UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

    

FORM 10-K

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20202023

OR

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to     

Commission File No. 001-16111

GLOBAL PAYMENTS INC.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements we use in this report, and in some of the documents we incorporate by reference in this report, contain forward-looking statements concerning our business operations, economic performance and financial condition, including in particular: our business strategy and means to implement the strategy; measures of future results of operations, such as revenues, expenses, operating margins, income tax rates, and earnings per share; other operating metrics such as shares outstanding and capital expenditures; statements we make regarding guidance and projected financial results for the year 2024; the effects of the COVID-19 pandemicgeneral economic conditions on our business; statements about the benefits of our acquisitions or divestitures, including future financial and operating results and the completion and expected timing of our acquisitions or completion of anticipated benefits or strategic initiatives; our success and timing in developing and introducing new services and expanding our business; and other statements about the benefits ofregarding our acquisitions, including future financial performance and operating results, the company’s plans, objectives, expectations and intentions, and the successful integration of our future acquisitions or completion of anticipated benefits and strategic initiatives.intentions. You can sometimes identify forward-looking statements by our use of the words "believes," "anticipates," "expects," "intends," "plan," "forecast," "guidance" and similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

These cautionary statements qualify all of our forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements.

PART I

ITEM 1- BUSINESS

Global Payments Inc. and its consolidated subsidiaries are referred to collectively as "Global Payments," the "Company," "we," "our" or "us," unless the context requires otherwise.

Introduction

We are a leading pure play payments technology company providing cutting edge paymentsdelivering innovative software and software solutionsservices to approximately 3.5 million merchant locations and more than 1,300 financial institutions across more than 100 countries throughoutour customers globally, with worldwide reach spanning North America, Europe, Asia-Pacific and Latin America. Our technologies, services and employeeteam member expertise enableallow us to provide a broad range of solutions that allowenable our customers to operate their businesses more efficiently across a variety of channels around the world. Headquartered in Georgia with approximately 24,000 employees27,000 team members worldwide, Global Payments is a Fortune 500 company and is a member of the S&P 500. Our common stock is traded on the New York Stock Exchange under the symbol "GPN."

We operate in threetwo reportable segments: Merchant Solutions and Issuer Solutions. During the second quarter of 2023, we completed the sale of the consumer portion of our Netspend business, which comprised our former Consumer Solutions and Business and Consumer Solutions.segment. See "Note 16—18—Segment Information" in the notes to the accompanying consolidated financial statements for additional information about our segments, including revenues, operating income and depreciation and amortization by segment as well as financial information about geographic areas in which we operate.

On March 24, 2023, we completed the acquisition of EVO Payments, Inc. (“EVO”) for total purchase consideration of approximately $4 billion. EVO is a payment technology and services provider, offering payment solutions to various risks,merchants ranging from small and middle market enterprises to multinational companies and organizations across the Americas and Europe. The acquisition aligns with our technology-enabled payments strategy, expands our geographic presence in attractive markets and augments our business-to-business ("B2B") software and payment solutions business.

On April 26, 2023, we completed the sale of the consumer portion of our Netspend business for approximately $1 billion. The disposition further aligns our businesses with our strategy to focus on our core corporate customers, including without limitation, currency exchange risksmerchants, financial institutions, software partners and political, economictechnology leaders. Prior to disposition, the consumer business comprised our former Consumer Solutions segment and regulatory risks. provided general purpose reloadable ("GPR") prepaid debit and payroll cards, demand deposit accounts and other financial service solutions to the underbanked and other consumers and businesses in the United States.

See "Item 1A - Risk Factors""Note 2—Acquisitions" and “Note 3—Business Dispositions” in the notes to the accompanying consolidated financial statements for additional information aboutfurther discussion of these risks.and other recent transactions.

Through our Merchant Solutions segment, we provide payments technology and software solutions to customers globally. Our payment technology solutions are similar around the world in that we enable our customers to accept card, electronic, check and digital-based payments. Our comprehensive offerings include, but are not limited to, authorization, services, settlement and funding services, customer support, and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements and on-line reporting.

In addition, we offer a wide array of enterprise software solutions that streamline business operations to customers in numerous vertical markets. We also provide a variety of value-added solutions and services, including specialty point-of-sale solutions, analyticsoftware, analytics and customer engagement, tools, payroll and human capital management servicesand payroll and reporting that assist our customers with driving demand and operating their businesses more efficiently.

Our value proposition is to provide distinctive high-quality, responsive and secure services to all of our customers. We distribute our Merchant Solutions services globally through multiple relationship-ledtechnology-enabled and technology-enabledrelationship-led distribution channels and target customers in many vertical markets located throughout North America, Europe, Asia-Pacific and Latin

Distribution Channels

In the Merchant Solutions segment, we actively market and provide our payment services, enterprise software solutions and other value-added services directly to our customers through a variety of relationship-ledtechnology-enabled and technology-enabledrelationship-led distribution channels.

Credit and Debit Card Transaction Processing

Credit and debit card transaction processing includes the processing of the world's major international card brands, including, among others, American Express, Discover Card ("Discover"), JCB, Mastercard, UnionPay International ("UPI") and Visa, as well as certain domestic debit networks, such as Interac in Canada. Credit and debit networks establish uniform regulations that govern much of the payment card industry. During a typical payment transaction, the merchant and the card issuer do not interface directly with each other, but instead rely on payments technology companies, such as Global Payments, to facilitate transaction processing services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back officeback-office support services such as chargeback and retrieval resolution.

We process funds settlement under two models: a sponsorship model and a direct membership model. Under the sponsorship model, member clearing financial institutions ("Members") sponsor us and require our adherence to the standards of the networks. In these markets, we have sponsorship or depository and clearing agreements with financial institution sponsors. These agreements allow us to route transactions under the Members' control and identification numbers to clear card transactions through Mastercard and Visa. In this model, the standards of the card networks restrict us from performing funds settlement or accessing merchant settlement funds, and instead, require that these funds be in the possession of the Member until the merchant has been funded.

Under the direct membership model, we are direct members in various payment networks, allowing us to process and fund transactions without third-party sponsorship. Under this model, we route and clear transactions directly through the card brand’s network and are not restricted from performing funds settlement. Otherwise, we process these transactions similarly to how we process transactions in the sponsorship model. We are required to adhere to the standards of the various networks in which we are direct members. We maintain relationships with financial institutions, which may also serve as our Member sponsors for other card brands or in other markets, to assist with funds settlement.

How a Card Transaction Works

A typical payment transaction begins when a cardholder presents a card for payment atto a merchant location whereat which time card and transaction information, such as the card identification number, transaction date and transaction amount, is captured and transmitted to our network. The information is captured by a point-of-sale ("POS") terminal card reader or mobile device card reader, which may be sold or leased to the merchant and serviced by us. Alternatively, card and transaction information may be captured and transmitted to our networkus, or through a POS device or ecommerce portal by one of a number of services that we offer directly or through a value-added reseller. The card reader electronically records sales draft information, such as the card identification number, transaction date and transaction amount.

After the card and transaction information is captured, the POS device or ecommerce portal automatically connects to our network through the internet or other communication channel in order to receive authorization of the transaction. For a credit card transaction, authorization services generally refer to the process in which the card issuer indicates whether a particular credit card is authentic and whether the impending transaction amount will cause the cardholder to exceed defined credit limits. In a debit card transaction, we obtain authorization for the transaction from the card issuer through the payment network verifying that the cardholder has access to sufficient funds for the transaction amount.

As an illustration, shown below in the sponsorship model, on a $100.00 card transaction the card issuer may fund the Member, our sponsor, (indirectly through the card network) $98.50 after retaining approximately $1.50 referred to as an interchange fee. The card issuer seekswould seek reimbursement of $100.00 from the cardholder in the cardholder's monthly credit card statement.

Discount rates vary based on negotiations with merchants and the economic characteristics of transactions.transactions and take many forms, such as interchange plus our fee or a bundled rate that includes all fees. Interchange rates also vary based on the economic characteristics of individual transactions. Accordingly, our fee per transaction varies across our merchant base and is subject to change based on changes in discount rates and interchange rates. Our profit on thea transaction reflects the fee receivedmerchant discount less interchange fees, payment network fees and operating expenses, including systems costcosts to process the transaction and commissions paid to our sales force or ISO.external partner. Payment network fees are charged by the card brands, in part, based on the value of transactions processed through their networks.

Through our Issuer Solutions segment, we provide solutions that enable financial institutions and other financial service providers to manage their card portfolios, reduce technical complexity and overhead and offer a seamless experience for cardholders on a single platform. In addition, we provide flexible commercial payments, accounts payable and ePayableselectronic payment alternatives solutions that support business-to-businessB2B payment processes for businesses and governments. We also offer complementary services, including account management and servicing, fraud solution services, analytics and business intelligence, cards, statements and correspondence, customer contact solutions and risk management solutions. Additionally, our Issuer Solutions segment provides B2B payment services and other financial service solutions marketed to businesses, including software-as-a-service (“SaaS”) offerings that automate key procurement processes, provide invoice capture, coding and approval, and enable virtual cards and integrated payments options across a variety of key vertical markets.

