1123360--7/28/2010--GLOBAL_PAYMENTS

related topics

{system, service, information}

{regulation, government, change}

{product, market, service}

{operation, international, foreign}

{personnel, key, retain}

{customer, product, revenue}

{tax, income, asset}

{control, financial, internal}

{regulation, change, law}

{cost, operation, labor}

{condition, economic, financial}

{cost, contract, operation}

{provision, law, control}

{stock, price, share}

{competitive, industry, competition}

{capital, credit, financial}

Our revenues from the sale of services to merchants that accept Visa cards and MasterCard cards are dependent upon our continued Visa and MasterCard registration and financial institution sponsorship. If we fail to comply with the applicable requirements of the card networks, they could seek to fine us, suspend us or terminate our registrations. If our merchants or ISOs incur fines or penalties that we cannot collect, we could end up bearing them. Security breaches could harm our reputation and adversely affect future earnings Our systems and 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. Utility and system interruptions could adversely affect our operations. We may experience software defects, undetected errors, and development delays, which could damage customer relations, decrease our potential profitability and expose us to liability. Loss of key Independent Sales Organizations could reduce our revenue growth. Risks associated with operations outside the United States could adversely affect our business, financial position and results of operations. Some of our competitors are larger and have greater financial and operational resources than we do, which may give them an advantage in our market with respect to the pricing of our products and services offered to our customers, our ability to develop new technologies, and our ability to complete acquisitions. We are subject to the business cycles and credit risk of our merchant customers and our independent sales organizations. Risks associated with reduced levels of consumer spending could adversely affect our revenues and earnings. We incur chargeback liability when our merchants refuse or cannot reimburse chargebacks resolved in favor of their customers. We cannot accurately anticipate these liabilities, which may adversely affect our results of operations and financial condition. Fraud by merchants or others could have an adverse effect on our operating results and financial condition. In order to remain competitive and to continue to increase our revenues and earnings, we must continually update our products and services, a process which could result in increased research and development costs in excess of historical levels and the loss of revenues, earnings and customers if the new products and services do not perform as intended or are not accepted in the marketplace. In order for us to continue to grow and increase our profitability, we must continue to expand our share of the existing electronic payments markets and also expand into new markets. Any new or changes made to laws, regulations, card network rules or other industry standards affecting our business in any of the geographic regions in which we operate may require significant development efforts or have an unfavorable impact to our financial results. Increases in credit card network fees may result in the loss of customers or a reduction in 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 both 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. There may be a decline in the use of credit cards as a payment mechanism for consumers or adverse developments with respect to the credit card industry in general. Continued consolidation in the banking and retail industries could adversely affect our growth. If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected. Our financial results may be adversely affected if we have to impair our intangible assets or goodwill. Unfavorable resolution of tax contingencies or changes to enacted tax rates could adversely affect our tax expense. We may become subject to additional United States, state or foreign taxes that cannot be passed through to our merchant services customers, in which case our earnings could be adversely affected. 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 and stock price. Anti-takeover provisions of our articles of incorporation and by-laws, our rights agreement and provisions of Georgia law could delay or prevent a change of control that individual shareholders favor. We may not be able to or we may decide not to pay dividends at a level anticipated by shareholders on our common stock, which could reduce shareholder returns. We conduct a portion of our business in various Eastern European and Asia-Pacific countries, and the Russian Federation, where the risk of continued political, economic and regulatory change that could impact our operating results is greater than in the United States.

Full 10-K form ▸

1123360--7/28/2010--GLOBAL_PAYMENTS_INC