IR Introduction- Business Overview & Business Model Q2 FY2022

May 13, 2022

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

1

Business
Overview

p.3

2

Focus Areas

p.16

3

Reference
Materials

p.33

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

2

1.1

Our Track Record of Growth

The results of management policy focused on sustainable growth（Mil Yen）+25.0%

16,00014,00012,987

14,00012,00012,00010,000J-GAAP

IFRS
※3,4

IFRS
※3

J-GAAP

21/9

22/9E

20/9

19/9

18/9

17/9

21/9

22/9E

20/9

21/9

22/9E

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

10/9

09/9

J-GAAP

19/9

0

18/9

0

0

17/9

2,000

16/9

2,000

15/9

4,000

14/9

4,000

13/9

6,000

12/9

6,000

11/9

8,000

10/9

10,00010,000

8,000

09/9

20,00014,88916/930,00018,399+23.6%

15/9

40,00016,00014/9

41,667

16,234 18,000

13/9+20.0％※1,2

EBITDA

12/9

50,000Operating Profit

50,000 18,000

11/9

Revenue（Mil Yen）
20,000

※1

10/9

※1

09/9

（Mil Yen）

IFRS※3

Operating stores

Annual TRX volume

Annual TRX value

134,0964.15 billion¥9.5 trillion（※1）Macro Kiosk has been deconsolidated in FY ending September 2020, the revenue figures above present the continuing operations only and exclude the discontinued operations.
（※2）EBITDA under J-GAAP is calculated as the sum total of operating profit, depreciation and amortization; and EBITDA under IFRS is calculated as the sum total of operating profit
and depreciation.
（※3）Operating stores present the figures for GMO-PG and GMO-EP; transaction volume and value present figures for GMO-PG, GMO-EP, GMO-PS, GMO-FG; of this, online payment
present figures for GMO-PG, GMO-EP and GMO-PS.
The number of operating stores is at the end of March 2022. Annual transaction volume and transaction value are the figures from April 2021 to March 2022.
Annual transaction volume and transaction value include the figures of GMO Financial Gate Inc.
（※4）The standards for calculation the number of operating stores has been revised from Q2 FY2022. Figures exclude a specific case and the operating store related to a majordelivery service operator. If included, the number of operating stores is 397,670 stores as of end of March 2022 (up 59.9% YoY).

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

3

1.2 Consolidated management
Realize Group-wide stable growth through sound business
operation that agilely responds to the businessenvironments at the major Group companies.
Omni-channel Strategy

Expand payment
method offerings
Share customer base

Diverse customer
coverage

Sharing of management principles, corporate culture andgroup-wide resource allocation
GMO-PG

GMO-EP

GMO-FG

GMO-PS

Major
business

Online payment
processing business

Online payment
processing business

Offline payment
processing business

BNPL business

Customer

Municipalities, large
to mid-sizedcorporates(non-merchandise,and merchandise)

Small operators(mainlymerchandise)

Offline stores,
Unattended
machines

Merchandise/Nonmerchandise
operators,
consumers

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

4

1.3

Three Business Segments

Sustain an over 25% OP growth from the expansion of mainstay
payment processing business and its peripheral businesses
Payment Enhancement
Business

Revenue
Breakdown

Operating Profit
Breakdown

2%

1%

Online Advertising Service
SSL Service
Delivery Service
Medical Kakumei byGMO etc.

2％

（Actual data for Q2 FY2022)

14%

23％

75％

85%
Payment Processing
Business

Money Service Business (MSB)
GMO Payment After Delivery/
GMO B2B Pay On Credit
Remittance Service/
Instant Salary byGMO※2
Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending

Online Payment ※1
Offline Payment
Ginko Pay/Processing
System Development

etc.

etc.

※1 Online payment includes pay-as-you-go and recurring payment and Z.com Payment (overseas payment service).
※2 Instant Salary byGMO commenced service on on July 7, 2021.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

5

1.4 Our Business Eco-system
An expanding eco-system of our value-added services
complementing our main business to achieve mutual growth
Increase inpayment processing

Payment processing(Gross margin 85％)

Payment
Processing
Business

Money Service
Business
Payment
Enhancement
Business

Customer growth
Main Business

Value-added business that contributeto growth of the main business

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

6

1.5

Revenue Trend by Segment

3 segments of Payment Processing Business, Money Service Business
and, Payment Enhancement Business（Mil Yen)J-GAAP

50,00045,000IFRS

Payment
Enhancement
Business
Money Service
Business

40,00035,00030,00025,000

Payment
Processing
Business

20,00015,00010,000

5,000
0
04/9
05/9
TSE
Listing

06/9

07/9

08/9
09/9
2008
Launched
Early
Payment
Service

10/9
11/9
12/9
13/9
14/9
15/9
16/9
17/9
18/9
19/9
20/9
21/9 22/2E
2016
2013
2011
2014
2015
2021
2010
2020
2018
BuffortLaunched Launched Launched Launched Revamped Launched
Deconsolid
Consolidation
services※
Payment TransactionEarly
OnlineOfflinetargeting banks of GMO MRT※ ation of MK becomes a
Lending
Payment
subsidiary
Payment Advertising After
GMO-FG/MK
DeliveryService
Servicebecomesubsidiaries※There was only one segment of Payment Processing Business until September 2015; segment information disclosure began from FY ending September 2016.
GMO-FG stands for GMO Financial Gate. GMO-MRT stands for GMO Medical Reservations Technology, MK stands for MACROKIOSK.
※ Due to the deconsolidation of MACROKIOSK from FY2020, its business has been reclassified as a discontinued operations and is excluded from the revenue figures shown above.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