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

Our BusinessThe payments technology industry provides financial institutions, businesses and Consumer Solutions segment provides general purpose reloadable ("GPR") prepaid debitconsumers with payment processing services, merchant acceptance solutions and payroll cards, demand deposit accountsrelated information and other financial servicevalue-added services. The industry continues to grow as a result of wider merchant acceptance and increased use of credit and debit cards, advances in payment solutions and processing technology and migration to ecommerce, omnichannel and contactless payment solutions. The proliferation of credit and debit cards, as well as other digital payment solutions, has made the underbankedacceptance of digital payments a necessity for many businesses, regardless of size, in order to remain competitive. Certain macroeconomic drivers, such as the COVID-19 pandemic, have further accelerated the use of digital payments, the need for development of technologies and other consumersdigital-based solutions and businessesthe expansion of ecommerce, omnichannel and contactless payment solutions. The increased use of cards and the availability of more sophisticated technology services to all market segments have resulted in the United States through our Netspend®an increasingly competitive and other brands. Through our Business and Consumer Solutions segment, we provide customers with access to depository accounts insured by the Federal Deposit Insurance Corporation ("FDIC") with a menu of features specifically tailored to their needs. The Business and Consumer Solutions segment has an extensive distribution and reload network comprised of financial service centers and other retail locations throughout the United States, and is a program manager for FDIC-insured depository institutions that provide the services that the Business and Consumer Solutions segment develops, promotes and distributes. Business and Consumer Solutions currently has active agreements with four card issuing banks.specialized industry.

Our Merchant Solutions segment competes with financial institutions, and merchant acquirers and other financial technology companies who provide businesses with merchant acquiring services and related services. We believe that as of December 31, 2020, we were one of the largest merchant acquirers in the small and medium-sized business segment (merchants who have less than $5 million in annual bankcard sales volume) in the United States. In the United States, we compete primarily with a large number of providers, including but not limited to Fiserv, Inc. (and its alliances) ("Fiserv"), Fidelity National Information Services, Inc.Worldpay, LLC ("FIS"Worldpay"), Chase Paymentech Solutions, LLC, Elavon, Inc., a subsidiary of U.S. Bancorp, Bank of America Merchant Services, Wells Fargo Bank, N.AMerchant Services, Toast, Inc., Stripe, Inc., Shopify Inc. and Square,Block Inc. While these are our primary competitors in the merchant acquiring space, our vertically focused businessbusinesses in the United States compete with numerous other organizations.providers in their respective verticals.

Internationally, financial institutions remain the primary providers of payment technology services to merchants, although the outsourcing of these services to third-party service providers is becoming more prevalent. In addition toWe compete outside the U.S. with financial institutions in the markets in which we operate, as well as both large providers (such as Worldpay, Worldline, Nexi) and new entrants (such as Adyen, Block and Stripe). We have seen competition internationally increase and expect that trend to continue as new companies enter our markets and existing competitors in Europe include Ayden N.V.expand or consolidate their product lines and FIS.services.

Our Issuer Solutions segment encounters competition from other third-party payment card issuer processors, the card brands, core banking platform providers, independent software vendors, B2B providers, and various other firms that provide products anddeliver services to payment card issuers in the markets we serve. The United States market for third-party issuer processing is primarily serviced by three vendors, including TSYS, with our largest competitor being a subsidiaryserve, as well as financial institutions who provide such services in-house. Our competitors in this segment include, but are not limited to Fiserv, FIS, Marqeta, Nexi, Worldline, i2c, Bill.com, AvidExchange, Billtrust, Adyen, Stripe and Zeta. We expect the number of Fiserv. We believe that as of December 31, 2020, we were the largest third-party processor for credit card issuerscompetitors in North America and one of the largest in Europe based on net revenue from solutions providedthis segment to credit card issuers.continue to expand.

See the section titled “Risk Factors - Risks Related to Our Business Model and Consumer Solutions segment primarily competes with other demand deposit account and prepaid debit account program managers to provide financial service solutions to the underbanked and other consumers and businesses. Our primary competitors in this space include Green Dot Corporation, InComm and Fiserv. As of December 31, 2020, we believe that we were one of the two largest prepaid program managers in the United States based on gross dollar volume (total spendingOperations” for further information on the accountscompetitive and continuously evolving markets we manage) processed.serve.

Safeguarding Our Business

In order to provide our services, we process and store sensitive business information and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses, and other types of personal information or sensitive business information. Some of this information is also processed and stored by financial institutions, merchants and other entities, as well as third-party service providers to whom we outsource certain functions and other agents, which we refer to collectively as our associated third parties. We may have responsibility to the card networks, financial institutions, and in some instances, our merchants, ISOs and/or individuals, for our failure or the failure of our associated third partiesthird-party service providers (as applicable) to protect this information.

We are subjectFor a further discussion of our approach to cyber security and information theft risks in our operations, which we seek to manage through cyber and information security programs, training and insurance coverage. To strengthen our security and cyber defenses, we continue to deploy multiple methods at different layers to defend our systems against misuse, intrusions and cyberattacks and to protect the data we collect. Further, we work with information security and forensics firms and employ advanced technologies to help prevent, investigate and address issues relating to processing system security and availability. We also collaborate with third parties, regulators and law enforcement, when appropriate, to resolve security incidents and assist in efforts to prevent unauthorized access to our processing systems.cybersecurity, see "Item 1C - Cybersecurity."

Intellectual Property

Our intellectual property is an important part of our strategy to be a leading provider of payment technology and software solutions. We use a combination of internal policies, intellectual property laws and contractual provisions to protect our proprietary technologies and brands. In addition, to protect our various brands, we seek and maintain registration of U.S. and international patents, copyrights, trade secrets, trademarks, service marks and domain names that align with our brand strategy. We also enforce our trademarks against potential sources of confusionmisunderstanding that could harm our brand and ability to compete. In addition to using our intellectual property in our own operations, we grant licenses to certain of our customers to use our intellectual property.

Human Capital Management

We currently doesdo business in over 100 countries around the world, with approximately 27,000 team members living and working in 38 of them.35 countries. As of December 31, 2020,2023, approximately 59% of our approximately 24,000-employee workforce represented approximately 80 nationalities and 16 natively spoken languages, with approximately 68% residingresided in the Americas, 12.5% residing19% in Europe and 19.5% residing22% in Asia Pacific. Many of our employeesteam members are highly skilled in technical areas specific to payment technology and software solutions.

GrowthOur overall workforce strategies are developed and Developmentmanaged by our Chief Human Resources Officer, who reports to our President and CEO. More broadly, the board of directors and the Compensation Committee of our board of directors ("Compensation Committee") provide oversight on certain culture and human management topics, including diversity, equity and inclusion (“DEI”) and succession plans for critical talent. We regularly engage with our team members through a variety of forums, including periodic surveys, to help us understand their perspectives related to workplace culture, engagement, inclusion, talent management and well-being and to inform our human capital strategies and initiatives. The results of these interactions are also leveraged to further develop our talent management initiatives. Moreover, the board of directors also reviews critical feedback and receives updates on management’s plans in response thereto.

Our strategy to developTalent Management and retain the best talent includesRetention

Well-beingHealth and Safety during COVID-19 PandemicWell-being

The success of our business is connected to the well-being of our team members. Accordingly, we are committed to the health, safety and wellness of our team members worldwide. In responseworldwide, and we provide team members with various health and wellness programs and benefits, including employee education and assistance programs that focus on physical, financial, family, social and emotional resources.

We remain committed to addressing the COVID-19 pandemic, we implemented significant changes that we determined were in the best interestever-changing needs of our team members as well asand finding new ways to continuously enhance our culture. Our DEI strategy, led by our Chief Diversity Officer and our Chief Human Resources Officer, reflects the communitiesshift in which we operate. This included enablingour current workforce, changing business landscape and potential talent and is anchored by three pillars: Leadership Accountability, Inclusive Capability and Engagement. To further engrain our DEI strategy in the vast majority of our worldwide employees to seamlessly shift to work from home. Over the past several years,organization, we have made significant investmentsestablished various Employee Resource Groups and diversity action teams, led by senior leaders throughout our company. These groups and teams are critical drivers in fostering organizational change, establishing dedicated focus on DEI priorities and managing the DEI program beyond our corporate function. We continue to include social and racial equity in our operating environmentsconversations, and technology that support day-to-day execution. The largely cloud-based systemsaim to equip and collaboration tools we use globally facilitated this smooth transition of operations to business continuity mode. Additional health and safety measures have been implemented for team members continuing critical work within office locations, such as:

Various aspects of our business are subject to regulation and supervision under federal, state and local laws in the United States and foreign laws, regulations and rules,rules. Many of these regulations and laws are evolving and their applicability and scope, as well as local escheatinterpreted by courts and regulators, remain uncertain. These regulations and laws andinvolve a variety of matters, including privacy and information security, regulations.data and personal information protection, money-transmission and payment instrument laws and regulations, consumer protection laws, anti-money laundering and anti-corruption laws, tax, environmental sustainability (including climate change) and human rights. In addition, we are subject to rules promulgated by the various payment networks, including Nacha, American Express, Discover, Interac, Mastercard and Visa.

Set forth below is a brief summary of some of the significant laws and regulations that apply to us. These descriptions are not exhaustive, and these laws, regulations and rules frequently change and are increasing in number.

Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") restricts the amounts of debit card fees that certain institutions can charge merchants. Pursuant to regulations promulgated by the Federal Reserve Board, debit interchange rates for card issuers with assets of $10 billion or more are capped at $0.21 per transaction and an ad valorem component of 5 basis points to reflect a portion of the issuer's fraud losses plus, for qualifying issuers, an additional $0.01 per transaction in debit interchange for fraud prevention costs.

