Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 18

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 18
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 and to develop and introduce innovative offerings. 

The impact of technological changes is magnified by the intense competition we face. To succeed, our technology-based products and services must keep pace with technological advancements and evolving industry standards, address the ever-changing and increasingly sophisticated needs of our customers, and achieve market acceptance. Additionally, we must differentiate our product and service offerings from those of our competitors and from the in-house capabilities of our clients. Failure to develop products and services that adapt to changing demands in a timely manner may lead to the loss of existing customers and hinder our ability to attract new ones. Moreover, we must continue to develop our skills, tools, and capabilities to capitalize on existing and emerging technologies. This requires significant investment, takes considerable time, and ultimately, may not be successful. Any of these risks could harm our business, results of operations, and growth prospects.

The use of checks and business forms is declining, and we may be unable to offset this decline with profitable revenue growth.

Checks remain a significant portion of our business, accounting for 33.1% of our consolidated revenue in 2024, and they provide a significant amount of the cash flows we invest in our growth businesses. We sell checks for both personal and business use and believe that there will continue to be demand for these checks for the foreseeable future. However, the total number of checks written in the U.S. has been declining since the 1990s, and we expect this trend to continue due to the increasing digitization of payments. This includes debit cards, credit cards, direct deposits, wire transfers, and other payment methods utilized by brands such as PayPal®, Apple Pay®, Square®, Zelle®, and Venmo®, as well as cryptocurrencies. Further contributing to this shift is the RTP® network run by The Clearing House Payments Company, LLC and the U.S. Federal Reserve's real-time payments system, FedNow®. 

Reports of rising check fraud and the associated publicity may also contribute to a decline in check usage. As awareness of these fraudulent activities grows, both consumers and businesses may become more cautious and opt for alternative payment methods. This shift could further accelerate the move away from traditional checks toward digital and electronic payment solutions, which some may perceive as a safer alternative.

The rate and extent to which digital payments will replace checks, whether due to legislative developments, changing payment systems, personal preferences, or other factors, cannot be predicted with certainty. Increased use of alternative payment methods, or our inability to successfully offset the secular decline in checks with new check supply clients