7

1.6 Our value proposition
Businesses and services to comprehensively caters tocustomer’s needs
Issues & Needs

Value Proposition

Payment
Processing
Business

・Cumbersome implementation work
・Time consuming payment admin work,
Merchant
less time for main business・Concerns over system troubles

・Package of diverse payment methods
with centralized management
・Cut cost and payment/invoicing work
・Advanced system and customer support

・Limited number of payment methods

・Broad range of payment methods offered・Concerns over payment security

・Safe and smooth payment experience

Consumer

Money Service
Business・Long lead time to deposit (longcash cycle)
Merchant
・Difficulty in recruiting personnel

・Salary prepayment service offered

Payment
Enhancement
Business・Cannot chose the timing of payment

・ Flexible payment timing with GMO
Payment After Delivery

・Need to grow revenue

・Support revenue growth throughonline ad placements

・Long waits at medical institutions

・Reservation system for medical
institution that enables seamlessservice from reservation to payment

Consumer

Merchant

Consumer・Improve cash flow cycle with early
payment of sales proceeds

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

8

1.7 Positioning of GMO-PG group
Connecting merchants and payment companies through ‘contracts,’‘payment information,’ and ‘money flow’.
Consumer

Merchant
134,096 stores ※１(As of end-Mar 2022)

PC

OnlinePayment

Smartphone/Tablet

OfflinePayment

EC
B2B・B2C・C2C
Taxes, Dues, Utility
NHK, Electricity bill,
Municipalities (e.g. Tokyo)
National Tax Agency,
Automobile Tax
Subscription
Video streaming
Software, ApparelService/Commerce
Digital content
Donation, Insurance,
Travel※2

162,067 terminals(As of end-Mar 2022)
Payment Terminal

GMO-PG consolidated
subsidiaries

Payment
Companies
40+ Credit cardcompanies
Convenience store
Account Transfer
Carrier billing
Bank transfer

E-money
Cash on Delivery
GMO Payment
After Delivery
QR codeID-based payment
Multi-currency
Pre-paid※1 The standards for calculation the number of operating stores has been revised from Q2 FY2022. Figures exclude a specific case and the operating store related to a major delivery
service operator. If included, the number of operating stores is 397,670 stores as of end of March 2022 (up 59.9% YoY).
※2 Operating payment terminals: Starting from FY2021 the figure presents the combined number of payment terminals sold through sales partner and embedded-type payment
terminals. (up 68.6% YoY)

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

9

etc.

1.8 Payment Processing Business:
Revenue model of credit card payment processing
Revenue model determined by merchant size and type
■ Four revenue types (i.e. business models)Initial (Initial revenue)①②

Payment Terminal Sales
Coefficient: Number of terminals (units)
Revenue: Terminal sales (units)
× _Yen; paid at start of service■Revenue type determined by merchant type/size
Sales of
Payment
Municipalities
Terminals
Some Large Enterprise② ③①

Stock (Fixed revenue)
Fixed Monthly Revenue
Coefficient: Number of operating stores
Revenue： Operating stores × _Yen

Large and middle-sized
merchants② ③ ④③

Fee (Transaction processing revenue)
Fee based on transaction volume
Coefficient: Number of payments processed
Revenue： Number of payments processed× _YenStart-ups
Small businesses

Spread (Merchant’s revenue)④

Spread on the transaction value
Coefficient: Value of transaction
Revenue： Value of transaction ×_%④

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

10

1.9 Payment Processing: Two types of merchantcontracts
Payment
Processing

Direct contract

Payment
Processing

Several contracts withmultiple payment
companiesA

GMO-PG’s role

Data processing only

CreditCard
Company

2.8% Merchant Discount Rate (MDR)
Large GMV = Lower

MDR

Direct negotiations withpayment companies

Revenue type

GMO-PG consolidated
subsidiaries

No. of contracts

Flow of Revenue and charges

②

Stock

③

Fee

②

Stock

③

Fee

④

SpreadRevenue proceeds
Payment
Company

Merchant

Mainly large companies
and municipalities

Representative
contract

3.0％ charge

No. of contract

B

Reduceable via GMO-PG

GMO-PG’s role
Data processing/Deposit ofsales proceeds

2.5％ charge
GMO-PG consolidated
subsidiaries

Single contract with GMO-PG

MDR

0.5% Spread(Merchant acquiring revenue)

3.2% MDR （Smaller GMV = Higher）

CreditCard
Company(If merchant has direct contract with payment company)

Merchant

Mainly SMEs, but may
include large companies

Payment
Company（In consideration of acquiring
the merchant）※ Figures included are for illustration and reference purposes only.
※ This illustration represents the contracts for credit card. GMO Epsilon revenues are only derived from spreads (See page 10).

