CPAY

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How CPAY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

62%

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−64

words, now 12,963

New in FY2025

Incidents affecting these third parties, including disruptions, system outages, technology failures or vulnerabilities, capacity constraints, insolvency, or other cybersecurity incidents could disrupt our services and extend recovery times beyond our control.
Our subsidiaries operate in various countries and country-specific factors, such as power availability, telecommunications carrier redundancy, embargoes and regulations can adversely impact our information processing by, or for, our local subsidiaries.
However, there could be material delays in fully activating backup facilities depending on the nature of the breakdown, security breach, cyberattack or catastrophic event (such as fire, explosion, flood, pandemic, natural disaster, power loss, telecommunications failure or physical break-in).
Disruptions could result in transaction delays or failure, financial losses, contractual penalties, regulatory scrutiny and damage to our reputation.
In addition, evolving regulatory frameworks focused on operational resilience and incident reporting may increase our obligations and potential exposure arising from such events.
We may experience cybersecurity incidents, software defects, system errors, outages and development delays, which could damage customer relationships, decrease our profitability and expose us to liability.
Our business depends heavily on the reliability, availability and security of proprietary and third-party processing systems and cloud infrastructure.
Events that could cause system interruptions include, but are not limited to, fire, natural disaster, unauthorized entry, power loss, telecommunications failure, computer viruses, ransomware or other cybersecurity incidents, technology failures, software or other vulnerabilities, terrorist acts and war.
Although we have taken steps to protect against data loss and system failures, there is still risk that we may lose critical data or experience system failures, and that our controls may not be effective in all circumstances.
In addition, we rely on technologies supplied to us by third parties that may also contain undetected errors, vulnerabilities or defects that could adversely affect our business, financial condition or results of operations.
Although we attempt to limit our potential liability for warranty claims through disclaimers in our software documentation and limitation of liability provisions in our licenses and other agreements with our customers, we cannot assure that these measures will be successful in limiting our liability or covering all losses.
We also operate in an evolving regulatory environment for cybersecurity and data privacy.
New or expanded disclosure or notification obligations could increase our compliance costs and exposure to enforcement or litigation following an incident.
We may not be able to adequately protect our systems or the data we collect from continually evolving cybersecurity and data-protection risks, which could subject us to liability and damage our reputation.
We are not aware of any recent m aterial breach of our or our associated third parties’ computer systems, although we and others in our industry are regularly the subject of attempts by bad actors to gain unauthorized access to these computer systems and data or to obtain, change or destroy confidential data (including personal consumer information of individuals) through a variety of means.
Because techniques used to sabotage or obtain unauthorized access to our systems and the data we collect change frequently and may not be recognized until launched against a target, especially considering heightened threats and risks associated with artificial intelligence and other technologies, we may be unable to anticipate these techniques or to implement adequate preventative measures.
If we were ever found to be in violation, our business, financial condition, operating results and cash flows could be materially adversely affected.
Risks related to our business and operations If we fail to develop and implement new technology, products and services, adapt our products and services to changes in technology, or if our ongoing efforts to upgrade our technology, products and services are not successful, we could lose customers and partners.
We may be unsuccessful in expanding our technological capabilities and developing, marketing, selling or encouraging adoption of new or enhanced products and services that meet these changing demands, which could jeopardize our competitive position.
Similarly, if new technologies are developed that displace our offerings for use by businesses, we may be unsuccessful in adequately responding to customer practices and our transaction volume may decline.
