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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Operating Leases In 2016, the Company entered into a lease agreement for its corporate headquarters in Oakland, California for 19,000 square feet of office space, which was subsequently amended resulting in a total of 63,000 square feet of office space being leased. The non-cancellable operating lease expires in February 2026 and includes options to extend the lease term, generally at the then-market rates. The Company excludes extension options that are not reasonably certain to be exercised from its lease terms. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses that exceed the amount of base operating expenses as defined in the original lease agreement. The Company's operating lease costs are as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Operating lease cost | $ | 843 |  |  | $ | 877 |  |  | $ | 2,581 |  |  | $ | 2,645 |
Variable lease cost | 65 |  |  | 112 |  |  | 135 |  |  | 336 |
Short-term lease cost | 237 |  |  | 71 |  |  | 368 |  |  | 206 |
Total lease cost | $ | 1,145 |  |  | $ | 1,060 |  |  | $ | 3,084 |  |  | $ | 3,187 |
The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. The weighted average remaining operating lease term and the weighted average discount rate used in the calculation of the Company's lease assets and lease liabilities were as follows:
| September 30, 2021 |  | December 31, 2020
Weighted average remaining operating lease term (in years) | 4.3 |  | 5.1
Weighted average discount rate | 7.7% |  | 7.7%
Maturities of operating lease liabilities by year are as follows as of September 30, 2021:
Remainder of 2021 | $ | 1,012
2022 | 4,112
2023 | 4,239
2024 | 4,472
2025 | 4,599
Thereafter | 780
Total lease payments | 19,214
Less imputed interest | (3,061)
Total operating lease liabilities | $ | 16,153
Supplemental cash flow information related to the Company's operating leases was as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Cash paid for operating lease liabilities | $ | 1,007 |  |  | $ | 900 |  |  | $ | 3,072 |  |  | $ | 2,699 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 192 |
Letters of Credit In connection with the lease for its corporate headquarters office space, the Company is required to provide the landlord a letter of credit in the amount of $1.5 million. The Company has secured this letter of credit by depositing $1.5 million with the issuing financial institution, which deposit is classified as restricted cash in the condensed consolidated balance sheets. Purchase Obligations As of September 30, 2021, the Company had non-cancellable purchase commitments with certain service providers and Issuing Banks of $9.1 million, payable over the next 5 years. These purchase obligations generally represent minimum commitments for cloud-computing services and issuing bank processing fees over the fixed, non-cancellable respective contract terms. Defined Contribution Plans The Company maintains defined contribution plans for eligible employees, including a 401(k) plan that covers substantially all of its U.S. based employees and to which the Company provides a matching contribution of 50% of the first 6% of compensation that an employee contributes. The matching contribution vests after one year of service. During the three months ended September 30, 2021 and 2020, the Company contributed a total of $0.8 million and $0.5 million to its defined contribution plans, respectively. During the nine months ended September 30, 2021 and 2020, the Company contributed a total of $2.2 million and $1.4 million to its defined contribution plans, respectively. Legal Contingencies From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. As of September 30, 2021 and December 31, 2020, there were no legal contingency matters, either individually or in aggregate, that would have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Given the unpredictable nature of legal proceedings, the Company bases its assessment on the information available at the time. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate. Settlement of Payment Transactions Generally, Customers deposit a certain amount of pre-funding into accounts maintained at Issuing Banks to settle their payment transactions. Such pre-funding amounts may only be used to settle Customers’ payment transactions and are not considered assets of the Company. As such, the funds held in Customers’ accounts at Issuing Banks are not reflected on the Company’s condensed consolidated balance sheets. If a Customer does not have sufficient funds to settle a transaction, the Company is liable to the Issuing Bank to settle the transaction and would therefore incur losses if such amounts cannot be subsequently recovered from the Customer. Indemnifications In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on its condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, or condensed consolidated statements of cash flows. The Company also includes service level commitments to its Customers warranting certain levels of performance and permitting those Customers to receive credits in the event the Company fails to meet those levels. Non-income Taxes The Company is subject to state and local indirect taxes in various jurisdictions in the United States. In several of these jurisdictions the Company has reviewed and concluded that such indirect taxes are not applicable to the Company’s service offerings. In a few of these jurisdictions the tax regulations are less clear. While the Company believes its service offerings are not subject to tax in these jurisdictions, the Company is working with the respective state and local tax authorities to confirm the Company’s conclusions. The Company has not recorded a liability associated with these matters as of September 30, 2021 as it believes it is not probable that the indirect taxes are applicable to the Company. In the event that adverse information is received in response to the Company's state inquiries, and the Company chooses not to appeal, a potential tax liability would be $6.0 million as of September 30, 2021.