In addition, the Dodd-Frank Act limits the ability of payment card networks to impose certain restrictions because it allows merchants to: (i) set minimum dollar amounts (not to exceed $10) for the acceptance of a credit card (and allows federal governmental entities and institutions of higher education to set maximum amounts for the acceptance of credit cards) and (ii) provide discounts or incentives to encourage consumers to pay with cash, checks, debit cards or credit cards.

The rules also contain prohibitions on network exclusivity and merchant routing restrictions that require a card issuer to enable at least two unaffiliated networks on each debit card, prohibit card networks from entering into exclusivity arrangements and restrict the ability of issuers or networks to mandate transaction routing requirements. The prohibition on network exclusivity has not significantly affected our ability to pass on network fees and other costs to our customers, nor do we expect it to in the future.

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

Money Transmission, SaleThe CFPB has significant authority to regulate consumer financial products in the U.S., including consumer payments, and similar products. The FTC, state attorneys general and similar regulatory agencies in other jurisdictions may have broad consumer protection mandates that could result in the promulgation and interpretation of Checksrules and Payment Instrument Laws and Regulations

Furthermore, certain of our authorized agents, maintaining permissible investmentsbusinesses are regulated as money transmitters or otherwise require licensing in an amount equalone or more states or jurisdictions, subjecting us to or in excess of our outstanding payment obligations, recordkeeping and reporting and disclosures to consumers. Our Business and Consumer Solutions segment is also subject to periodic examinations by the relevantvarious licensing, authorities, which may include reviews of our compliance practices, policies and procedures, financial position and related records, various agreements that we have with our issuing banks, distributorssupervisory and other third parties, privacy and data security policies and procedures and other matters related to our business.requirements.

Banking Laws andFinancial Institution Regulations

Because we provide electronicdigital payment processing services to banks and other financial institutions, we are subject to examination by the Federal Financial Institutions Examination CounselCouncil (the "FFIEC"), an interagency body comprised primarily of federal banking regulators, and we are also subject to supervision or examination, as may be applicable, by the various state and international financial regulatory agencies that supervise and regulate the financial institutions for which we provide electronicdigital payment processing and other payment related services. The FFIEC examines large data processors in order to identify and mitigate risks associated with systemically significant service providers, including specifically the risks they may pose to the banking industry.

Privacy, Information Security and Other Business Practices Regulation

Aspects of our business are also subject, directly or indirectly, to businessprivacy and trade practices regulationdata protection regulations in the United States, the United Kingdom, the European Union ("EU") and elsewhere. For example,In most of the countries in the United States,which we and our financial institution customers are, respectively, subject to the Federal Trade Commission’s and the federal banking regulators’ privacy and information safeguardingoperate, these laws impose requirements under the Gramm-Leach-Bliley Act. These requirements limiton the manner in which personal information maycan be collected, processed, stored used and disclosed. The Federal Trade Commission’s information safeguarding rules require us to develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate for our size and complexity, the nature and scope of our activities and the sensitivity of any customer information at issue. In many jurisdictions, including every U.S. State, consumers must be notifiedshared. They also impose requirements, which vary materially by jurisdiction, in the event of a personal data breach,breach.

Compliance with the data protection regulations applicable to us or our customers requires increasing resources devoted to monitoring changes and such notificationdeveloping solutions for our affected businesses. Maintaining compliance over time could require substantive technology infrastructure and process changes across many of the Company’s businesses. Noncompliance with the EU General Data Protection Regulation (“GDPR”), the Gramm-Leach-Bliley Act ("GLBA"), the California Privacy Rights Act, the U.S. Health Insurance Portability and Accountability Act of 1996 or similar regulations could lead to substantial regulatory fines and penalties, or in some cases, damages resulting from private causes of action. Evolving data localization requirements continuemay affect how we provide services to increasecustomers in scoperegions like the EU and cost. The changingAsia-Pacific. Additionally, evolving sector-specific regulations that affect the payments industry may introduce overlap or conflict with data privacy regulations, and these conflicts in regulatory requirements may affect our operations.

New regulations (including the EU Artificial Intelligence Regulation and new state laws in the United States Europeor a possible federal privacy law) and elsewhere, includingnew interpretations of existing regulations, such as the adoption by the European Union of the General Data Protection Regulation,Federal Trade Commission ("FTC") Act, GLBA, and the California Consumer Privacy Act, which became effective in January 2020,GDPR, could create new individual privacy rights for individuals and impose increasednew obligations onfor companies handling personal data.information. These regulations could limit our ability to use and share personal or other data and increase costs related to compliance. In addition, multiple states, Congressemerging technologies including innovations in machine learning and regulatorsartificial intelligence are expected to continue to drive regulation targeted to the specific risks anticipated from these technologies.

As our portfolio of services evolves, we may offer more services outside the United States are considering similar lawsof our traditional business-to-business interaction context. As we interact directly with consumers, in conjunction with our existing customers and partners or directly on our own behalf, our compliance obligations under privacy regulations which could create new individual privacy rights and impose increased obligations on companies handling personal data. See "Item 1A - Risk Factors" for additional discussion of the potential risks associated with future changes in laws or regulations.may expand.

Anti-Money Laundering, Anti-Corruption and Counter Terrorist RequirementsSanctions Regulations

In many countries, we are legally or contractually required to comply with the anti-money laundering laws and regulations, such as, in the United States, the Bank Secrecy Act, as amended by the USA PATRIOT Act, (collectively, the "Bank Secrecy Act"), and similar laws of

The Financial Crimes Enforcement NetworkWe are subject to anti-corruption laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar laws outside of the U.S. Department of the Treasury ("FinCEN") has issued a rule regarding the applicability of the Bank Secrecy Act's anti-money laundering provisions to "prepaid access programs." This rulemaking clarifies the anti-money laundering obligations for entities,, such as our Businessthe U.K. Bribery Act, that prohibit the making or offering of improper payments to foreign government officials and Consumer Solutions businesspolitical figures. The FCPA has a broad reach and its distributors, engaged in the provisionrequires maintenance of appropriate records and sale of prepaid access devices like our GPR prepaid cards. Certain of our operating subsidiaries have registered with FinCEN as a money services business. This registration results in our having direct responsibilityadequate internal controls to maintainprevent and implement an anti-money laundering compliance program for such subsidiaries.detect possible FCPA violations.

State Wage Payment Laws and Regulations

The use of payroll card programs as a means for an employer to remit wages or other compensation to its employees or independent contractors is governed by state labor laws related to wage payments, which laws are subject to change. The paycard portion of our Business and Consumer Solutions segmentbusiness includes payroll cards and convenience checks and is designed to allow employers to comply with applicable state wage and hour laws. Most states permit the use of payroll cards as a method of paying wages to employees, either through statutory provisions allowing such use or, in the absence of specific statutory guidance, the adoption by state labor departments of formal or informal policies allowing for their use. Nearly every state allowing payroll cards places certain requirements and/or restrictions on their use as a wage payment method, the most common of which involve obtaining the prior written consent of the employee or independent contractors, limitations on fees and disclosure requirements.

Escheat Laws

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.

Debt Collection and Credit Reporting Laws

Portions of our business may be subject to the Fair Debt Collection Practices Act, ("FDCPA"), the Fair Credit Reporting Act ("FCRA") and similar state laws. These debt collection laws are designed to eliminate abusive, deceptive and unfair debt collection practices and may require licensing at the state level. The FCRA regulates the use and reporting of consumer credit information and also imposes disclosure requirements on entities that take adverse action based on information obtained from credit reporting agencies.

Telephone Consumer Protection Act

We are subject to the Telephone Consumer Protection Act ("TCPA") and various state laws to the extent we place telephone calls and short message service ("SMS") messages to customers and consumers. The TCPA regulates certain telephone calls and SMS messages placed using automatic telephone dialing systems or artificial or prerecorded voices.

Where to Find More Information

Certain materials relating to our corporate governance, including our codes of ethics applicable to our directors, senior financial officers and other employees, and our Global Responsibility Report are also available in the investor relations section of our website. Copies of our filings, specified exhibits and corporate governance materials are also available, free of charge, by writing us using the address on the cover of this Annual Report on Form 10-K. You may also telephone our investor relations office directly at (770) 829-8478. We are not including the information on our website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K.

ITEM 1A - RISK FACTORS

An investment in our common stock involves a high degree of risk. You should consider carefully the following risks and other information contained in this Annual Report on Form 10-K and other SEC filings before you decide whether to buy our common stock. The risks identified below are not all encompassing but should be considered in establishing an opinion of our future operations. If any of the events or conditions contemplated by the following discussion of risks should occur, our business, financial condition, liquidity, results of operations financial condition andand/or cash flows could suffer significantly. As

The following is a result,summary of the market priceprincipal risks that could materially and adversely affect our business, financial condition, liquidity, results of our common stock could decline and you may lose all operations and/or part of your investment in our common stock.cash flows.

Risks Related to Our Business Model and Operations Including the Use of Technology

Our inability to protect our systems and data from continually evolving cybersecurity threats or other technological risks could adversely affect our ability to deliver our services; damage our reputation among our customers, card issuers, financial institutions, card networks, partners and cardholders; adversely affect our continued card network registration or membership and financial institution sponsorship; and expose us to penalties, fines, liabilities, legal claims.claims and defense costs.