In addition, we regularly engage in significant efforts to upgrade our products, services and underlying technology, which may or may not be successful in achieving market acceptance or their intended purposes, and may require more time or investment than planned.
Artificial intelligence technologies, including machine learning and generative AI, are being rapidly adopted across the payments and enterprise software industries to improve automation, analytics, fraud detection, customer support and decision- making.
Our competitors, customers and partners may increasingly expect AI-enabled functionality and efficiencies in the solutions they purchase and use.
If we do not identify, develop, license, acquire and integrate AI technologies into our products and operations on a timely basis, or if we are unable to obtain the data, computing resources or specialized personnel needed to do so cost-effectively, our products and services may become less competitive, we may experience slower growth, reduced transaction volumes, loss of customers or partners, and pressure on margins.
In addition, AI-enabled products offered by competitors or third parties could disintermediate aspects of our offerings or reduce demand for certain of our solutions.
New or enhanced offerings can present performance, scalability or interoperability challenges, and any failure to deliver effective and secure products or services, or any performance issue that arises with a new product or service, could result in significant processing or reporting errors, customer dissatisfaction or other losses.
We may rely on third parties to develop or co-develop solutions or to incorporate our solutions into broader platforms for commercial payments and adjacent use cases.
In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, mobile payment applications, e-commerce services and other new offerings emerging in the payments technology industry, including with respect to domestic and international corporate payments, and EVs.
Additionally, we may be unable to attract, develop and retain personnel with the skills necessary to execute our strategy in key locations and at the pace required.
Corporate Payments solutions face a variety of competitors, some of which have greater financial resources, name recognition and scope and breadth of products and services.
Moreover, certain Corporate Payments competitors are able to operationalize and scale certain decentralized payment technologies quicker like cryptocurrencies.
Competitors in the Lodging Payments solutions include travel agencies, online lodging discounters, internal corporate procurement and travel resources and independent lodging and services providers.
In addition, our larger competitors may have greater resources than we do to devote to the promotion and sale of their products and services and to pursue acquisitions.
Overall, increased competition and services in our markets could result in intensified pricing pressure, reduced profit margins, increased sales and marketing expenses and a failure to increase, or a loss of, market share.
Adverse effects on demand for our business-related products and services, from unfavorable macroeconomic conditions, weather conditions, natural catastrophes or public health crises or from changes to business purchasing practices, could adversely affect our financial condition and operating results.
Adverse macroeconomic conditions within the U.S. or internationally, including but not limited to recessions or economic downturns, inflation, rising or volatile interest rates, deteriorating credit conditions, labor shortages and disputes, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, terrorist attacks, prolonged or recurring government shutdowns, regional or domestic hostilities, and economic sanctions and export controls (including tariffs), as well as the prospect or occurrence of more widespread conflicts, rising energy prices, a slowdown of global trade, and reduced consumer, small business, government and corporate spending, have a direct impact on the demand for our business-related products, including fuel, lodging and payment services.
Climate change may exacerbate certain of these threats, including the frequency and severity of weather-related events and subsequent physical disruptions to supply chains.
Likewise, recent political, investor and industry focus on greenhouse gas emissions and climate change issues, as well as energy-transition dynamics and policies affecting fossil fuel demand, may adversely affect the volume of transactions or business operations of the oil companies, merchants and truck stop owners with whom we maintain strategic relationships, which could adversely impact our business.
In addition, our transaction volume mix could be adversely affected if businesses do not continue to use our offerings or they change and/or fail to increase their use of our offerings as a payment mechanism for their transactions.
We could also face liquidity constraints if we are unable to timely transfer or access funds, securities or collateral.

