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• Like PayPal or Stripe, but with a significant focus on prepaid cards and government disbursements.
• A smaller, more niche-focused Fiserv or Global Payments.
• Green Dot for prepaid cards, combined with a wider range of payment processing for businesses.

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• Payment Processing: Provides comprehensive solutions for businesses to accept and process electronic payments, including credit/debit cards, ACH, and real-time payments.
• Card Issuing & Program Management: Offers customizable prepaid card programs, virtual cards, and related services for disbursements, incentives, and other payment solutions.
• Payment Facilitation (PayFac) Platform: Enables software companies and marketplaces to embed payment processing directly into their platforms and manage sub-merchants efficiently.
• Electronic Bill Presentment and Payment (EBPP): Delivers solutions for businesses to present bills electronically and collect payments digitally, streamlining the billing cycle.

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Usio, Inc. (symbol: USIO) primarily sells its payment solutions and services to other companies and organizations, making it a Business-to-Business (B2B) oriented company.

Based on Usio's annual report (Form 10-K) filed with the SEC, the company does not have any single customer that accounts for 10% or more of its total revenues. This indicates a diversified customer base rather than reliance on a few large clients. While specific named major customers are not disclosed due to this diversification, Usio serves a range of entities that can be categorized as its primary customer segments:

• Independent Software Vendors (ISVs) and SaaS Providers: Usio partners with these companies to embed its payment processing and financial technology solutions directly into their platforms. This allows ISVs to offer integrated payment capabilities and value-added services to their own business customers.
• Government Agencies: Usio provides solutions for electronic disbursements, particularly for benefit programs and social services, leveraging prepaid card solutions. They also support electronic bill presentment and payment for various government entities.
• Financial Institutions: Banks and credit unions leverage Usio's payment processing infrastructure and prepaid card solutions, either for their internal operations or to offer enhanced payment services to their business clients.
• Businesses and Non-Profit Organizations: Usio offers direct payment processing services (credit card, ACH, real-time payments), prepaid card programs (for payroll, incentives, expense management), and electronic bill presentment and payment solutions to a wide array of businesses and non-profit organizations across various industries.

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• Visa Inc. (V)
• Mastercard Incorporated (MA)

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Louis Hoch, Founder, Chairman and CEO

Mr. Hoch has over 30 years of management experience, with 25 years at a senior executive level serving public companies, and is an expert in payment processing and service bureau operations. He is a co-founder of Usio, Inc. Previously, Mr. Hoch co-founded Billserv, Inc., an industry leader in Electronic Bill Presentment and Payment, where he served as President and COO. Billserv, Inc. achieved a peak market capitalization of over $500 million on the NASDAQ National Market Exchange and is now owned by American Express. His background includes founding multiple successful companies and leading them to significant market positions, and he has held key management positions at U.S. Long Distance, Billing Concepts, and Andersen Consulting. Mr. Hoch holds a U.S. Patent for a system and method for managing and processing stored-value cards and bill payment.

Michael White, Senior Vice President, Chief Accounting Officer

Mr. White has served as Usio's Senior Vice President, Chief Accounting Officer, and principal accounting and financial officer since January 2024. He joined Usio in September 2020 and held roles as an accounting analyst, Assistant Controller, and Vice President, Controller before his current appointment. Prior to Usio, from May 2016 to September 2020, Mr. White was an Accounting Associate with EPIcenter, an energy startup.

Greg Carter, EVP, Payment Acceptance & Chief Revenue Officer

Mr. Carter has extensive senior management experience across the telecommunications, billing and settlement, and retail sectors. He previously served as the Chief Executive Officer for BSG Clearing Solutions, a publicly-held settlement and clearing house with revenues exceeding $145 million. His career also includes senior-level sales and marketing positions at MCI/Telecom*USA, US Long Distance, Qwest, and nii Communications. Mr. Carter is a veteran of the United States Marine Corps.

Houston Frost, Chief Product Officer

Mr. Frost joined Usio in December 2014 and is responsible for developing the company's product roadmap and driving innovation. Before joining Usio, he co-founded Akimbo Financial, Inc. in January 2010, where he served as President, CEO, and Director, a company later acquired by Usio, Inc. on December 22, 2014. Mr. Frost has over 10 years of experience in the card issuing and fintech payments industry and eight years in financial services, including a role as an Associate at JPMorgan Chase & Co. on the Fixed-Income Strategy team. He has also served as a Director of TransPecos Banks, SSB since 2017.

Ken Keller, Senior Vice President, Chief Technology Officer

As Chief Technology Officer, Mr. Keller is responsible for Usio's architectural and product strategies for its merchant processing and bill payment businesses. He brings over 20 years of experience in developing and delivering specialized high-volume transaction-based systems. Prior to joining Usio in 2003, Mr. Keller held key leadership and executive technical roles at Billserv, Inc. He also consulted in the telecommunications industry for companies such as US Long Distance, LCI International, Qwest Communications, and Broadwing, specializing in enterprise-wide database development and implementation.

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The key risks to Usio's business operations are primarily centered around cybersecurity, regulatory compliance and maintaining crucial partnerships, and intense market competition coupled with broader economic pressures.