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

11

1.10 Revenue Breakdown by Business Model
Aiming for a balanced revenue growth by pursuing various initiatives
IFRS

J-GAAP（Mil Yen）
50,00045,000Spread40,00035,00030,00025,000Fee

20,00015,00010,000

Stock

5,000

Initial

0
04/9
05/9
TSE
Listing

06/9

07/9

08/9

09/9

2008
Launched
Early
Payment
Service

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

21/9

22/9E

2011
2010
Launched Launched
OnlineOfflinePayment AdvertisingService

2013
2014
2015
2016
2021
2020
2018
Launched Launched Revamped Launched
Consolidation Deconsolid ※ Buffort
services※
Payment TransactionEarly
becomes atargeting banks of GMO MRT ation of MK
After
Lending
Payment
subsidiary※
GMO-FG/MK
DeliveryServicebecomesubsidiaries※ GMO-FG stands for GMO Financial Gate. GMO-MRT stands for GMO Medical Reservations Technology, MK stands for MACROKIOSK.
※Due to adoption of IFRS accounting standards, the online marketing service (stock) and finance lease (spread) revenue recognition standard is changed from gross basis to net
basis from fiscal year ending September 2018.
Due to the deconsolidation of MACROKIOSK from FY2020, its business has been reclassified as a discontinued operations and is excluded from the revenue figures shown above.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

12

1.11 Summary Table of Segments, Business Model andServices

Reporting in 3 Segments and 4 business models■Business Model
Initial（Initial revenue)■ Segment
Online Payment ※Offline Payment
SSL Service

Online Payment
Offline Payment

Stock(Fixed revenue)

Online Payment ※Payment Processing
Business

Ginko Pay/Processing

GMO Payment After Delivery
GMO B2B Pay On Credit

Online advertising service
Medical Kakumei byGMO

Remittance Service
Instant Salary byGMO

Online Payment

Fee(Transaction
processing revenue)

Money Service
Business (MSB)

Early Payment Service

Early Payment Service

Transaction Lending

Online Payment

Spread(Merchant acquiring
service revenue )Overseas Lending

B2B Factoring

Medical Kakumei byGMO
Offline Payment
GMO Payment After Delivery
GMO B2B Pay On Credit
Overseas Lending

Ginko Pay/Processing

System Development

System Development

Offline Payment
GMO Payment After Delivery
GMO B2B Pay On Credit
Remittance Service
Instant Salary byGMO
Delivery service

Offline Payment

Online advertising service

Payment
Enhancement
Business

B2B Factoring

SSL service
Delivery service
Medical Kakumei byGMO

Transaction Lending※ Online Payment includes pay-as-you-go payment, recurring payment, Z.com Payment (overseas payment service).

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

13

1.12 Product map
GMO-PG’s definition of payment:
what enables the digitalization of money flow
No Credit Risk

Cashless
DX support
platform

Ginko PayPG Multi-Payment Service

Processing platform

EP payment service

Payment
Service

GMO Dokodemo Cashpoint SMS Choiceof Payment
GMO Cashless Platform

GMO-PG Remittance service
Early Payment service

Medical Kakumei byGMO

Payment terminals
Not included intransaction
value

Included intransaction
value

■

GMO B2B Early Payment
GMO B2B AR Guarantee
FinTech loans

Financial
Service※ TL stands for Transaction Lending

TL（GMO-PG、GMO-EP）

Online advertising service

Embedded payment solution

Instant Salary byGMO
■

■
■
■
■
■
■
■

Services thatcomplements payment

GMO Payment After Delivery

GMO B2B Pay on Credit

Condo Pay

Credit Risk※ TL：トランザクションレンディング PF：プラットフォーム
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

14

1

Business
Overview

p.3

2 Focus Areas

p.16

3

Reference
Materials

p.33

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15

2.1

Expansion of TAM and Profit Targets

Expand scope of business in the enormous market to achieve2025 OP target of ¥25 bn■ TAM by market segment, GMV, OP target and Priority Initiatives
P.25
BaaS・※2
Broader EC
P.21-24
FinTechOffline-26
P.17-20
Cashless
MarketSegment 2020
2025
2020
2025
2020
2025
2020

20
TAM
（¥ trn）

GMV（¥ trn）

OP（¥ bn）

45（BtoC EC）

352

1

3

2.5
8
（Early Payment,(Salary bank transfer）

5

13

75

180
～220 18

Priority
GMP※4
Initiatives B2B payment service

Global

P.29

2025

2020

2025

118

50

50～

（BNPL)

408～ Transaction Lending）（BtoB EC）
200 200～

DX Platform

P.27-28－－

30～
FinTechB2B payment service
Instant Salary byGMO

2

2～（IT investment by
Financial Institutions)

－
5

－
10～

DX Platform

87（Offline cashless market）

1
5(Overseas lending）

5

－

－

20～

－

30～

※3

Offline Payment (IoT)

GlobalFinTechFinTech※1 Figures for TAM, GMV, OP (operating profit) are GMO-PG’s estimates and targets. Figures are estimates and are rounded up to the nearest whole number.
There is some overlap in the OP figures for FinTech and Global. Offline OP includes companies other than GMO Financial Gate consolidated subsidiaries.
TAM: Total Addressable Market, BaaS: Bank as a Service, GMV: transaction value.
※2 BaaS/Cashless includes embedded finance.
※3 The OP figure for Global is included in FinTech for FY2020. ※4 Global Major Players (GMP): large corporates that provide IT-utilizing services globally.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

