MoneyGram 2010 Annual Report Download - page 24

Table of Contents
Because our business is particularly dependent on the efficient and uninterrupted operation of our computer network systems and
data centers, disruptions to these systems and data centers could adversely affect our business, financial condition and results of
operations.
Our ability to provide reliable service largely depends on the efficient and uninterrupted operation of our computer network systems and
data centers. Our business involves the movement of large sums of money and the management of data necessary to do so. The success of
our business particularly depends upon the efficient and error-free handling of transactions and data. We rely on the ability of our
employees and our internal systems and processes to process these transactions in an efficient, uninterrupted and error-free manner.
In the event of a breakdown, catastrophic event (such as fire, natural disaster, power loss, telecommunications failure or physical break-
in), security breach, improper operation, improper action by our employees, agents, customer financial institutions or third party vendors
or any other event impacting our systems or processes or our vendors' systems or processes, we could suffer financial loss, loss of
customers, regulatory sanctions and damage to our reputation. The measures we have enacted, such as the implementation of disaster
recovery plans and redundant computer systems, may not be successful. We may also experience problems other than system failures,
including software defects, development delays and installation difficulties, which would harm our business and reputation and expose us
to potential liability and increased operating expenses. Certain of our agent contracts, including our contract with Walmart, contain
service level standards pertaining to the operation of our system, and give the agent a right to collect damages and in extreme situations a
right of termination for system downtime exceeding agreed upon service levels. If we experience significant system interruptions or
system failures, our business interruption insurance may not be adequate to compensate us for all losses or damages that we may incur.
If we are unable to effectively operate and scale our technology to match our business growth, our business, financial condition and
results of operations could be adversely affected.
Our ability to continue to provide our services to a growing number of agents and consumers, as well as to enhance our existing services
and offer new services, is dependent on our information technology systems. If we are unable to effectively manage the technology
associated with our business, we could experience increased costs, reductions in system availability and loss of agents or consumers. Any
failure of our systems in scalability, reliability and functionality could adversely impact our business, financial condition and results of
operations.
The operation of retail locations and acquisition or start-up of businesses create risks and may adversely affect our operating results.
We operate Company-owned retail locations for the sale of our products and services. We may be subject to additional laws and
regulations that are triggered by our ownership of retail locations and our employment of individuals who staff our retail locations. There
are also certain risks inherent in operating any retail location, including theft, personal injury and property damage and long-term lease
obligations.
We may, from time to time, acquire or start up businesses both inside and outside of the United States. The acquisition and integration of
businesses involve a number of risks. We may not be able to successfully integrate businesses that we acquire or open, including their
facilities, personnel, financial systems, distribution, operations and general operating procedures. If we fail to successfully integrate
acquisitions, we could experience increased costs and other operating inefficiencies, which could have an adverse effect on our results of
operations. The diversion of capital and management's attention from our core business that results from acquiring or opening new
businesses could adversely affect our business, financial condition and results of operations.
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