In order to provide our services, we process and store sensitive business and personal information, which may include credit and debit card numbers, bank account numbers, social security numbers, driver’s license numbers, names and addresses, and other types of personal information or sensitive business information. Some of this information is also processed and stored by financial institutions, merchants and other entities, as well as third-party service providers to whom we outsource certain functions and other agents, such as independent consultants and auditors, which we refer to collectively as our associated third parties. We may have responsibility to the card networks, financial institutions, regulators, and in some instances, our merchants, ISOs and/or individuals, for our failure or the failure of our associated third parties (as applicable) to protect this information.

We are a regular target of malicious third-party attempts to identify and exploit system vulnerabilities, and/or penetrate or bypass our security measures, in order to gain unauthorized access to our networks and systems or those of our associated third parties. Such attempts at unauthorized access couldcan lead, and occasionally have led, to the compromise of sensitive, business, personal or confidential information. As a result,To mitigate these risks, we follow a defense-in-depth model for cybersecurity, meaning we proactively seek to employ multiple methods at different layers to defend our systems against intrusion and attack and to protect the data we collect.possess. We have adopted policies and procedures, involving an incident response plan and both the board of directors and management oversight of cybersecurity risks, that we believe are designed to facilitate the identification, assessment and management of those risks including any risks that have the potential to be material. Our information security program establishes technical, physical and administrative controls to maintain the confidentiality, integrity and availability of our information and technical assets. However, we cannot provide any assurance that these cybersecurity risk management processes will be fully complied with or effective and we cannot be certain that these measures or other will always be successful andor will always be sufficient to counter, or to rapidly detect, contain, and remediate, all current and emerging technology threats.

OurMore particularly, our computer systems and/or our associated third parties’ computer systems couldhave been, and we expect will continue to be, subject totargeted for penetration on a regular basis, and our data protection measures may not prevent unauthorized access. The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, and are often difficult to detect and continually evolve and become more sophisticated. Threats to our systems and our associated third parties’ systems can derive from human error, fraud or malice on the part of employees or third parties, including state-sponsored organizations with significant financial and technological resources. ComputerIn addition, we have experienced and may continue to experience errors, interruptions or delays from computer viruses and other malware can be distributed andor vulnerabilities that could infiltrateinfect our systems or those of our associated third parties. In addition, denialDenial of service, ransomware or other attacks could be launched against us for a variety of purposes, including to interfere with our services or create a diversion for other malicious activities. Our defensive measures may not prevent downtime, unauthorized access or use of sensitive data. We have experienced such incidents in the past, and we cannot guarantee that we will be able to anticipate or detect all attacks or vulnerabilities or implement adequate preventative measures in the future. While we maintain first- and third-party insurance coverage that may cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses. Companies we acquire may require post-closing implementation of additional cyber defense methods to align with our standards and, as a result, there may be a period

of heightened risk between the closing of an acquisition date and the completion of such implementation. Further,Furthermore, certain of our third-party relationships are subject to our vendor management program and are governed by written contracts;contracts. We believe we have designed our risk identification, assessment, and management processes and procedures to account for cybersecurity risks associated with our use of third-party service providers; however, we do not control the actions of our associated third parties, and any problems experienced by these third parties, including those resulting from breakdowns or other disruptions in the services provided by such parties or cyberattacks, targeted attacks against our employees and associated third parties and security breaches, could adversely affect our ability to service our customers or otherwise conduct our business.

In addition, we impose contractual requirements on our counterparties, including vendors and other third parties, related to the use and security of personal data and other confidential information, along with compliance with applicable privacy and security laws. We cannot provide any assurance that thethese contractual requirements related to use, security and privacy that we impose on our associated third partiesthose who have access to this data will be followed or will be adequate to prevent the misuse of this data. AnyWe have occasionally received notifications from vendors and other third parties regarding the exposure of or unauthorized access to our data stored on their information systems, and any future misuse or compromise of personal information stored on those systems, or any other failure by a vendor or other third party to adequately enforce theseabide by our contractual requirements, could result inexpose us to regulatory fines, third-party liability, protracted and costly litigation and, with respect to misuse of the personal information of our customers, lost revenue and reputational harm.

Any type of security breach, attack or misuse of data described above or otherwise, whether experienced by us or an associated vendor or other third party, could harm our reputation andreputation; deter existing and prospective customers from using our services or from making electronicdigital payments generally,generally; increase our operating expenses in order to contain and remediate the incident,incident; expose us to unanticipated or uninsured liability,liability; disrupt our operations (including potential service interruptions),; distract our management,management; increase our risk of litigation or regulatory scrutiny,scrutiny; result in the imposition of penalties and fines under state, federal and foreign laws or by the card networks,networks; and adversely affect our continued card network registration or membership

We may experience softwareSoftware and hardware defects, failures, undetected errors, and development delays which could affect our ability to deliver our services, damage customer relations, decrease our potential profitability and expose us to liability.liability and have an adverse effect on our business, financial condition and results of operations.

Our core services are based on software and computing systems that oftenmay encounter development delays, and the underlying software may contain undetected errors, viruses, defects or defects.vulnerabilities. The hardware infrastructure on which our systems run may have a faulty component or fail. Defects in our software services, andunderlying hardware, or errors or delays in our processing of electronicdigital transactions could result in additional development costs, diversion of technical and other resources from our other development efforts, and could result in loss of credibility with current or potential customers, harm to our reputation and exposure to liability claims.

Our systems or our third-party providers' systems may fail, which could interrupt our service, cause us to lose business, increase our costs and expose us to liability.

The payments technology industry is highly competitive and highly innovative, and some of our competitors are larger and have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services offered to customers and the ability to develop new and disruptive technologies.

We operate in the payments technology industry, which is highly competitive.competitive and highly innovative. In this industry, our primary competitors include other independent payment processors, credit card processing firms, third-party card processing software institutions, as well as financial institutions, ISOs, payment facilitators, prepaid programs managers and, potentially, card networks. We compete with manySome of our current and potential competitors may be larger companies thatthan we are and have greater financial and operational resources or brand recognition than we have. Our competitors that are financial institutions or subsidiaries of financial institutions do not incur the costs associated with being sponsored by a direct member for participation in the card networks, as we do in certain jurisdictions, and may be able to settle transactions more quickly for merchants than we can. These financial institutions may also provide payment processing services to merchants at lower margins or at a loss in order to generate banking fees from the merchants. It is also possible that larger financial institutions, including some who are customers of ours, could decide to perform in-house some or all of the services that we currently provide or could provide. These attributes may provide them with a competitive advantage in the market.

Furthermore, we are facing increasing competition from nontraditional competitors, including new entrant technology companies, who offer certain innovations in payment methods. Some of these competitors utilize proprietary software and service solutions. Some of these nontraditional competitors have significant financial resources and robust networks and are highly regarded by consumers. In addition, some nontraditional competitors, such as private companies or startup companies, may be less risk averse than we are and, therefore, may be able to respond more quickly to market demands. These competitors may compete in ways that minimize or remove the role of traditional card networks, acquirers, issuers and processors in the electronicdigital payments process. If these nontraditional competitors gain a greater share of total electronicdigital payments transactions, it could have a materialan adverse effect on our business, financial condition, results of operations and cash flows.

In order to remain competitive and to continue to increase our revenues and earnings, we must continually and quickly update our services, a process that could result in higher costs and the loss of revenues, earnings and customers if the new services do not perform as intended or are not accepted in the marketplace.

The payments technology industry in which we compete is characterized by rapid technological change, new product introductions, evolving industry standards and changing customer needs. In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, products, mobile payment applications, ecommerce services and other new offerings emerging in the payments technology industry. These projects carry the risks associated with any development effort, including cost overruns, delays in delivery and performance problems.problems, which could in turn lead to impairment of long-lived assets associated with projects. In the payments technology markets, these risks are even more acute. Any delay in the delivery of new services or the failure to differentiate our services could render our services less desirable to customers, or possibly even obsolete. Furthermore, as the market for alternative payment processing services evolves, it may develop too rapidly or not rapidly enough for us to recover the costs we have incurred in developing new services targeted at this market.

In addition, certain of the services we deliver to the payments technology marketsmarket are designed to process very complex transactions and deliver reports and other information on those transactions, all at very high volumes and processing speeds. Any failure to deliver an effective, accurate, compliant and secure product or any performance issue that arises with a new product or service could result in significant processing or reporting errors or other losses. We rely in part on third parties, including some of our competitors and potential competitors, for the development of and access to new technologies. As a result of these factors, ourIf development efforts could result in higher costs that could reduce our earnings in addition to a loss of revenues and earningsare required or if promised new services are not delivered timely to our customers or do not perform as anticipated.anticipated, we could incur higher costs, a loss of revenues and lower earnings and cash flows.

Our revenues from the sale of services to merchants that accept Visa and Mastercard are dependent upon our continued Visa and Mastercard registrations, financial institution sponsorship and, in some cases, continued membership in certain card networks.

In order to provide our Visa and Mastercard transaction processing services, we must be either a direct member or be registered as a merchant processor or service provider of Visa and Mastercard, respectively. Registration as a merchant processor or service provider is dependent upon our being sponsored by Members of each organization in certain jurisdictions. If our sponsor financial institution in any market should stop providing sponsorship for us, we would need to find another financial institution to provide those services or we would need to attain direct membership with the card networks, either of which could prove to be difficult and expensive. Relatedly, transitioning to a new sponsor financial institution requires technical development work, which takes time. If we arewere unable to find a replacement financial institution to provide sponsorship or attain direct membership or unable to transition to a new sponsor financial institution in a timely manner, we may no longer be able to provide processing services to affected customers and potential customers in that market, which would negatively affect our revenues, earnings and cash flows. Furthermore, some agreements with our financial institution sponsors give them substantial discretion in approving certain aspects of our business practices, including our solicitation, application and qualification procedures for merchants and the terms of our agreements with merchants. Our sponsors' discretionary actions under these agreements could have a material adverse effect on our business, financial condition and results of operations and cash flows.operations. In connection with direct membership, the rules and regulations of various card associations and networks prescribe certain capital requirements. Any increase in the capital level required would limit our use of capital for other purposes.