16

2.2.1

Narrowly-defined EC: B2C EC Market

Low cashless and EC penetration compared to
US/European countries■ Cashless penetration in Japan■ EC Penetration Rates in Developed Markets(ratio to private final consumption)（％）（¥ trillion）

30.8

UK
30.0

電子マネー
E-money70

QRコード
QR code

25.0
60

10.0
6.0
5.0

3.6

7.0
4.1

7.6

8.2

9.2

10.4

11.3

6.4

4.6

5.0

5.4

5.8

3.1

3.7

4.4

12

13

14

1.8

2.1

2.5

2.8

08

09

10

11

13.2

13.6
13.6

12.5

10.7
7.3
4.8

8.2
5.4

8.8

5.8

30

9.6
6.2

40

8.1
6.8

0

0.0
16

17

18

19

20

15
0.15

10
0.1

20
10

15

20
0.2

13.9

14.5
15.0

25
0.25

20.1

17.1

50

16.2

21.3

30
0.3

18.4

19.1
17.9

29.7

24.1

デビットカード
Debit card

Japan

20.0

26.9

クレジットカード
Credit card

80

27.9

USA

（％）

Cashless penetration

21※METI “FY2020 Global Survey Project Concerning Integrated Domestic and External
Economic Growth Strategy Building (E-Commerce market survey)”
U.S. Bureau of the Census “The 4th Quarter 2021 Retail E-Commerce Sales Report”;
Office for National Statistics ”Retail Sales Index internet sales, April 2022”

5
0.05

0

13
14
15
16
17
18
19
20
※ Cashless Penetration = Sum of credit card usage amount, debit card usage
amount, e-money usage amount, QR-code usage amounted divided by private
final consumption expenditure※ Cabinet Office “System of National Accounts”
Japan Consumer Credit Association’s Credit Card Statistics
Bank Of Japan’s Payment and Settlement Statistics
Payments Japan Association’s Code Payment Statistics

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

17

2.2.2 Broader EC: Expanding Scope of Cashless BusinessJapan’s migration towards cashless payment is contributing to
GMO-PG group’s growth acceleration
B2B
B2C
C2C
Narrowly-defined
B2C EC market¥19.3 trillion

OnlinePayment
CAGR: 6.2%

EC ratio: 8.1%

Enormous market¥1,000tr

OfflinePayment
CAGR: 9.8%

B2B
Credit card
payment

EC ratio (%)
Mrkt Size

2020
8.1¥19.3trPublic dues/Utility
・Local tax¥41 tr・National tax ¥70 tr

2025
14
¥40tr

Service, Commerce
Subscription
Omni-channel

Broader EC
Consumer spending¥300trFlea Market
App
Expansion phase¥1.95 trillion
Sharing
EconomyFlea Market※References：METI’s “FY2020 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”. Figures for 2025 are our estimates.
※MIAC “Breakdown of national tax and local tax revenue (FY2022 Budget and Local Government Finance Plan)”※THE WORLD BANK ”Household final consumption expenditure (current USD)”※Payments Japan Association’s “Cashless Roadmap 2019”; Yano Research Institute’s “Online Payment/Settlement Service Providers 2018.”

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

2.2.3 Characteristic of Payment Business: Cross-Industry
Payment is a required action for any purchase and is a highly
sticky application

Finance

Taxes

Water Supply

MedicalApparelPublishing

Manufacturing

EnergyLogistics

Education

Utility Bill

DigitalContent

Payment is a requisite action
Effective for customer consolidation

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

19

2.2.4

Broader EC: Public Dues and Utility Bills

Introducing card payments for public dues and taxes since
the amendment of the Local Autonomy Law in 2006
Local
Local Taxes (automobile tax, light vehicle tax,
governments fixed assets tax, etc.)
Water bill, gas bill, hometown tax
National tax credit card payment website
Broadcasting subscription fee
NHKCredit card usage rate at the end of FY2020:
17.5% (Up ＋0.6％ YoY)
TEPCO
EnergyPartner

Supporting digitalization of electric bill
payment to realize significant shift towards
paperless operations. Making progress incross-industry deployment of service.

Expansion expected to continue:
Maintenance fee, cram school tuition fee
parking fee, school meal charge, etc.

※Japan Broadcasting Corporation “Business Report for FY2020”

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

20

2.3.1 FinTech: Money Service Business (MSB)
Financial services that only a payment processing company can offer
Services

Related assets

GMO Payment After
Delivery
GMO B2B Pay On Credit

Pay the sales proceed ahead ofthe deposit from the consumer

Accrued revenues

Remittance service
Instant Salary byGMO※

Efficient and secure refund andremittance processing

Advances paid

Overseas Lending/Transaction Lending

Lending of growth funds

Accounts receivable-trade(short term loans)

Early Payment
service

Improves cash flows by bringing
forward the payment date

Advances paid

B2B Factoring

Early cash conversion of accounts
receivable

Accrued revenues

Business Model
③

Fee

④

Spread③

Fee④

Spread④

Spread④

Spread※ Instant Salary byGMO in offered in two types of deposit-type and reimbursement-type. Advances paid is recorded only for the reimbursement-type

