MoneyGram 2010 Annual Report Download - page 20

Table of Contents
We and our agents are considered Money Service Businesses in the United States under the Bank Secrecy Act. The federal banking
regulators are increasingly taking the stance that Money Service Businesses, as a class, are high risk. As a result, several financial
institutions, which look to the federal regulators for guidance, have terminated their banking relationships with some of our agents. If our
agents are unable to maintain existing or establish new banking relationships, they may not be able to continue to offer our services,
which could adversely affect our business, financial condition and results of operations.
We may be unable to operate our official check and money order businesses profitably if we are not successful in retaining those
partners that we wish to retain.
We have reduced the commission rate we pay to our official check financial institution customers, and have implemented, and in some
cases increased, per-item and other fees for our official check and money order services. Due to the historically low interest rate
environment, our official check financial institution customers have been receiving low or no commission payments from the issuance of
payment service instruments. Our official check financial institution customers have a right to terminate their agreements with us if they
do not accept these pricing changes. As a result of the pricing changes, historically low interest rate environment and contractual rights,
there can be no assurance that we will retain those official check financial institution customers and money order agents that we wish to
retain. If we are not successful in retaining those customers and agents that we wish to retain, and we are unable to proportionally reduce
our fixed costs associated with the official check and money order businesses, our business, financial condition and results of operations
could be adversely affected.
Failure to maintain sufficient capital could adversely affect our business, financial condition and results of operations.
If we do not have sufficient capital, we may not be able to pursue our growth strategy and fund key strategic initiatives, such as product
development and acquisitions. Further, we may not be able to meet new capital requirements introduced or required by our regulators.
Given the leveraged nature of the Company and the significant restrictive covenants in our debt agreements, there can be no assurance
that we will have access to sufficient capital. Failure to have such access could materially impact our business, financial condition and
results of operations.
Failure to attract and retain key employees could have a material adverse effect on our business, financial condition and results of
operations.
Our success depends to a large extent upon our ability to attract and retain key employees. The loss of services of one or more members
of our executive management team could harm our business and future development. A failure to attract and retain key personnel could
also have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we fail to successfully develop and timely introduce new and enhanced products and services or if we make substantial investments
in an unsuccessful new product, service or infrastructure change, our business, prospects, financial condition and results of
operations could be adversely affected.
Our future growth will depend, in part, on our ability to continue to develop and successfully introduce new and enhanced methods of
providing money transfer, money order, official check, bill payment and related services that keep pace with competitive introductions,
technological changes and the demands and preferences of our agents, financial institution customers and consumers. If alternative
payment mechanisms become widely substituted for our current products and services, and we do not develop and offer similar
alternative payment mechanisms successfully and on a timely basis, our business and prospects could be adversely affected. We may
make future investments or enter into strategic alliances to develop new technologies and services or to implement infrastructure change
to further our strategic objectives, strengthen our existing businesses and remain competitive. Such investments and strategic alliances,
however, are inherently risky and we cannot guarantee that such investments or strategic alliances will be successful. If such investments
and strategic alliances are not successful, they could have a material adverse effect on our business, financial condition and results of
operations.
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