The company faces risks from fluctuating interest rates and foreign currency exchange rates, particularly in Argentina. Potential losses from chargebacks, refunds, merchant defaults, and economic downturns are also noted. The non-renewal of the Wells Fargo Merchant Services alliance and the associated impairment charge represent a significant risk. Currency devaluation in certain countries and volatility in financial markets pose further risks. Compliance with debt covenants and potential litigation are also mentioned as risks.
Financial Upside
Increased revenue from processing and product sales, driven by higher transaction volumes and client growth, is highlighted. Operating leverage and productivity improvements are expected to enhance profitability. The company's share repurchase program and acquisitions (Skytef, Sled, and European Merchant Services B.V.) are potential sources of future value. The sale of the financial reconciliation business generated a significant pre-tax gain in the prior period.