1. Cybersecurity Threats: Usio faces significant risks related to the security of its software, hardware, and information. These threats encompass operational risks, intellectual property theft, fraud, extortion, potential harm to customers, and violations of data privacy or security laws. A breach of their security applications or inadequate measures to address evolving cyber threats could lead to substantial losses and impair their ability to offer services.
2. Regulatory Compliance and Key Partner Relationships: The company operates within a complex regulatory landscape and must comply with numerous federal, state, and local laws and regulations. Failure to adhere to these can result in fines and legal challenges. Furthermore, Usio's business heavily relies on its relationships with the Automated Clearinghouse (ACH) network, bank sponsors, and third-party card processing providers and merchants. The loss of these key relationships could severely impact its ability to process payments and generate revenue.
3. Competitive Market and Economic Pressures: The payment processing industry is highly competitive, with many small and large companies vying for market share. This competitive environment, combined with risks related to the overall economy and challenges in managing company growth, can affect Usio's financial performance. Signs of this include a challenging market environment impacting stock value and modest revenue growth due to declining gross margins.

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The increasing dominance and aggressive expansion of larger, integrated payment processing platforms and fintech companies (e.g., Stripe, Adyen, Block's Square, PayPal/Braintree) pose a clear emerging threat. These companies consistently invest in cutting-edge technology, offer comprehensive ecosystems of services, provide superior developer experiences (robust APIs, extensive documentation), and aggressively target all segments of the market, including small and medium-sized businesses, enterprises, and integrated software vendors (ISVs). This intensifies pricing pressure, raises the bar for innovation, and threatens Usio's market share in its core merchant services, payment facilitation (PayFac), and integrated payment solution segments by offering more advanced, easier-to-integrate, and potentially more cost-effective alternatives.

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Usio (USIO) operates in several key markets related to electronic payment solutions. The addressable markets for its main products and services are primarily within the United States, with some global market data available for Electronic Bill Presentment and Payment (EBPP).

• ACH Processing (Automated Clearing House): The addressable market for ACH processing in the U.S. is estimated to be $300 billion.
• Credit and Debit Card Processing (part of Payment Processing Solutions): The U.S. payment processing solutions market generated a revenue of USD 16,000.3 million in 2023 and is projected to reach USD 36,752.5 million by 2030, growing at a Compound Annual Growth Rate (CAGR) of 12.6% from 2024 to 2030. Credit card processing constituted the largest segment within this market in 2023.
• Electronic Bill Presentment and Payment (EBPP):
  • Global Market: The global Electronic Bill Presentment and Payment market was valued at USD 25.3 billion in 2023 and is expected to grow to USD 61.14 billion by 2032, at a CAGR of 10.3% during the forecast period (2025-2032). Other estimates place the global EBPP market at USD 27.4 billion in 2024, projected to reach USD 69.1 billion by 2033 with a CAGR of 10.7%.
  • U.S. Market: The United States Electronic Bill Presentment Payment market size was valued at USD 7.2 billion in 2023 and is expected to reach USD 19.6 billion by 2033, growing at a CAGR of 10.5% from 2023 to 2033. North America holds the largest share of the global EBPP market, accounting for approximately USD 10.2 billion in 2024.

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• Expansion of the High-Margin ACH Business: Usio has consistently highlighted its ACH (Automated Clearing House) business as a strong growth area and its most profitable segment. The company's strategic focus on expanding its ACH offerings and enhancing margins across these services has led to notable growth in electronic check volumes. This segment has shown robust revenue growth, with electronic check transaction volume and dollars processed increasing significantly. The continued expansion and improvement in the ACH segment are expected to positively impact operational profitability as volumes rise.
• Growth in Payment Facilitation (PayFac) and Independent Software Vendor (ISV) Onboarding: The PayFac segment is a significant driver of growth for Usio, with a strong emphasis on onboarding new ISVs. The company has reported a growing number of ISVs in various stages of implementation, including a large enterprise merchant with substantial annual processing volume potential. This focus on expanding the PayFac portfolio and successful ISV onboarding is anticipated to contribute significantly to future revenue.
• Strategic Initiatives and Adoption of New Payment Technologies: Usio is leveraging strategic initiatives, such as the "Usio ONE" program, and investing in innovative payment technologies to support long-term growth. The company is actively pursuing real-time payment initiatives, including the adoption of services like FedNow. These efforts represent an expansion of services and an embrace of new technological capabilities expected to attract new customers and increase transaction volumes.
• Increased Capacity and Efficiency in Output Solutions: Usio's Output Solutions business unit is poised for renewed growth due to recent investments in new technology to expand its production capacity by approximately 50%. This expansion, coupled with a shift towards digital solutions, is expected to improve sales and margins within this segment, contributing to overall revenue growth.

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Share Repurchases

• Usio's Board of Directors authorized a share repurchase program of up to $4 million of common stock in May 2022, set to expire on May 15, 2025.
• This program was extended in March 2025 to May 15, 2028, maintaining the $4 million total purchase limit.
• Usio repurchased approximately $1.5 million in stock during 2024, nearly exhausting the original $4 million authorization from May 2022.

Share Issuance

• As part of the acquisition of Information Management Solutions (IMS) in December 2020, Usio issued warrants to IMS shareholders. These warrants have a strike price of $4.23 and vest in three annual installments of 315,200 each, potentially leading to the issuance of 945,600 shares upon exercise.

Inbound Investments

• Usio raised $1 million in a Post IPO funding round on November 23, 2021, with participation from investors including Topline Capital and Voyager.

Outbound Investments

• On December 15, 2020, Usio acquired the assets of Information Management Solutions (IMS) for a combination of $5.9 million in cash and warrants. This acquisition was intended to accelerate revenue growth and re-enter the electronic bill payment and presentment industry.

Capital Expenditures

• Usio's capital expenditures were approximately $1.27 million in 2020, $0.81 million in 2021, $0.83 million in 2022, $0.99 million in 2023, and $0.61 million in 2024.
• Expected capital expenditures are projected to be $1 million for 2025 and $2 million annually from 2026 to 2029.