Supplementary Materials
Financial results briefing for the Q2 of FY2020

May 14, 2020
GMO Payment Gateway, Inc.
(3769; Tokyo Stock Exchange First Section)

https://www.gmo-pg.com /en /Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

Our Track Record of Growth
FY2020 Revenue guidance of ¥36.6bn, OP guidance of ¥10.3bn+14.0％■MACROKIOSK Revenue
30,00036,618※1

Revenue(Mil. Yen)
35,000(Mil. Yen)
10,000※1

Operating Profit

12,000+25.0%

32,121■Revenue excl. MK※1

EBITDA※2

10,376 (Mil. Yen)

8,000

+30.3%

10,0008,301

12,1889,351

25,000

8,000
6,000

20,0006,000
15,000

4,000
4,000

10,000
2,000

2,000

5,000

IFRS

Operating Stores ※3,4

122,328J-GAAPIFRSJ-GAAP

GMV Volume

GMV Value

2.09 billion¥5.1 trillion

2020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/92020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/9J-GAAP

2008/9

0

0

0

IFRS

（※1）Voluntary adoption of IFRS accounting started on FY2018, and figures for FY2020 is the earnings guidance as of November 12, 2020.
（※2）EBITDA under J-GAAP is calculated as the sum total of operating profit, depreciation and amortization; and EBITDA under IFRS is calculated as sum total of operating
profit and depreciation.
（※3）The number of operating stores is at the end of March 2020. Transaction volume and transaction value are the figures from April 2019 to March 2020; transaction
volume and transaction value include the figures of GMO Financial Gate.
（※4）Figures exclude a significant increase in operating stores from a specific merchant. If included, the number of operating stores is 281,500 stores.

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

2

Three business segments
Sustain an over 25% OP growth from the expansion of mainstay
payment processing business and its peripheral businesses
Payment Enhancement
Business
Asia Payment Enhancement
Business (MK)※
Online Advertising Service
SSL Service
etc.
Delivery Service

Revenuebreakdown(Actual data for Q2 FY2020)

1%

13%

17％

24％

Operating Profit
breakdown

59％

86%

Money Service Business(MSB)

Payment Processing
Business

GMO Payment after Delivery
Remittance Service
Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending※

Online Payment※
Offline Payment (GMO-FG)
Ginko Pay/Processing
System Development

etc.

etc.

※ Online payment includes pay-as-you-go and recurring billing and, Z.com Payment (overseas payment service)
GMO-FG stands for GMO Financial Gate consolidated subsidiaries, MK stands for MACRO KIOSK

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

3

Our Business Eco-system
An eco-system of our value-added services complementing our main
business to achieve mutual growth

Increase in transaction 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.

4

Payment Processing Business: Business scope of GMOPG and the major consolidated subsidiaries
Connecting merchants and payment companies through‘contracts,’ ‘payment information,’ and ‘money flow’.
Consumer

Merchant※

122,328 stores

GMO-PG consolidated
subsidiaries

40+ Credit cardcompanies(End of March 2020)

EC
B2B・B2C・C2C
PC

OnlinePayment

Smartphone

OfflinePayment

Payment Service
ProvidersConvenience store
Account Transfer

Taxes, Dues, Utility
NHK
NTA, Automobile Tax
Municipalities (e.g. Tokyo)

Multi-currency
Carrier billing

Subscription
Video streaming
Software, ApparelE-moneyService commerce
Digital content
Donation, Travel,
Insurance

Cash on Delivery

Pre-paid

Bank transfer

GMO Payment
After Delivery

39,595 terminals(End of March 2020)

Mobile payment

Payment Terminal

QR codeetc.

※ Figures exclude a significant increase in operating stores from a specific merchant. If included, the number of operating stores is 281,500 stores.