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

2.3.2

FinTech: Japan’s BNPL market

Expand business by capturing the Japan’s unique BNPL needs
Outlook of Japan’s BNPL market

BNPL needs in Japan

A growing payment method driven by the
expansion of EC, use in conjunction withcredit card, and as an alternative to cash- (Unit: ¥ billion)
1,909
on-delivery and CVS payment(prepayment).
1,726

・Receiving goods before payment
・Cash payment
Consumer ・Manage and control spending
・Limit face time with delivery person
・Widen customer reach
Merchant ・Means of sales promotion
・Reduce & manage return risk

1,534
1,329

1,089

EC market breakdown by payment method(2020; by value)
Other 8.3％

Pre-paid
7.0％
Carrier billing
8.5％
Cash On
Delivery
5.8％(estimate）＋23.9％

Credit card
60.5％
Forecast to expand further

EC Market Size
※1・2
¥19.3 tril.
EC penetration 8.1%
CAGR 10％

CVS store
9.9％
Migrate to BNPL
※1 METI “FY2020 Global Survey Project Concerning Integrated Domestic and External
Economic Growth Strategy Building (E-Commerce market survey)”

NEW※2 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2022” and“Domestic Cashless Payment Market 2019”
The figure for FY2021 is an estimate, the figures for FY2022～FY2024 are forecasts.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

22

2.3.3

FinTech: BNPL business of GMO-PS

Established top-tier market share and earnings base as acomprehensive payment provider
J-GAAP
Key features of our BNPL business• Apply machine learning that utilizes thelarge amount of credit data
• Lower default rate by accumulating credit
data and collection know-how• Provide all payment methods needed in
the EC market as a comprehensive
payment provider• Rollout business-use BNPL bycollaborating with B2B operators（Mil Yen）
8,000

7,000

Revenue
Net Profit

6,000

5,000

4,000

3,000

2,000

• Stable profit generation andexpansion of transaction value• Leverage group synergy and build
top tier business foundation

1,000

0
17/9

18/9

19/9

20/9

21/9

-1,000

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

23

2.3.4

FinTech: Instant Salary byGMO

To be the de facto digital and seamless service provider in the¥220 trillion salary market
Collaboration with SMFG
2015

2016

2017

2018

2019

Growth Trend (image)
2020

2021

Positive BusinessprofitReorganization
Capital & Business alliance andThird-party allotment

Target Market

Service expansion（※）
Approx. 2 mil users

Salary banktransfer market
Approx.
¥220 tr.

Launched
in July

Acceleration of new customer acquisitions（※）Major sectors: Logistics & transport, delivery, relocation services
Employment type: temporary staff, part-time, etc.

An establishedsalaryprepayment(“sokkyu”)
service

Expertise inpayment andremittanceEntered the enormous salary market
that still depends on old-fashioned
cash handouts and analog processes

Jul. 2021

2007
SMBC Group launches“Sokkyu” service

Dec-2021
Strengthen collaboration
with SMBC
Added real time bankdeposit function※ SMFG: Sumitomo Mitsui Financial Group, Inc. SMBC Group: Sumitomo Mitsui Banking Corporation group (including Sakura Information System Co. Ltd.)

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

24

2.4.1 BaaS & Cashless（Embedded Finance ）Increase Ginko Pay adopters, interlink each service to create an
infrastructure-like service■Ginko Pay■ GMO Cashless Platform

Smartphone-based payment app marketed to financial institutions
that allows for immediate debit from user’s bank account
The Hokuriku Bank

The Hokkaido Bank

The Hiroshima Bank

Cashless solution for offline stores which offers a packageof payments methods including QR/Bar code.
Planning to launch new cashless payment method.

Sumitomo Mitsui
Banking Corporation

Offlinestore

QR/Bar code Payment
services

Japan Post Bank

The Bank of Fukuoka

Ginko Pay
The Kumamoto Bank

GMO
Cashless
Platform

Bank of Yokohama

The Juhachi-Shinwa Bank Bank of Okinawa（As of March 31, 2022）■ GMO-PG processing platform
One-stop support of various payment solutions for theissuing/acquiring businesses at business operators, credit
card companies and banks.

Start providing acquiring support function to JFR Card
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

25

2.4.2BaaS and Cashless

Deploy BaaS business by leveraging our strengths
MarketEnvironment

Strengths••••

Strategy

Potential
Market••Growing cashless and DX demand
Provide financial service embedded into main service of business operators
One-stop offering of payment know-how, money flow management, development
capability, and value
Provide functionalities and applications to FIs and business operators for theircashless business and DX implementation
Promote white label sales of proprietary products
30% of the IT investments by Japanese financial institutions of ¥2.4 tr is for new
development (as of 2021)

Value Proposition

Customers

Conventional financial service
Financial
Institution

Strengthen and optimize corebusiness with the power of IT
Processing Platform

Business
Operators

Transaction Lending

VISA
Business Card

Factoring

Salary prepayment

Peripheral financial service
Expand support
for peripheral
financial services

Ginko Pay

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

26

2.5.1 IoT: Offline Payment Market
Expand business scale through cashless migration and alliance strategy■Offline payment
GMO Financial Gate offers payment terminals for payments made at offline stores.