The termination of our registration, or any changes in the rules of Visa or Mastercard rulesor any other network that would impair our registration or prevent us from providing services to our customers, could require us to stop providing Visa and Mastercard payment processing services or prevent us from successfully submitting transactions to such network, which would make it impossible for us to conduct our business on its current scale. The rules of the card networks may be influenced by card issuers, and some of those issuers also provide acquiring services and aremay be our competitors or our customers in both the Merchant Solutions and Issuer Solutions segments.competitors. If we fail to comply with the applicable requirements of the card networks, the card networks could seek to fine us, suspend us or terminate our registrations or membership. The termination of our registrations or our membership or our status as a service provider or a merchant processor, or any changes in card association or other network rules or standards, including interpretation and implementation of the rules or standards, that increase the cost of doing business or limit our ability to provide transaction processing services to our customers, could have a material adverse effect on our business, financial

We rely on various financial institutions to provide clearing services in connection with our settlement activities. If we are unable to maintain clearing services with these financial institutions and are unable to find a replacement, our business may be adversely affected.

We rely on various financial institutions to provide clearing services in connection with our settlement activities. If such financial institutions should stop providing clearing services, we would have to find other financial institutions to provide those services. If we were unable to find a replacement financial institution we may no longer be able to provide processing services to certain customers, which could negatively affect our financial position,condition, results of operations and cash flows.

Increased merchant, referral partner, ISO or ISOpayment facilitator attrition could cause our financial results to decline.

We experience attrition in merchant credit and debit card processing volume resulting from several factors, including businessmerchant closures, transfersloss of merchantsmerchant accounts to our competitors, unsuccessful contract renewal negotiations and account closures that we initiate for various reasons, such as heightened credit risks or contract breaches by merchants. Our referral partners are a significant source of new business. If a referral partner or an ISO switches to another transaction processor, terminates our services, internalizes payment processing functions that we perform, merges with or is acquired by one of our competitors, or shuts down or becomes insolvent, we may no longer receive new merchant referrals from such referral partner, and we risk losing existing merchants that were originally enrolled by the referral partner or ISO.partner. We cannot predict the level of attrition in the future and it could increase. Higher than expected attrition could negatively affect our results, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our future growth depends in part on the continued expansion within markets in which we already operate, the emergence of new markets, and the continued availability of alliance relationships and strategic acquisition opportunities.

Our future growth and profitability depend upon our continued expansion within the markets in which we currently operate, the further expansion of these markets, the emergence of other markets for payment technology and software solutions and our ability to penetrate these markets. As part of our strategy to achieve this expansion, we look for acquisition opportunities, investments and alliance relationships with other businesses, including referral partners, ISOs and other financial institutions, that will allow us to increase our market penetration, technological capabilities, product offerings and distribution capabilities. We may not be able to successfully identify suitable

Our expansion into new markets is also dependent upon our ability to apply our existing technology or to develop new applications to meet the particular service needs of each new market. We may not have adequate financial or technological resources to develop effective and secure services and distribution channels that will satisfy the demands of these new markets. If we fail to expand into new and existing markets for payment technology and software solutions, we may not be able to continue to grow our revenues and earnings.

Our ability to acquire other businesses or technologies, make strategic investments or integrate acquired businesses effectively may also be impaired by the effectsa variety of the COVID-19 pandemic, government actions in light of the pandemic,factors including adverse financial conditions, trade tensions and increased global scrutiny of foreign investments. For example, aA number of countries, including the U.S. and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions on foreign investments. Governments may continue to adopt or tighten economic sanctions, tariffs or trade restrictions of this nature, and such restrictions could negatively affect our business and financial results.

Further,Furthermore, our future success will depend, in part, upon our ability to manage our expanded business, which could pose substantial challenges for our management, including challenges related to the management and monitoring of new operations and associated costs and complexity. We may also face increased scrutiny from governmental authorities asif we become a result of increasing the size of ourlarger business.

There may be a decline in the use of cards and other electronicdigital payments as a payment mechanism for consumers or other adverse developments with respect to the card industry in general.

If consumers do not continue to use credit, debit or GPR prepaid debit cards or other electronicdigital payment methods of the type we process as a payment mechanism for their transactions or if there is a change in the mix of payments between cash, checks, credit cards and debit or GPR prepaid debit cards, whichthat is adverse to us, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Consumer credit risk may make it more difficult or expensive for consumers to gain access to credit facilities such as credit cards. Regulatory changes may result in financial institutions seeking to charge their customers additional fees for use of credit or debit cards. Such fees may result in decreased use of credit or debit cards by cardholders. In each case, our business, financial condition, results of operations and cash flows maycould be adversely affected.

Consolidation among financial institutions or among retail customers, including the merger of our customers with entities that are not our customers or the sale of portfolios by our customers to entities that are not our customers, could materially affect our financial position,condition, results of operationoperations and cash flows.

Consolidation among financial institutions, particularly in the area of credit card operations, and consolidation in the retail industry, is a risk that could negatively affect our existing customer agreements and future revenues with these customers.revenues. In addition, consolidation among financial institutions has led to an increasingly concentrated customer base, which results in a changing mix toward larger customers. Continued consolidation among financial institutions could increase the bargaining power of our current and future customers and further increase our customer concentration. Consolidation among financial institutions and retail customers and the resulting loss of any significant number of customers by us could have a material adverse effect on our financial position,condition, results of operations and cash flows.

If we do not renew or renegotiate our agreements on favorable terms with our customers within the Issuer Solutions segment, our business will suffer. The timing of the conversions or deconversions of card portfolio mayportfolios could also affect our revenues and expenses.

A significant amount of our Issuer Solutions segment revenues is derived from long-term contracts with large financial institutions and other financial service providers. The financial position of these customers and their willingness to pay for our

In addition, the timing of the conversion of card portfolios of new payment processing customers to our processing systems and the deconversion of existing customers to other systems affectscould affect our revenues and expenses. Due to a variety of factors, conversions and deconversions may not occur as scheduled, and this may have a material adverse effect on our financial position andcondition, results of operations.operations and cash flows.

We incur chargeback losses when our merchants refuse or cannot reimburse us for chargebacks resolved in favor of their customers. Any increase in chargebacks not paid by our merchants maycould adversely affect our business, financial condition, results of operations and cash flows.

In the event a dispute between a cardholder and a merchant is not resolved in favor of the merchant, the transaction is normally charged back to the merchant and the purchase price is credited or otherwise refunded to the cardholder. If we are unable to collect such amounts from the merchant's account or reserve account (if applicable), or if the merchant refuses or is unable, due to closure, bankruptcy or other reasons, to reimburse us for a chargeback, we may bear the loss for the amount of the refund paid to the cardholder. The risk of chargebacks is typically greater with those merchants that promise future delivery of goods and services rather than delivering goods or rendering services at the time of payment. We may experience significant losses from chargebacks in the future. Any increase in chargebacks not paid by our merchants could have a material adverse effect on our business, financial condition, results of operations and cash flows. We have policies to manage merchant-related credit risk and oftenattempt to mitigate such risk by requiring collateral and monitoring transaction activity. Notwithstanding our programs and policies for managing credit risk, it is possible that a default on such obligations by one or more of our merchants could have a material adverse effect on our business.

Fraud by merchants prepaid cardholders or others and losses from overdrawn cardholder accounts could have an adverse effect on our financial condition, results of operations and cash flows.

We have potential liability for fraudulent electronicdigital payment transactions or credits initiated by merchants or others, and our prepaid card programs expose us to threats involving the misuse of cards, collusion, fraud and identity theft.others. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. Failure to effectively manage risk and prevent fraud could increase our chargeback losses or cause us to incur other liabilities. It is possible that incidents of fraud could increase in the future. Increases in chargebacks or other liabilities could have a material adverse effect on our financial condition, results of operations and cash flows.

Additionally, COVID-19 has negatively affected the financial viability and operations of certain merchants. TheseThe accompanying consolidated financial statements reflect management’s estimates and assumptions related to allowances for transaction and credit losses utilizing the most currently available information. The future magnitude, duration and effects of the COVID-19 pandemic are difficult to predict at this time, and the ultimate effect could result in additional charges related to the recoverability of assets. Actual losses could differ materially from those estimates.

Increases in card network fees may result in the loss of customers and/or a reduction in our earnings.

 

From time-to-time, the card networks, including Visa and Mastercard, increase the fees that they charge processors. We could attempt tooften pass these increases along to our merchant customers, butcustomers; however, if merchants do not accept these increases, this strategy might result in the loss of customers to our competitors, who may not pass along the increases, thereby reducing our revenues and earnings. If competitive practices prevent us from passing along the higher fees to our merchant customers in the future, we may have to absorb all or a portion of such increases, thereby reducing our earnings.

The integration and conversion of our acquired operations or other future acquisitions, if any, could result in increased operating costs if the anticipated synergies of operating these businesses as one are not achieved, a loss of strategic opportunities if management is distracted by the integration process, and a loss of customers if our service levels drop during or following the integration process.