and 57 more.

Gone since FY2024

Our subsidiaries operate in various countries and country specific factors, such as power availability, telecommunications carrier redundancy, embargoes and regulation can adversely impact our information processing by, or for, our local subsidiaries.
However, there could be material delays in fully activating backup facilities depending on the nature of the breakdown, security breach or catastrophic event (such as fire, explosion, flood, pandemic, natural disaster, power loss, telecommunications failure or physical break-in).
We may experience software defects, system errors, computer viruses and development delays, which could damage customer relationships, decrease our profitability and expose us to liability.
Our business depends heavily on the reliability of proprietary and third-party processing systems.
Events that could cause system interruptions include, but are not limited to, fire, natural disaster, unauthorized entry, power loss, telecommunications failure, computer viruses, terrorist acts and war.
Although we have taken steps to protect against data loss and system failures, there is still risk that we may lose critical data or experience system failures.
In addition, we rely on technologies supplied to us by third parties that may also contain undetected errors, viruses or defects that could adversely affect our business, financial condition or results of operations.
Although we attempt to limit our potential liability for warranty claims through disclaimers in our software documentation and limitation of liability provisions in our licenses and other agreements with our customers, we cannot assure that these measures will be successful in limiting our liability.
We may not be able to adequately protect our systems or the data we collect from continually evolving cybersecurity risks or other technological risks, which could subject us to liability and damage our reputation.
Other than an unauthorized access incident during the second quarter of 2018, previously disclosed in 2018, we are not aware of any material breach of our or our associated third parties’ computer systems, although we and others in our industry are regularly the subject of attempts by bad actors to gain unauthorized access to these computer systems and data or to obtain, change or destroy confidential data (including personal consumer information of individuals) through a variety of means.
Because techniques used to sabotage or obtain unauthorized access to our systems and the data we collect change frequently and may not be recognized until launched against a target, especially considering heightened threats and risks associated with artificial intelligence, we may be unable to anticipate these techniques or to implement adequate preventative measures.
While we believe we are in compliance with the relevant laws and regulations, if we were ever found to be in violation, our business, financial condition, operating results and cash flows could be materially adversely affected.
If we fail to develop and implement new technology, products and services, adapt our products and services to changes in technology, or if our ongoing efforts to upgrade our technology, products and services are not successful, we could lose customers and partners.
We may be unsuccessful in expanding our technological capabilities and developing, marketing, selling or encouraging adoption of new products and services that meet these changing demands, which could jeopardize our competitive position.
Similarly, if new technologies are developed that displace our traditional payment card as payment mechanisms for purchase transactions by businesses, we may be unsuccessful in adequately responding to customer practices and our transaction volume may decline.
In addition, we regularly engage in significant efforts to upgrade our products, services and underlying technology, which may or may not be successful in achieving broad acceptance or their intended purposes.
Any failure to deliver an effective and secure product or service or any performance issue that arises with a new product or service could result in significant processing or reporting errors or other losses.
We may rely on third parties to develop or co-develop our solutions or to incorporate our solutions into broader platforms for the commercial payments industry.
In order to remain competitive, we are continually involved in a number of projects, including the development of new platforms, mobile payment applications, e-commerce services and other new offerings emerging in the payments technology industry, including with respect to EVs.
Risks related to our business and operations Adverse effects on payment card transaction volume and other aspects of our business and operations, from unfavorable macroeconomic conditions, weather conditions, natural catastrophes or public health crises or from changes to business purchasing practices, could adversely affect our financial condition and operating results.
Adverse macroeconomic conditions within the U.S. or internationally, including but not limited to recessions or economic downturns, inflation, rising interest rates, labor shortages and disputes, high unemployment, currency fluctuations, actual or anticipated large-scale defaults or failures, terrorist attacks, prolonged or recurring government shutdowns, regional or domestic hostilities, economic sanctions (including tariffs) and the prospect or occurrence or more widespread conflicts, rising energy prices, or a slowdown of global trade, and reduced consumer, small business, government and corporate spending, have a direct impact on the demand for fuel, business-related products and services, or payment card services in general.
A substantial portion of our revenue is based on the volume of payment card transactions by our customers.
Accordingly, our operating results could be adversely impacted by such events or trends that negatively impact the demand for fuel, business-related products and services, or payment card services in general.
For example, our transaction volume is generally correlated with general economic conditions and levels of spending, particularly in the U.S., Canada, the United Kingdom, Europe, Latin America, Australia and New Zealand and the related amount of business activity in economies in which we operate.
Downturns in these economies are generally characterized by reduced commercial activity and, consequently, reduced purchasing of fuel and other business-related products and services by our customers.
Likewise, recent political, investor and industry focus on greenhouse gas emissions and climate change issues may adversely affect the volume of transactions or business operations of the oil companies, merchants and truck stop owners with whom we maintain strategic relationships, which could adversely impact our business.
Further, we may not be able to successfully execute our EV strategy, which could further adversely impact our business.
In addition, our transaction volumes could be adversely affected if businesses do not continue to use, or fail to increase their use of, credit, debit, ACH, virtual cards or stored value cards as a payment mechanism for their transactions.
Similarly, our transaction volumes could be impacted by adverse developments in the payments industry, such as new legislation or regulation that makes it more difficult for customers to do business, or a well-publicized data security breach that undermines the confidence of the public in electronic payment systems.
Further, adverse macroeconomic conditions and resulting trends, weather conditions, natural catastrophes or public health crises, could affect other aspects of our business.
For example, because we derive a portion of our revenues from travel-related spending, our business is sensitive to safety concerns related to travel and, limitations on travel and mobility and health-related risks, and such adverse factors could impact the amount spent on lodging solutions or other business expenses.
Climate change may exacerbate certain of these threats, including the frequency and severity of weather-related events.
Such factors and conditions may also impact the proper functioning of financial and capital markets, which could have a negative impact on our ability to access capital in the future.
Our business may be adversely affected by geopol itical risks We have foreign operations in, or provide services for customers in more than 200 countries throughout North America, South America, Europe, Africa and Asia.
Extraordinary measures, such as sanctions and tariffs, will adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations or otherwise aggravate the other risk factors that we identify herein.
We cannot predict the scope of macroeconomic factors because these measures are complex and evolving.
To date, we have not experienced any material interruptions in our infrastructure, technology systems or networks needed to support our operations.
In addition, conducting and expanding our international operations subjects us to other political, economic, technological, operational and regulatory risks and difficulties that we do not generally face in the U.S.
Criminals are using increasingly sophisticated methods to engage in illegal activities involving financial products, such as skimming and counterfeiting payment cards and identity theft.
Revenues for late fees and finance charges represented approximately 4% of our consolidated revenue for the year ended December 31, 2024 .

and 57 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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