■Growth factors of the offline market•

Cashless demand from changing externalities such as
the “new normal” lifestyles
Mobile terminal

Embedded-type EMV terminal※

Target: Unattended Market
Vending(Goods)TicketCoffee Machine

Fare Adjustment(Golf, hotel)

Vending(Beverage/Food)

EV Charging Stn.
Parking Fee

Self Check-out

Coin Laundry

Capsule toy
machine■steraRollout of a new payment platform to provide a onestop service that handles variety of payment methods.

CustomerfacingMerchant
facingstera mobile※EMV: Uniform standard for IC-chip embedded credit cards formulated by Visa and MasterCard.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

27

2.5.2 GMO Financial Gate, Inc.: Overview■Name

GMO Financial Gate, Inc. (TSE Growth, security code 4051)■Date of Establishment

September 1999

■Location

Humax Shibuya Building 7F, 1-14-6 Dogenzaka, Shibuya-ku, Tokyo■Capital Stock¥1,618 million yen (As of May 13, 2022)■Major Shareholders

GMO Payment Gateway, Inc. and others■Management

President and CEO
ChairmanManaging Director
Director
Director
Director
External Director
External Director
External Auditor
External Auditor
Auditor■Auditor

Ernst & Young ShinNihon LLC■Consolidated Subsidiaries

GMO Card System, Inc. (Equity stake: 100%)
GMO Data, Inc. (51.0% stake; Sumitomo Mitsui Card Company, Ltd. 49.0%)■Business Description

Provides cashless payment infrastructure for credit card, debit card, e-money, etc.

Kentaro Sugiyama
Akira Takano
Akio Aoyama(GM of Sales Department)
Masamitsu Ikezawa (GM of Administration Department and Corporate Planning)
Tomonaga Fukuda (GM of System Department）
Tatsuya Koide(Managing Executive Officer of GMO Payment Gateway Inc.)
Nao Shimamura
Rie Asayama
Takayoshi Nagasawa
Satoru Ozawa
Takashi Iinuma(CPA; Representative of Iinuma General Accounting Firm)（As of May 13, 2022)

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

28

2.6

Global: Overseas Strategy

Leverage synergy of N. American investments and focus on
the growing SE Asian and Indian Markets

Payment Processing
Business■Business Area
North America

Innovation
CenterJapan

ProfitCenterMoney Service
Business

SE Asian & India

Growth Center■Strategy
Payment Processing Business
Collaborate with investee to provide local payment
services
Money Service Business
Invest/Lend to key FinTech companies
Payment
in NAm and Asia
Processing
・Acquire, introduce and transfer theBusinesslatest expertise and know-how
・Strengthen relations withborrowers and investees
Money Service
Business■Investments※1
Country

Major investees

Major borrowers※2※1 Investment and borrowers of GMO Payment Gateway and GMO Global Payment Fund
※2 Expected to transfer shares in June 2022.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

29

2.7.1

Sustainability

Integrated Report outlines the various initiatives torealize sustainability
28 th Integrated Report
URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/211220_gmo_pg_ir_integrated_report_en.pdf

Specific initiatives (excerpt)
Realize convenient and comfortablesociety by promoting EC and cashless
adoption
Promote impact finance to financial
inclusion FinTech companies(microfinance)

Support merchant’s decarbonization
through DX support and paperless
operations
Start payment processing using de facto
renewable energy
Selected as Best Company in the Great
Place To Work survey for sevenconsecutive years
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

30

2.7.2

Strengthening Governance Structure

Realize medium- to long-term improvement in enterprise value
through strengthening of supervisory function of the Board
Corporate Governance Organizational Structure① Transition to company with Audit and Supervisory
Committee② Proportion of External Director rises to a third①②③ Established a Special Committee
・ Comprised of five External Directors③

・Strengthen protection of interests of non-controllingshareholders

・ Transactions and actions that entail a conflict of interest
between the controlling shareholder and non-controllingshareholders are evaluated and deliberated at the Special
Committee and reported to the Board which is vested toreach a decision.

External Director
Special Committee

Director
Directors that are members of the Audit
and Supervisory Committee

Nomination andRemuneration
Committee
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

31

1

Business
Overview

p.3

2

Focus Areas

p.16

3

Reference
Materials

p.33

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

32

3.1

Company Outline (as of April 4, 2022)■ Name■ Management team
Chairman & Director
GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange Prime)
President & Chief Executive Officer■ Date of establishment March 1995
Director, Executive Vice President
Director, Executive Vice President■ Location
Director
FUKURAS office (Head office)Director
Director
SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku,
Director
Tokyo, 150-0043 Japan
Director
Humax OfficeDirector
External Director
Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku,
External Director, Audit & Supervisory Committee
Tokyo Japan
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee■ Capital stock 13,323 million yen
External Director, Audit & Supervisory Committee■ Major shareholders
Senior Managing Executive Officer
Senior Managing Executive Officer
GMO Internet, Inc., Sumitomo Mitsui Banking Corporation,
Senior Managing Director
Mr. Issei Ainoura ,etc
Senior Managing Director
Managing Executive Officer■ Auditor
Managing Executive Officer
Ernst & Young ShinNihon LLC
Managing Executive Officer
Managing Executive Officer■ Major consolidated subsidiaries
Managing Executive Officer※ Service, Inc.,
GMO Epsilon, Inc., GMO Payment
Executive officer
Executive officer
GMO Financial Gate, Inc.,
Executive officer
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), etc.
Executive officer
Executive officer■Major Equity affiliates
Executive officer
SMBC GMO Payment, Inc., GMO Data, Inc., 2C2P Pte. Ltd., etc.
Executive officer
Executive officer
Executive Officer
Executive Officer

