countries, including fees, taxes, and anti-money laundering requirements, can impact pricing and profitability.
Customer Sensitivity to Price: Remittance customers are highly price sensitive. Setting prices too high can deter customers and lead to market share loss, while setting prices too low can negatively impact profitability.
Failure to accurately assess and respond to these factors could result in:
Reduced revenue and profitability.
Loss of market share to competitors.
Difficulty in achieving and maintaining sustainable growth.
The Company continuously monitors market trends, analyzes competitive pricing, and adjusts its pricing strategies to maintain competitiveness while ensuring profitability.
GOVERNANCE MATTERS
We have various mechanisms in place to discourage takeover attempts, which may reduce or eliminate our stockholders' ability to sell their shares for a premium in a change of control transaction.
Various provisions of our certificate of incorporation and bylaws and of Delaware corporate law may discourage, delay or prevent a change in control or takeover attempt of our company by a third party which our management and board of directors opposes. Public stockholders who might desire to participate in such a transaction may not have the opportunity to do so. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change of control or change in our management and board of directors. These provisions include:
preferred stock that could be issued by our board of directors to make it more difficult for a third party to acquire, or to discourage a third party from acquiring, a majority of our outstanding voting stock;
classification of our directors into three classes with respect to the time for which they hold office;
supermajority voting requirements to amend the provision in our certificate of incorporation providing for the classification of our directors into three such classes;
non-cumulative voting for directors;
control by our board of directors of the size of our board of directors;
limitations on the ability of stockholders to call special meetings of stockholders;
advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted upon by our stockholders at stockholder meetings; and
an exclusive forum bylaw provision for all internal corporate claims.
Additionally, we are authorized to issue up to a total of 90 million shares of common stock, potentially diluting equity ownership of current holders and the share price of our common stock. We believe that it is necessary to maintain a sufficient number of available authorized shares of our common stock in order to provide us with the flexibility to issue common stock for business purposes that may arise as deemed advisable by our Board. These purposes could include, among other things, (i) to declare future stock dividends or stock splits, which may increase the liquidity of our shares; (ii) the sale of stock to obtain additional capital or to acquire other companies or businesses, which could enhance our growth strategy or allow us to reduce debt if needed; (iii) use in additional stock incentive programs and (iv) other bona fide purposes. Our Board of Directors may issue the available authorized shares of common stock without notice to, or further action by, our stockholders, unless stockholder approval is required by law or the rules of the Nasdaq Global Select Market. The issuance of additional shares of common stock may significantly dilute the equity ownership of the current holders of our common stock. Further, over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks. This may result in dilution of the market price of the common stock.
An additional 15.5 million shares of common stock, representing approximately 39 % of the shares outstanding as of December 31, 2025 , could be added to our total common stock outstanding through the exercise of options or the issuance of additional shares of our common stock pursuant to existing convertible debt and other agreements. Once issued, these shares of common stock could be traded into the market and result in a decrease in the market price of our common stock.
As of December 31, 2025 , we had 4.9 million options and 1.5 million restricted stock awards outstanding, held by our directors, officers and employees, which entitle these holders to acquire an equal number of shares of our common stock. Of this amount, 4.0 million options are vested and exercisable as of December 31, 2025 . Approximately 1.1 million additional shares of our common stock may be issued in connection with our stock incentive and employee stock purchase plans. Accordingly, based on current trading prices of our common stock, approximately 3.1 million shares could potentially be added to our total current common stock outstanding through the exercise of options and the vesting of restricted stock awards, which could adversely impact the trading price for our stock.
Of the 6.4 million total options and restricted stock awards outstanding, an aggregate of 5.2 million options and restricted stock awards are held by persons who may be deemed to be our affiliates and who would be subject to Rule 144. Thus, upon exercise of their options or sale of shares for which restrictions have lapsed, these affiliates' shares would be subject to the trading restrictions imposed by Rule 144. The remainder of the common shares issuable under option and restricted stock award arrangements would be freely tradable in the public market. Over the course of time, all of the issued shares have the potential to be publicly traded, perhaps in large blocks.
Upon the occurrence of certain events, another 8.0 million shares of common stock could be issued upon conversion of the Company's existing convertible notes; in certain situations, the number of shares issuable could be higher. While we have stated that we intend to settle any conversion of these notes by issuing cash for the principal value of the notes and paying cash or issuing shares of common stock for the conversion value in excess of the principal, which would significantly reduce the number of shares issued upon conversion, if our financial condition significantly and adversely changes, we may not be able to settle as intended should the notes be converted.
KEY PERSONNEL
Retaining the founder and key executives of our Company, and of companies that we acquire, and finding and retaining qualified personnel is important to our continued success, and any inability to attract and retain such personnel could harm our operations.
The development and implementation of our strategy has depended in large part on our co-founder, Michael J. Brown. The retention of Mr. Brown is important to our continued success. In addition, the success of the expansion of businesses that we acquire may depend in large part upon the retention of the founders or leaders of those businesses. Our success also depends in part on our ability to hire and retain highly skilled and qualified management, operating, marketing, financial and technical personnel. The competition for qualified personnel in the markets where we conduct our business is intense and, accordingly, we cannot assure you that we will be able to continue to hire or retain the required personnel.
Our officers and some of our key personnel have entered into service or employment agreements containing non-competition, non-disclosure, and non-solicitation covenants, which grant incentive stock options and/or restricted stock with long-term vesting requirements. However, most of these contracts do not guarantee that these individuals will continue their employment with us. The loss of our key personnel could have a material adverse effect on our business, growth, financial condition, or results of operations.