The acquisition, integration, and conversion of businesses and the formation or operation of alliances such as the Merger or joint ventures and other partnering arrangements involve a number of risks. Core risks are in the area of valuation (negotiating a fair price for the business based on sometimes limited diligence) and integration and conversion (managing the complex process of integrating

If the integration and conversion process does not proceed smoothly, the following factors, among others, could reduce our revenues and earnings, increase our operating costs, and result in us not achieving projected synergies:

Our business is subject to government regulation and oversight. Any new implementation of or changes made to laws, regulations or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development and compliance efforts or have an unfavorable effect on our ability to continue to offer certain services, or on our financial results and our cash flows.

OurAs a payments technology company, our business is affected by laws and complex regulations and examinations that affect us and our industry in the countries in which we operate. Regulation and proposed regulation of the payments industry has increasedhave continued to increase significantly in recent years. Failure to comply with regulations or guidelines may result in the suspension or revocation of a license or registration, the limitation, suspension or termination of service, and the imposition of civil and criminal penalties, including fines, or may cause customers or potential customers to be reluctant to do business with us, any of which could have an adverse effect on our financial condition.

Interchange fees are subject to intense legal, regulatory and legislative scrutiny worldwide. For instance, the Dodd-Frank Act restricts the amounts of debit card fees that certain issuing institutions can charge merchants and allows merchants to set minimum amounts for the acceptance of credit cards and to offer discounts for different payment methods. These types of restrictions could negatively affect the number of debit transactions, which would adversely affect our business. The Dodd-Frank Act also created the CFPB, which has assumed responsibility for enforcing federal consumer protection laws, and the Financial Stability Oversight Council, which has the authority to determine whether any nonbank financial company, such aslike us, should be supervised by the Board of Governors of the Federal Reserve on the ground that it is "systemically important" to the U.S. financial system. Any such designation would result in increased regulatory burdens on our business, which increases our risk profile and may have an adverse effect on our business, financial condition, results of operations and cash flows.

PortionsIn addition, U.S. banking agencies and the SEC have adopted or proposed enhanced cyber risk management standards that could apply to us and our financial institution clients and that would address cyber risk governance and management, management of internal and external dependencies, and incident response, cyber resilience and situational awareness. Several states and foreign countries also have adopted or proposed new privacy and cybersecurity laws targeting these issues. Legislation and regulations on cybersecurity, data privacy and data localization may compel us to enhance or modify our systems, invest in new systems or alter our business may be subject to the FDCPA, the FCRApractices or our policies on data governance and similar state laws. These debt collection laws are designed to eliminate abusive, deceptive and unfair debt collection practices and may require licensing at the state level.privacy. If we fail to comply with any of these laws,outcomes were to the extent they are applicable to us, we may be subject to fines, penalties and litigation.occur, our operational costs could increase significantly.

With respectThe rise in the use of generative artificial intelligence has dramatically altered the corporate landscape. Incorporating artificial intelligence, including machine learning technologies, into our businesses presents numerous risks and uncertainties. Furthermore, the global regulatory framework has not kept pace with the rapid developments in the generative artificial intelligence technology field, creating uncertainties regarding compliance with upcoming laws and regulations. Beyond legal considerations in the development and deployment of these models there exists an ethical consideration given the potential risk of generating misleading or harmful content. The unpredictable nature of outputs further amplifies this risk, potentially leading to unintended consequences and biases. Additionally, the absence of clear requirements pertaining to explainability and the data used to train these models, introduces the risk of intellectual property disputes, including the inability to protect or potential infringement claims regarding the artificially generated content. We are exploring opportunities to expand our Businessportfolio with artificial intelligence capabilities to strengthen our market position, amplify our teams' capabilities, and Consumer Solutions segment, because each distributor offers prepaid cards, reload services and/or money remittance services as an agentenhance our customers'

experiences. If we are unsuccessful in making a persuasive argument that a distributor should not be subject to such licensing requirements and it is therefore deemed to be in violation of one or more of the state money transmitter statutes, it could result in the imposition of fines, the suspension of the distributor’s ability to offer some or all of our related services in the relevant jurisdiction, civil liability and criminal liability, each of which could negatively affect our financial position and results of operations. Furthermore, if the federal government or one or more state governments impose additional legislative or regulatory requirements on our Business and Consumer Solutions segment, the issuing banks or the distributors, or prohibit or limit the activities of our Business and Consumer Solutions segment as currently conducted,doing so, we may be required to modify or terminate some or all of our Business and Consumer Solutions services offered in the relevant jurisdiction or certain of the issuing banks may terminate their relationship with us. Moreover, as a number of our Business and Consumer Solutions distributors are engaged in offering payday, title and/or installment loans, current and future legislative and regulatory restrictions that negatively affect their ability to continue their operations could have a corresponding negative effect oncompetitive disadvantage in developing new products and operating our revenuebusiness and earnings from these relationships, potentially resulting in a significant decline in revenue from the Business and Consumer Solutions segment.our customers may prefer different solutions.

Changes to legal rules and regulations, or interpretation or enforcement thereof, even if not directed at us, may require significant efforts to change our systems and services and may require changes to how we price our services to customers, adversely affecting our business. Even an inadvertent failure to comply with laws and regulations, as well as rapidly evolving social expectations of corporate fairness, could damage our business or our reputation. As varying or conflicting regulations come into existence across the jurisdictions in which we operate, we may have difficulty aligning our operations to comply with all applicable laws.

New or revised tax regulations, unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense.

Changes in tax laws or their interpretations could result in changes to enacted tax rates and may require complex computations to be performed that were not previously required, significant judgments to be made in interpretation of the new or revised tax regulations and significant estimates in calculations, as well as the preparation and analysis of information not previously relevant or regularly produced. Future changes in enacted tax rates could negatively affect our results of operations.

Our tax returns and positions are subject to review and audit by federal, state, local and international taxing authorities.An unfavorable outcome to a tax audit could result in higher tax expense, thereby negatively affecting our results of operations and cash flows.We have recognized estimated liabilities on the balance sheet for material known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the proper tax treatment of the item.These liabilities reflect what we believe to be reasonable assumptions as to the likely final resolution of each issue if raised by a taxing authority.While we believe that the liabilities are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be finally resolved at a financial amount nonot significantly more than any related liability.An unfavorable resolution, therefore, could negatively affect our financial position, results of operations and cash flows inliability on the current and/or future periods.balance sheet.

Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk.

We operate in a rapidly changing industry. Accordingly, our risk management policies and procedures may not be fully effective to identify, monitor and manage our risks. If our policies and procedures are not fully effective or if we are not always successful in identifying and mitigating all risks to which we are or may bebecome exposed, we may suffer uninsured liability, harm to our reputation or be subject to litigation or regulatory actions that could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are subject to risks associated with changes in interest rates or currency exchange rates, which could adversely affect our business, financial position,condition, results of operations and cash flows, and we may not effectively hedge against these risks.

A portion of our current indebtedness bears interest at a variable rate, and we may incur additional variable-rate indebtedness in the future. Increases inElevated interest rates willcould increase our cost of debt, and reduce our operating cash flows, limit options to refinance existing debt on favorable terms or at all, and could hinder our ability to fund our operations, capital expenditures, acquisitions, share repurchases or dividends.

We are also subject to risks related to the changes in currency exchange rates as a result of our investments in foreign operations and from revenues generated in currencies other than our reporting currency, the U.S. dollar. Revenues and profitprofits generated by international operations will increase or decrease compared to prior periods as a result of changes in currency exchange rates. Volatility in currency exchange rates has affected and may continue to affect our financial results.

In certain of the jurisdictions in which we operate, we may become subject to exchange control regulations that might restrict or prohibit the conversion of our foreign currencies into U.S. dollars or limit our ability to freely move currency in or out of particular jurisdictions. The occurrence of any of these factors could decrease the value of revenues we receive from our international operations and have a material adverse effect on our business.

We may seek to reduce our exposure to fluctuations in interest rates or currency exchange rates through the use of hedging arrangements. To the extent that we hedge our interest rate or currency exchange rate exposures, we forgo the benefits we would otherwise experience if interest rates or currency exchange rates were to change in our favor. Developing an effective strategy for dealing with movements in interest rates and currency exchange rates is complex, and no strategy can completely insulate us from risks associated with such fluctuations. In addition, a counterparty to the arrangement could default on its obligation, thereby exposing us to credit risk. We may have to repay certain costs, such as transaction fees or breakage costs, if we terminate these arrangements.

We currently maintain investment credit ratings with Moody's Investors Service and Standard & Poor's Ratings Services.nationally recognized statistical rating organizations. Unfavorable changes in the ratings that these rating agencies assign to our debt may ultimately negatively affect our access to the debt capital markets and increase the costs we incur to borrow funds. If ratings for our debt fall below investment grade, our access to the capital markets could become restricted, and our relationships with certain customers of our Issuer Solutions segment could also be affected. Future tightening in the credit markets and a reduced level of liquidity in many financial markets due to turmoil in the financial and banking industries could affect our access to the debt capital markets or the price we pay to issue debt. Additionally, our revolving credit facilities includefacility includes an increase in interest rates if the ratings for our debt are downgraded. 

Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business.

Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in our annual report. If we fail to maintain the adequacy of our internal controls, including, but not limited to, preventing unauthorized access to our systems, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting. Furthermore, this assessment may be complicated by any acquisitions we have completed or may complete.