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Masashi Yasuda
Hirofumi Yamashita
Yuki Kawasaki
Teruhiro Arai
Noriko Inagaki
Takashi Shimabara
Akio Sato
Kazutaka Yoshida
Kazuhiko Okamoto
Yumi Hokazono
Fumio Kai
Shinichi Sugiyama
Tatsuya Koide
Yuichi Hisada
Takashi Mitani
Tomoyuki Murakami
Masaru Yoshioka
Takeshi Yoshii
Katsunari Mukai
Kazunari Taguchi
Kiyonobu Inayama
Shingo Ito
Yoshinori Inokuchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Junpei Kendo
Katsuyoshi Sota
Takeshi Yoshida
Yusuke Nakayama※ Estimated to transfer shares in June 2022.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

33

3.2 Major subsidiaries and equity-method affiliates(IFRS standards)
Consolidated subsidiary

GMO Payment Gateway, Inc.

Equity method affiliate

Multi payment service（targets small-sized merchants）

GMO Epsilon, Inc.

FY2021 Revenue ¥4,824 mil, Ordinary income ¥3,050 mil. (J-GAAP)
GMO Medical Reservations Technology Co., Ltd.

Buy Now Pay Later

GMO Payment Service, Inc.

FY2021 Revenue ¥6,680 mil, Ordinary income ¥990 mil. (J-GAAP)

Offline payment (TSE Growth: Security code 4051)

GMO Financial Gate, Inc.
GMO Card System, Inc.

（As of end September 2021）equity stake: 57.3%(As of end September 2021) GMO Financial Gate, Inc. equity stake: 51.0%
Sumitomo Mitsui Card Company, Limited equity stake: 49.0%

GMO Data, Inc.
Overseas（Singapore）

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.
GMO-Z.com PAYMENT GATEWAY HONG KONG LIMITED（Headquartered in Hong Kong and a branch in Taiwan）

GMO Z COM PAYMENT GATEWAY MALAYSIA SDN.BHD.

（Malaysia）

GMO-Z.com PAYMENT GATEWAY (THAILAND) CO., LTD.

（Thailand）

GMO-Z.com PAYMENT GATEWAY INDIA PRIVATE LIMITED（India）

GMO-Z.com PAYMENT GATEWAY USA, Inc.

（USA）

Overseas

2C2P Pte. Ltd. ※Multiple payment service

SMBC GMO PAYMENT, Inc.

（As of end Sep. 2021）equity stake 29.3％(As of end Sep 2021) Sumitomo Mitsui Card Company
Sumitomo Mitsui Banking Corporation
GMO Payment Gateway Inc.

equity stake: 50.0%
equity stake: 10.0%
equity stake: 40.0%※ Estimated to transfer shares in June 2022.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

34

3.3 GMO Medical Reservations Technology
Provides reservation management system to improve
operations at hospitals and clinics■Medical Kakumei byGMO■Corporate Overview

Seamless services that not only includes reservation
function, but also reception, e-medical record link※
and cashless payment function.

Corporate
name

GMO Medical Reservations Technology Co. Ltd.

Establishment April 11, 2016

① Reservation② Reception③ Consultation④ BillPayment■Omatome Shinsatsuken byGMO
Bundle multiple medical cards of several
hospitals and clinics onto a single app
Contributes to improving reception work efficiency
and cancellation rates

Parentcompany
Address

GMO Epsilon, Inc.

（Equity stake: 100.0%）

Tokyo HQ: Humax Shibuya Building 7F, 1-14-6
Dogenzaka, Shibuya-ku, Tokyo
Hamamatsu Branch: Chanson Building 6F, 125
Daikumachi, Naka-ku, Hamamatsu-shi, Shizuoka
Revenue

CAGR＋112.5％

Other services also available
・Medical Kakumei byGMO for veterinary hospitals

・Dentry byGMO
19/9

20/9

21/9

※1 The following services of reception machines for repeat visits, e-medical record links and payment functions are available as option services.
※2 The revenue figure is based on J-GAAP.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

35

3.4

Continuous achievement of OP target

Earnings targets achieved through the earnings structurewith high visibility and a disciplined business operation
Operation Profit ※（Mil Yen）
16,000Initial Forecast

ActualContinuing stable growth and overcoming
external volatilities

14,00012,0002020
COVID-192019
Consumption tax
8→10％

10,000

8,000

6,000

4,000

2008
Lehman Shock
2,000

2011
Great East Japan
Earthquake

2014
Consumption tax
5%→8％

0

08/9
09/9
10/9
11/9
12/9
13/9
14/9
15/9
16/9
17/9
18/9
19/9
20/9
※1 Initial forecast for FY2018 is based on revised forecast to reflect the voluntary adoption of IFRS.
※2 Figures before FY2019 present operating profit before the deconsolidation of MACROKIOSK and include both continuing and discontinued businesses.