Commitments and Contingencies | Commitments and Contingencies Operating Leases In 2016, the Company entered into a lease agreement for its corporate headquarters in Oakland, California for 19,000 square feet of office space, which was subsequently amended resulting in a total of 63,000 square feet of office space being leased. The non-cancellable operating lease expires in February 2026 and includes options to extend the lease term, generally at the then-market rates. The Company excludes extension options that are not reasonably certain to be exercised from its lease terms. The Company’s lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses that exceed the amount of base operating expenses as defined in the original lease agreement. The Company's operating lease costs are as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Operating lease cost | $ | 843 |  |  | $ | 877 |  |  | $ | 2,581 |  |  | $ | 2,645 |
Variable lease cost | 65 |  |  | 112 |  |  | 135 |  |  | 336 |
Short-term lease cost | 237 |  |  | 71 |  |  | 368 |  |  | 206 |
Total lease cost | $ | 1,145 |  |  | $ | 1,060 |  |  | $ | 3,084 |  |  | $ | 3,187 |
The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. The weighted average remaining operating lease term and the weighted average discount rate used in the calculation of the Company's lease assets and lease liabilities were as follows:
| September 30, 2021 |  | December 31, 2020
Weighted average remaining operating lease term (in years) | 4.3 |  | 5.1
Weighted average discount rate | 7.7% |  | 7.7%
Maturities of operating lease liabilities by year are as follows as of September 30, 2021:
Remainder of 2021 | $ | 1,012
2022 | 4,112
2023 | 4,239
2024 | 4,472
2025 | 4,599
Thereafter | 780
Total lease payments | 19,214
Less imputed interest | (3,061)
Total operating lease liabilities | $ | 16,153
Supplemental cash flow information related to the Company's operating leases was as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Cash paid for operating lease liabilities | $ | 1,007 |  |  | $ | 900 |  |  | $ | 3,072 |  |  | $ | 2,699 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 192 |
Letters of Credit In connection with the lease for its corporate headquarters office space, the Company is required to provide the landlord a letter of credit in the amount of $1.5 million. The Company has secured this letter of credit by depositing $1.5 million with the issuing financial institution, which deposit is classified as restricted cash in the condensed consolidated balance sheets. Purchase Obligations As of September 30, 2021, the Company had non-cancellable purchase commitments with certain service providers and Issuing Banks of $9.1 million, payable over the next 5 years. These purchase obligations generally represent minimum commitments for cloud-computing services and issuing bank processing fees over the fixed, non-cancellable respective contract terms. Defined Contribution Plans The Company maintains defined contribution plans for eligible employees, including a 401(k) plan that covers substantially all of its U.S. based employees and to which the Company provides a matching contribution of 50% of the first 6% of compensation that an employee contributes. The matching contribution vests after one year of service. During the three months ended September 30, 2021 and 2020, the Company contributed a total of $0.8 million and $0.5 million to its defined contribution plans, respectively. During the nine months ended September 30, 2021 and 2020, the Company contributed a total of $2.2 million and $1.4 million to its defined contribution plans, respectively. Legal Contingencies From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. As of September 30, 2021 and December 31, 2020, there were no legal contingency matters, either individually or in aggregate, that would have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Given the unpredictable nature of legal proceedings, the Company bases its assessment on the information available at the time. As additional information becomes available, the Company reassesses the potential liability and may revise the estimate. Settlement of Payment Transactions Generally, Customers deposit a certain amount of pre-funding into accounts maintained at Issuing Banks to settle their payment transactions. Such pre-funding amounts may only be used to settle Customers’ payment transactions and are not considered assets of the Company. As such, the funds held in Customers’ accounts at Issuing Banks are not reflected on the Company’s condensed consolidated balance sheets. If a Customer does not have sufficient funds to settle a transaction, the Company is liable to the Issuing Bank to settle the transaction and would therefore incur losses if such amounts cannot be subsequently recovered from the Customer. Indemnifications In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on its condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, or condensed consolidated statements of cash flows. The Company also includes service level commitments to its Customers warranting certain levels of performance and permitting those Customers to receive credits in the event the Company fails to meet those levels. Non-income Taxes The Company is subject to state and local indirect taxes in various jurisdictions in the United States. In several of these jurisdictions the Company has reviewed and concluded that such indirect taxes are not applicable to the Company’s service offerings. In a few of these jurisdictions the tax regulations are less clear. While the Company believes its service offerings are not subject to tax in these jurisdictions, the Company is working with the respective state and local tax authorities to confirm the Company’s conclusions. The Company has not recorded a liability associated with these matters as of September 30, 2021 as it believes it is not probable that the indirect taxes are applicable to the Company. In the event that adverse information is received in response to the Company's state inquiries, and the Company chooses not to appeal, a potential tax liability would be $6.0 million as of September 30, 2021.

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