In certain markets, including, without limitation, China, Greece and Spain, our member sponsors perform payment processing operations and related support services pursuant to services agreements. We expect that the member sponsors will continue to provide these services until such time as we may integrate these functions into our operations. Accordingly, we rely on our member sponsors to provide financial data, such as amounts billed to merchants, to assist us with compiling our accounting records. As such, our internal control over financial reporting could be materially affected, or is reasonably likely to be materially affected, by the internal control and procedures of our member sponsors in these markets. 

While we continue to dedicate resources and management time to ensuringensure that we have effective internal control over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our ability to timely generate accurate financial statements in conformity with accounting principles generally accepted in the United States, on the market's perception of our business and on our stock price.

We may not be able to successfully manage our intellectual property and may be subject to infringement claims.

In our rapidly developing legal framework, weWe rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our proprietary technology. Despite our efforts to protect our intellectual

We may also be subject to costly litigation in the event our services and technology are alleged to infringe upon another party’s proprietary rights. Third parties may have, or may eventually be issued, patents that could be infringed by our services or technology. Any of these third parties could make a claim of infringement against us with respect to our services or technology. We may also be subject to claims by third parties for breach of copyright, trademark or license usage rights. Any such claims and any resulting litigation could subject us to significant litigation costs and potential liability for damages. An adverse determination in any litigation of this type could limit our ability to use the intellectual property subject to these claims and require us to design around a third party’s patent,intellectual property, which may not be possible, or to license alternative technology from another party, which may be costly. In addition, such litigation is often time consuming and expensive to defend and could result in the diversion of the time and attention of our employees.

Risks Related to Our Capital Structure

Our substantial indebtedness could adversely affect us and limit our business flexibility.

We have a significant amount of indebtedness and may incur other debt in the future. Our level of debt and the covenants to which we agreed could have negative consequences onfor us, including, among other things, (1) requiring us to dedicate a large portion of our cash flow from operations to servicing and repayment of the debt; (2) limiting funds available for strategic initiatives and opportunities, working capital and other general corporate needs,needs; and (3) limiting our ability to incur certain kinds or amounts of additional indebtedness, which could restrict our flexibility to react to changes in our business, our industry and economic conditions.

We may not be able to raise additional funds to finance our future capital needs.

We may need to raise additional funds to finance our future capital needs, including developing new productsservices and technologies or to fund future acquisitions or operating needs. If we raise additional funds through the sale of equity securities, these transactions may dilute the value of our outstanding common stock. We may also decide to issue securities, including debt securities that have rights, preferences and privileges senior to our common stock. We may not be unableable to raise additional funds on terms favorable to us or at all. If financing is not available or is not available on acceptable terms, we may be unable to fund our future needs. This may prevent us from increasing our market share, capitalizing on new business opportunities or remaining competitive in our industry. In addition, adverse economic conditions or any downgrades in our credit ratings could affect our ability to obtain additional financing in the future and could negatively affect the terms of any such financing.

Our balance sheet includes significant amounts of goodwill and other intangible assets. The impairment of a portion of these assets could negatively affect our business, financial condition and results of operations.

As a result of our acquisitions, a significant portion of our total assets are intangible assets (including goodwill). Goodwill and intangible assets, net of amortization, together accounted for approximately 81%73% of our total assets as of December 31, 2020.2023. We expect to engage in additional acquisitions,acquisition activity from time-to-time, which may result in our recognition of additional intangible assets, including goodwill. We evaluate on a regular basis whether all or a portion of our goodwill and other intangible assets may be impaired. Under current accounting rules, any determination that impairment has occurred would require us to record an impairment charge, which would negatively affect our earnings. An impairment of a portion of our goodwill or other intangible assets could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to, or we may decide not to, pay dividends or repurchase shares at a level anticipated by our shareholders, which could reduce shareholder returns.

 

The extent to which we pay dividends on our common stock and repurchase our common stock in the future is at the discretion of our board of directors and will depend on, among other factors, our results of operations, financial condition, capital requirements and such other factors as our board of directors deems relevant. No assurance can be given that we will be able to or will choose to continue to pay any dividends or repurchase any shares in the foreseeable future.

We are subject to economic and geopolitical risk, health and social events or conditions, the business cycles and credit risk of our customers and the overall level of consumer, business and government spending, which could negatively affect our business, financial condition, results of operations and cash flows.

A downturnAdverse macroeconomic conditions in the economyany of our markets could force merchants, financial institutions or other customers to closecease operations or petition for bankruptcy protection, resulting in lower revenue and earnings for us and greater exposure to potential credit losses and future transaction declines. We also have a certain amount of fixed costs, including rent, debt service, and salaries, which could limit our ability to quickly adjust costs and respond to changes in our business and the economy. Changes in economic conditions could also adversely affect our future revenues and profits and causehave a materially adverse effect on our business, financial condition, results of operations and cash flows.

Reject losses arise from the fact that, inIn most markets, we collect our fees from our merchants on the first day after the monthly billing period. Thisperiod, which results in the build-up of a substantial receivable from our customers. If a merchant were to go out of business during the billing period, we may be unable to collect such fees, which could negatively affect our business, financial condition, results of operations and cash flows.

In addition, our business, growth, financial condition or results of operations could be materially adversely affected by public health emergencies, such as the COVID-19 pandemic, political and economic instability or changes in a country’s or region’s economic conditions; inflation;conditions, changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise;otherwise, increased difficulty of conducting business in a country or region due to actual or potential political or military conflict;conflict or action by the United States or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities. A possible slowdown

Risks associated with heightened geopolitical and economic instability, include among others, reduction in consumer, government or corporate spending, international sanctions, embargoes, heightened inflation and actions taken by central banks to counter inflation, volatility in global trade caused by increasing tariffsfinancial markets, increased cyber disruptions or attacks, higher supply chain costs and increased tensions between countries in which we may operate, which could result in charges related to the recoverability of assets, including financial assets, long-lived assets and goodwill, and other restrictions could decrease consumer or corporate confidencelosses, and reduce consumer, government and corporate spending in countries inside or outside the United States, which could adversely affect our financial condition and results of operations.

On January 31, 2020,Climate-related events, including extreme weather events and natural disasters and their effects on critical infrastructure in the United Kingdom ceased to be a member state of the European Union ("Brexit"), with a transition period that ended on December 31, 2020. During the transition period, existing arrangements between the U.K. and the E.U. remained in place. Following the transition period, the U.K. is no longer a part of the E.U. single market. In December 2020, the U.K and E.U. announced they had entered into a post-Brexit deal on certain aspects of trade and other strategic and political issues. This new agreementU.S. or internationally, could potentially avoid some of the anticipated disruption of the U.K.’s exit from the E.U. While we have not experienced significant adverse effects on our U.K. businessoperations, customers or third-party suppliers. Furthermore, our shareholders, customers and its financial condition, results of operationsother stakeholders have begun to consider how corporations are addressing sustainability matters, which include environmental and cash flows to date as acorporate responsibility issues. Government regulators, investors, customers and the general public are increasingly focused on sustainability practices and disclosures, and views on this topic are diverse and rapidly changing. These shifts in investing priorities may result in adverse effects on the trading price of the new deal, no assuranceCompany's common stock if investors determine that the Company has not made sufficient progress on sustainability matters. Furthermore, developing and acting on these initiatives, and collecting, measuring and reporting related information and metrics can be given regardingcostly, difficult and time consuming, and are subject to evolving reporting standards and/or contractual obligations. The standards and laws by which sustainability efforts are tracked and measured are in many cases new, have not been harmonized, and continue to evolve.

We could also face potential negative sustainability related publicity in traditional media or social media if shareholders or other stakeholders determine that we have not adequately considered or addressed sustainability and governance matters. We have been the potential future effectsrecipient of proposals from shareholders to promote their corporate responsibility positions, and we may receive

If we lose key personnel or are unable to attract and hire additional qualified personnel as we grow, our business could be adversely affected.

All of our businesses function at the intersection of rapidly changing technological, social, economic and regulatory developments that requiresrequire a wide ranging set of expertise and intellectual capital. To successfully compete and grow, we must recruit, develop, retain and retainmotivate personnel who can provide the needed expertise across the entire spectrum of intellectual capital needs. In addition, we must develop our personnel to fulfill succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of human capital. However, the market for qualified personnel is extremely competitive, and we may not succeed in recruiting additional personnel or may fail to effectively replace current personnel who depart with qualified or effective successors. We cannot assurebe assured that key personnel, including executive officers, will continue to be employed or that we will be able to attract and retain qualified personnel in the future. Failure to retain, develop or attract key personnel could disrupt our operations and adversely affect our business and future success, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position,condition, results of operations and cash flows.

We are from time-to-time involved in various litigation matters and governmental or regulatory investigations or similar matters arising out of our current or future business. Our insurance or indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Litigation could be costly, time-consuming and divert attention of management from daily operational needs. Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws.

ITEM 2 - PROPERTIES

We have properties located within the various global geographic markets in which we conduct business. Our properties include office space and data centers, most of which we lease. We believe that all of our properties will beare suitable and adequate for our business as presently conducted. See "Note 6—7—Leases" in the notes to the accompanying consolidated financial statements for further discussion of our leases.

We are party to a number of claims and lawsuits incidental to our business. In our opinion, the liabilities, if any, that may ultimately result from the outcome of such matters, individually or in the aggregate, are not expected to have a material adverse effect on our financial position, liquidity, results of operations or cash flows. See "Note 17—Commitments and Contingencies" in the notes to the accompanying consolidated financial statements for information about certain legal matters.

