Risk Factors

The Company’s ability to remain competitive depends, in part, on its ability to modernize its information technology in a timely and effective manner.

The means of payment market evolves rapidly in an attempt to keep up with the changing expectations of recipient end users (merchants) and paying end users (holders of payment instruments), as well as technological advances. The Company’s ability to remain competitive depends, in part, on its ability to meet demands for technological solutions in a timely and effective manner. New payment method trends are emerging in association with new technologies, for example, use of mobile telephony features, use of payment cards tokens, capture by QR Code, social commerce (e-commerce through social networks), authentication, virtual currencies and blockchain technologies, near-field communication (NFC) and other near field or contactless payment methods, virtual reality, machine learning, and artificial intelligence methods, among others. In the event the Company experiences difficulty in perceiving market demands or is unable to build strategic partnerships to adequately meet its needs and its market vision, its business may be adversely affected.

Furthermore, the Company cannot guarantee that in the future it will be able to maintain the level of capital investment required to stimulate and/ or continue to modernize its information technology infrastructure, and in this case its ability to meet market demands would be impaired. The lack of investments or insufficient investments may affect its ability to process and store data, thus preventing the origination of new business and customers and maintenance of existing customers. The Company may even be unable to guarantee information security both for itself and its customers, and this may have a material adverse effect on its business, financial condition or results of operation.

The Company processes and stores a large number of payment transactions. Accordingly, the Company’s business depends on its ability to process and maintain this data efficiently and accurately, and on its ability to rely on digital technologies, computer, email, software and network services as well as securely storing and transmitting confidential information and other types of data over its systems and computer networks.

Any failure in the operation of capture and data processing, financial control or accounting systems may adversely affect the Company’s business and its ability to compete effectively, as well as resulting in financial loss, legal liability, regulatory action and damage to reputation, leading to a material adverse effect on its business, financial condition or results of operations.

The Company is also subject to the risk of temporary interruption to its automated systems due to a number of causes, including events beyond its control. These possible events include: electrical or telecommunications failures, breakdowns in supply systems, failures in automated systems or other events, as well as atypical events related to social or political problems or natural disasters. Circumstances such as those stated above may result in additional costs, the stoppage of operations and loss of revenue and may have a material adverse effect on its business, financial condition and results of operations.

The Company is also subject to the risk of temporary interruption to its automated systems due to a number of causes including events beyond the Company’s control, for example: electrical or telecommunications failures, breakdown in supply systems, failures in automated systems or other events affecting third parties with which business is conducted. Circumstances such as those stated above may result in additional costs, the stoppage of operations and loss of revenue and may have a material adverse effect on its business, financial condition and results of operations.

The Company’s ability to put its new business strategies into practice depends on a number of factors such as (i) national economic conditions and policies (ii) maintenance of existing laws and regulations, particularly those related to the means of payment industry, (iii) maintenance of operating costs, (iv) development of technological infrastructure, (v) increase in operating efficiency, (vi) creation of new products, among other factors. The Company cannot guarantee it will succeed in implementing its new strategies in view of the changes in the circumstances stated above, which may have a material adverse effect on its financial condition and results of operations.

The Company may invest in strategic partnerships or supplementary businesses. The success of such activities depends, in part, on its ability to make adequate forecasts regarding assessment, operation, growth potential, integration and other factors related to these businesses. There is no guarantee that new partnerships or investments will produce the expected results.

Moreover, opting for growth projects may involve waiving other competing business opportunities. The Company may also not be able to conclude the partnerships planned due to problems involving system integration, operating procedures or breach of contract. Under these circumstances, the Company’s business may be adversely impacted.