21/9

22/9E

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

36

3.5 Key Characteristics of Payment Business: Entry
Barriers
Japan’s unique business environment, built up advantage over
20 years since our founding
Legal regulation（Amended ISA, etc.）• Responding to tightening regulations
through repeated amendments• Merchant management, security enforcement

Payment company
Network• Unique payment practices (huge range of
payment methods) requires transactions
with multiple payment companies (page 9)

Business scale• Scale is key given low ASP• Merchant acquisition requires development
capability, sales capability and track record

Cross-industry
entrants

Start-ups

Overseas payment
companies

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

37

3.6

A cumulatively expanding customer baseStably expand the customer base through highly sticky services（Stores）

140,000

Operating stores ※134,096

Payment is an essential
operation that can not
be suspended

120,000

Sharing of personal
information such as
credit card information

Churn rates remain low due tohigh switchover costs

100,000

80,000Involved from the‘upstream’ development
given unique operationalflows and needs

60,000

Provide highly
needed financial
services in tandem

15/4Q
16/1Q
16/2Q
16/3Q
16/4Q
17/1Q
17/2Q
17/3Q
17/4Q
18/1Q
18/2Q
18/3Q
18/4Q
19/1Q
19/2Q
19/3Q
19/4Q
20/1Q
20/2Q
20/3Q
20/4Q
21/1Q
21/2Q
21/3Q
21/4Q
22/1Q
22/2Q

0
40,000※ The standards for calculating operating stores have been revised from 2Q FY2022. Operating stores exclude an operating stores related to a specific case. Figures from Q1 FY2017
above exclude the operating stores for a major delivery company; if included, the number of operating stores would be 397,670 stores (up 59.9％ YoY) for the same period.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

38

3.7 Expand line-up and expand revenue per customer
Diverse value proposition to existing customers
Promote up-sell through resolving customers’ issues
Our Strengths/Value Proposition

Expand Product

Early Payment•

Highly scalable payment platform

GMO-PG Remittance•

Incorporates various payment methods•

Win-win model of providing value added
services that contribute to revenue/TRX•

Multiparty platform for consumer,
merchants, and payment companies

B2B Financial services
TL (GMO-PG, GMO-EP)

Instant Salary byGMO

Medical Innovation byGMO

Online advertising service

Revenue per merchantDiverse payment methods(¥ thousand)

GMO Payment After Delivery

Payment Platform

GMO B2B Pay on Credit

296

336
310

266
239

Condo PayPG Multi-payment Service
EP payment services

Online/Offline(omni-channel)

SMS Choice of Payment
stera

ExpandingPayment Methods

2017/92018/92019/92020/92021/9Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

3.8 Our Position in the socio-economic New Normal
DX support services that improves client’s PL & BS
■Customer needs & PL/BS changes
PL

Revenue
Cost of Sales
SG&A

Rent
Communication

OP
Asset
Cash

Receivables
Provisions for
doubtful accounts
Fixed assets

Liabilities
PayablesNet Assets

EC shop, Utility bills
Multiple payment methods
Paperless (lower postal cost)
CF improvement service

PersonnelBS

Use cases

Payment arrears

Improve collection rate
Prevent suspicioustransactions
Restaurants
Delivery sales
Cashless implementation
Increase recruits(lower personnel cost)
Store closures(lower rent expense)
CF improvement service
Event, Ticket Sales
Merchandise sale
Refund demand(lower postage cost)

Our DX support services
PG Multi-Payment service
TEPCO EP’s
SMS Payment Choice
Cycle byGMO
GMO B2B Early Payment
Invoice Smartphone Payment
Fraud prevention service(Sift)

Online sales support
GMO Cashless Platform
Instant Salary byGMO

Electronic Invoice Early Payment

GMO B2B AR Guarantee
Online sales support
Remittance service(for refunds)

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.
40

40

3.9.1 Business outline of payment processing
company (1)Problems with online credit card payment in the early days of E-Commerce
Consumer

Payment
company

Merchant①order taking

Large volume of sales slips②Enter each
into theCAT terminal③Make sales report to eachcredit card company （sales processing）

network④Post mail sales
report to each credit
card company

Credit card company

Authorization（approval number
assigned）

Problems for merchants⚫ Duplicate order entry into CAT terminal andmerchant’s system⚫ Sorting documents/transaction for each credit
card company⑤Check whether payment
has been received
Payment⚫ Insufficient check on incoming payment⚫ Human error due to manual input
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

41

3.9.2 Business outline of payment processing
company (2)Payment processing service realizes operational efficiency in credit card
payment operations
Consumer

Payment
company

Payment
Processing
Company

Merchants①Order taking

Updatecard data
Real-time credit decision

Network

Sales processing

Transmit
sales data
②Check whether
payment has been
received(data collation)

Payment

Credit card company

Credit・sales

In the early days of Ecommerce, credit card payment was processed offline between themerchant and the credit card company, resulting in work burden on both sides.

The establishment of payment processing companies eliminated this burden for both parties.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

42