MoneyGram 2013 Annual Report Download - page 20

Table of Contents
Because our business is particularly dependent on the efficient and uninterrupted operation of our information technology, 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 services 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, computer virus, improper operation, improper action by our employees, agents, consumers, financial institutions or third party
vendors or any other event impacting our systems or processes or our agents' or vendors’
systems or processes, we could suffer financial loss,
loss of consumers, regulatory sanctions, lawsuits and damage to our reputation or consumers’
confidence in our business. 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. In addition, any work stoppages or other labor actions by
employees who support our systems or perform any of our major functions could adversely affect our business. 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 or engage other providers 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.
In addition, 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.
Continued weakness in economic conditions, in both the U.S. and global markets, could adversely affect our business, financial condition
and results of operations.
Our money transfer business relies in part on the overall strength of global economic conditions as well as international migration patterns.
Consumer money transfer transactions and international migration patterns are affected by, among other things, employment opportunities and
overall economic conditions. Our consumers tend to be employed in industries such as construction, manufacturing and retail that tend to be
cyclical and more significantly impacted by weak economic conditions than other industries. This may result in reduced job opportunities for our
customers in the U.S. or other countries that are important to our business, which could adversely affect our business, financial condition and
results of operations. In addition, increases in employment opportunities may lag other elements of any economic recovery.
Our agents or billers may have reduced sales or business as a result of weak economic conditions. As a result, our agents could reduce their
number of locations or hours of operation, or cease doing business altogether. Our billers may have fewer consumers making payments to them,
particularly billers in those industries that may be more affected by an economic downturn such as the automobile, mortgage and retail
industries.
If general market conditions in the U.S. or other national economies important to our business were to deteriorate, our business, financial
condition and results of operations could be adversely impacted. Additionally, if our consumer transactions decline or international migration
patterns shift due to deteriorating economic conditions, we may be unable to timely and effectively reduce our operating costs or take other
actions in response, which could adversely affect our business, financial condition and results of operations.
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