Our common stock trades on the New York Stock Exchange under the ticker symbol "GPN." As of February 16, 2021,12, 2024, there were 13,49011,706 shareholders of record.

Equity Compensation Plan Information

The following graph compares our cumulative shareholder returns with the Standard & Poor's Information Technology("S&P") 500 Index and the Standard & Poor'sS&P 500 Financials Index for the years ended December 31, 2023, 2022, 2021, 2020, 2019 and 2018, 2017, and the 2016 fiscal transition period and the year ended May 31, 2016.2019. The line graph assumes the investment of $100 in our common stock, the Standard & Poor's ("S&P")&P 500 Index and the Standard & Poor's Information TechnologyS&P 500 Financials Index on MayDecember 31, 20152018 and assumes reinvestment of all dividends.

Recent Sales of Unregistered Securities

There were no unregistered sales of equity securities during the year ended December 31, 2020.2023.

Issuer Purchases of Equity Securities

ITEM 6 - SELECTED FINANCIAL DATA[RESERVED]

 

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with "Item 6 - Selected Financial Data" and "Item 8 - Financial Statements and Supplementary Data." This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on a number of assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements as a result of many known and unknown factors, including but not limited to, those discussed in "Item 1A - Risk Factors." See "Cautionary Notice Regarding Forward-Looking Statements" located above in "Item 1 - Business."

Discussions of our results of operations for the year ended December 31, 20192022 compared to the year ended December 31, 20182021 that have been omitted under this item can be found in "Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2019,2022, which was filed with the United States Securities and Exchange Commission on February 21, 2020.17, 2023.

Executive Overview

We are a leading pure play payments technology company delivering innovative software and services to our customers globally. Our technologies, services and employeeteam member expertise enableallow us to provide a broad range of solutions that allowenable our customers to operate their businesses more efficiently across a variety of channels around the world. We operate in three reportable segments: Merchant Solutions, Issuer Solutions and Business and Consumer Solutions. See "Note 16—Segment Information" in the notes to the accompanying consolidated financial statements for additional information about our segments.

On September 18, 2019,We have grown organically, as well as through acquisitions, and we consummatedcontinue to invest in new and innovative technology solutions, infrastructure to support our merger with Total System Services, Inc. ("TSYS") (the "Merger") for total purchase consideration of $24.5 billion, primarily funded with sharesgrowing business and the ongoing consolidation and enhancement of our common stock. Prioroperating platforms. These investments include new product development and innovation to the Merger, TSYS was a leading global payments provider, offering seamless, securefurther enhance and innovativedifferentiate our suite of technology and cloud-based solutions available to issuers, merchantscustomers, along with migration of certain underlying technology platforms to cloud environments to enhance performance, improve speed to market and consumers. Consolidated operating results for the year ended December 31, 2020 reflect a full year of the acquired operations of TSYS, while the prior year includes the acquired operations of TSYS only from the acquisition date through December 31, 2019.drive cost efficiencies. We also continue to focusexecute on mergerintegration and integrationother activities, such as combining business operations, aligning go-to-market strategies, streamlining technology infrastructure, eliminating duplicative corporate and operational support structures and realizing scale efficiencies. We also continue to invest in software and hardware to support the development of new technologies, infrastructure to support our growing business and continued consolidation and enhancement of our operating platforms. See "Note 2—Acquisitions" in the notes to the accompanying consolidated financial statements for further discussion of the Merger.

Highlights related to spread or has a resurgence in certain jurisdictions. The pandemic and measures to prevent its spread affected our financial condition at December 31, 2023, and results during 2020. As governments took actionsof operations for the year then ended, include the following:

The payments technology industry continues to evolve and grow worldwide and as a result, certain large payment technology companies, including us, have expanded operations globally by pursuing acquisitions and creating alliances and joint ventures. We expect to continue to expand into new markets internationally and pursue additional acquisitions and joint ventures in existing markets to increase our scale and improve our competitiveness in existing markets by pursuing additional acquisitions and joint ventures.competitiveness.

The industry continues to grow globally as a result of wider merchant acceptance and increased use of credit and debit cards, advances in payment processing technology and migration to ecommerce, omnichannel and contactless payment solutions. The proliferation of credit and debit cards, as well as other digital payment solutions, has made the acceptance of electronicdigital payments a virtual necessity for many businesses, regardless of size, in order to remain competitive. Further,Furthermore, the expanding digitization of the economy and availability and access to financial services increases the demand for cards and electronic payments,digital payment solutions, which in turn drives growth in acceptance and transaction volumes.

We also believe new markets will continue to develop and expand in areas that have been previously dominated by paper-based transactions. We expect industries such as education, government and healthcare, as well as recurring payments and business-to-businessB2B payments, to continue to see transactions migrate to electronic-baseddigital-based solutions. We anticipate that the continued development of new services and technologies, the emergence of new vertical markets and continued expansion of technology-enabled ecommerce and omnichannel solutions, including expanded scale and market reach through new innovative cloud-based capabilities and strategic partnerships, will be a factor in the growth of our business and our revenuerevenues in the future. Furthermore, due to its benefits and growth potential, we anticipate the increased exploration of use of artificial intelligence in the payments industry.

For a further discussion of trends, uncertainties and other factors that could affect our continuing operating results, see the section entitled "Risk Factors" in Item 1A1A.

Certain of our operations are conducted in foreign currencies. Consequently, a portion of our revenues and expenses has been and may continue to be affected by fluctuations in foreign currency exchange rates. A strengthening of the U.S. dollar or other significant fluctuations in foreign currency exchange rates could result in an adverse effect on our future financial results; however, we are unable to predict the extent of the potential effect on our financial results.

We have sought to reduce our interest rate risk through issuance of fixed rate debt in place of variable rate debt, including the effect of interest rate swap hedging arrangements to convert a significant portion of the eligible variable rate borrowings under our revolving credit facility to a fixed rate. However, inflationary pressure or interest rate fluctuations have affected and could continue to affect our business and financial performance as a result of higher costs and/or lower consumer spending. In addition, continued inflation or a rise in interest rates could result in an adverse effect on our future financial results and the recoverability of assets. However, as the future magnitude, duration and effects of these conditions are difficult to predict at this Annual Reporttime, we are unable to predict the extent of the potential effect on Form 10-K.our financial results.

Results of Operations

We provide payment technology and software solutions to customers and fund settlement either directly, in markets where we have direct membership with the payment networks, or through our relationship with a member financial institution in

For the purpose of discussing segment operations, we refer to "operating income," which is calculated by subtracting segment direct expenses from segment revenues. Overhead and shared expenses, including share-based compensation, are not allocated to segment operations; they are reported in the caption "Corporate." Similarly,Impairment of goodwill and gains or losses on business dispositions are also not included in determining segment operating income. In addition, in discussing segment operations we refer to "operating margin" regarding segment operations,margin," which is calculated by dividing segment operating income by segment revenues.

As a result of the Merger, weWe have equity method investments, including a 45% investmentinterest in China UnionPay Data Co., Ltd., which we account for using the equity method of accounting. Equity in income of equity method investments reflects our proportional share of earnings from these investments.

The following table sets forth key selected financial data for the years ended December 31, 20202023 and 2019,2022, this data as a percentage of total revenues, and the changes between periods in dollars and as a percentage of the prior-period amount. The income statement data for the years ended December 31, 20202023 and 2019 are2022 is derived from the accompanying consolidated financial statements included in "Item 8 - Financial Statements and Supplementary Data."

Revenues

Consolidated revenues for the year ended December 31, 20202023 increased by 51.1%7.6% to $7,423.6$9,654.4 million, compared to $4,911.9 million for the prior year, primarily due to additional revenues from the acquired operations of TSYS. Revenues from the acquired operations of TSYS were $4,205.2 million for the year ended December 31, 2020, compared to $1,215.0$8,975.5 million for the prior year. StartingThe increase in mid-March 2020, COVID-19 hadrevenues was primarily due to an unfavorable effect on our revenues; however, we saw improvements throughoutincrease in transaction volumes, including from the latter half of 2020.EVO business acquired in 2023.

Selling, general and administrative expenses included acquisition and integration expenses of $341.4 million and $258.0 million for the COVID-19 pandemic.years ended December 31, 2023 and 2022, respectively. Share-based compensation expense was $209.0 million and $163.3 million for the years ended December 31, 2023 and 2022, respectively.

Consolidated operating income for the year ended December 31, 2020 increased to $894.02023 was $1,716.4 million, compared to $791.4$640.2 million for the prior year. Operating margin for the year ended December 31, 2020 decreased to 12.0%, compared to 16.1% for the prior year. Consolidated operating income for the year ended December 31, 2020 includes income from the acquired operations of TSYS of $538.0 million compared to $78.7 million for the prior year. Consolidated operating income for the year ended December 31, 2020 reflects an increase in amortization of acquired intangibles and acquisition and integration expenses of $589.8 million and $64.4 million, respectively, compared to the prior year. The unfavorable effects of COVID-19 on our revenues and incremental expenses directly related to COVID-19 also negatively affected consolidated operating income and operating margin compared to the prior year. We saw improvement in our financial results and positive trends throughout the latter half of 2020 as a result of the recovery seen across our markets. Further, Merger-related cost synergies and cost-saving actions taken to mitigate the financial effects of the COVID-19 pandemic had a favorable effect on operating income and operating margin for the year ended December 31, 2020.