Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 29

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 29
---
 of each organization in certain regions. If our sponsoring financial institution in any market ceases to provide sponsorship, we would need to secure another financial institution to fulfill this role or obtain direct membership with the card networks. Both alternatives could be challenging and costly. Failure to secure a new sponsor or achieve direct membership could prevent us from offering processing services to affected customers, thereby adversely impacting our business and results of operations. Additionally, some agreements with our financial institution sponsors grant them substantial discretion over certain business practices, including our merchant solicitation, application, and qualification procedures, as well as the terms of our merchant agreements. The discretionary actions of our sponsors under these agreements could materially and adversely affect our business and results of operations.

Non-compliance with the card networks' requirements could result in fines, suspension, or termination of our registrations or membership. Such terminations would have a material negative impact on our business, financial condition, and results of operations. Furthermore, if a merchant or an independent sales organization (ISO) fails to adhere to the card associations' and networks' requirements, we or the merchant or the ISO could face various fines or penalties imposed by the card associations or networks. If we are unable to collect these amounts from the respective merchant or ISO, we may have to absorb the cost of these fines or penalties, which would negatively affect our results of operations.

18

LEGAL AND COMPLIANCE RISKS

Governmental regulation is continuously evolving and could limit or harm our business.

We are governed by a wide array of international, federal, state, and local laws and regulations that influence various aspects of our business operations. These areas include, but are not limited to, labor, advertising, taxation, data privacy and security, digital content, consumer reports, consumer protection, merchant processing, online payment services, real estate, e-commerce, intellectual property, healthcare, environmental issues, and workplace health and safety. Additionally, emerging legal or regulatory actions aimed at addressing climate change may soon impact our operations. Navigating the complexities of both existing and new regulations is challenging, and regulatory bodies may introduce new laws or regulations at any time.

The regulatory landscape in which we operate could impose significant constraints on our business activities, necessitate operational changes, limit our use or storage of personal information, or alter our customers' purchasing behaviors. These factors could increase our costs, reduce efficiency, and compel us to modify our current or future products, services, systems, or processes. The impact of such regulatory changes on our business, prospects, financial condition, or results of operations