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

5

Payment Processing Business:
Revenue model of credit card payment processing
Revenue model determined by merchant size and type
■ Four Revenue Streams (i.e. Business Models)Initial (Initial revenue)

①

②

③

Initial introduction fees
Coefficient: Number of new merchants acquired
Revenue: Number of new merchants acquired
× _Yen (paid once at acquisition)

Local governments
Large Enterprise① ② ③

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

Fee (Transaction processing revenue)

Mid-sized
Enterprise① ② ③ ④

Fee based on transaction volume
Coefficient: Number of payments processed
Revenue： Number of payments processed× _YenSpread (Merchant acquiring service revenue)④■Revenues by merchant type/size

Fee based on transaction value
Coefficient: Amount of payments processed
Revenue： Amount of payments processed× _%Start-ups④

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

6

Payment Processing: Two types of merchant contracts
Created the Representative Contract and effectively changed
the flow of revenue proceeds
Direct contract
Applies to some large companies
and municipalities

Payment
Processing

Payment
Processing
GMO-PG consolidated
subsidiaries

2.8% Merchant Discount Rate (MDR)

Merchant

Revenue proceeds

CreditCard
Company

Payment
Company

0.5％ Spread(Merchant acquiring revenue)
Representative
contract

3.0％ charge

Mainly for SME’s but also
covers some large companies

2.5％ charge
GMO-PG consolidated
subsidiaries

3.2% MDR
Merchant※ Figures included are for illustration purposes only.

(MDR applied for direct contract withpayment company)

CreditCard
Company

Payment
Company
Flow of Revenue and charges

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

7

Revenue breakdown by business model
Aiming for a balanced revenue growth(Mil. Yen)IFRSJ-GAAP

38,00036,00034,00032,000Spread30,00028,00026,00024,00022,00020,00018,00016,000Fee

14,00012,00010,000
8,000
6,000

Stock

4,000
2,000

Initial0

2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9 2017/9 2018/9 2019/9 2020/9E
2008
Launched
Early
Payment
Service※ GMO-FG stands for GMO Financial Gate. MK stands for MACROKIOSK.
TSE
Listing

2011
Launched
OnlineAdvertisingService

2013
2014
2015
2016
Launched Launched Revamped Launched
Payment Transaction Early
services
After
Lending
Payment targeting banks
DeliveryService
GMO-FG and MK ※become subsidiaries

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

8

Segment revenue trend
Comprised of 3 businesses of Payment Processing, Money Service and,
Payment Enhancement(Mil. Yen)
40,00038,00036,00034,00032,000J-GAAP

IFRS
Payment
Enhanceme
nt Business

30,00028,00026,00024,000Money
ServiceBusiness

22,00020,00018,00016,00014,00012,00010,000

Payment
Processing
Business

8,000
6,000
4,000
2,000
0
2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9 2017/9 2018/9 2019/9 2020/9E
2016
2013
2014
2015
TSE
2008
2011
Launched Launched Revamped Launched
Listing
Launched
Launched
services
Payment Transaction Early
Early
Onlinetargeting banks
After
Lending
Payment
Payment
Advertising※
DeliveryService
Service
Service
GMO-FG and MK
become subsidiaries※ Reported only the single segment of payment processing until FY2015, commenced segment disclosure from FY2016. GMO-FG stands for GMO Financial Gate; MS stands for MACROKIOSK.

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

9

Summary chart of Business Model, Segments and Services
Reporting in 3 Segments, consisting of 4 business models■Business Model■ Segment
Online Payment

Initial（Initial revenue）

System Development
SSL Service
Online Payment

Stock(Fixed revenue)

Payment Processing ※Offline Payment (GMO-FG)

Payment Processing
Business

Offline Payment (GMO-FG)

Remittance Service

Offline Payment (GMO-FG)
Remittance Service
Asia Payment Enhancement
Business (MK)Delivery service

Money Service
Business

Asia Payment Enhancement
Business (MK)※GMO Payment After Delivery
Early Payment Service
B2B Factoring
Transaction Lending
Asia Payment Enhancement
Business (MK)

Early Payment Service

Transaction Lending

Offline Payment (GMO-FG)
Overseas Lending

Overseas Lending

B2B Factoring

Online Payment

Spread(Merchant acquiring
service revenue )Ginko Pay/Processing

GMO Payment After Delivery

Online Payment
GMO Payment After Delivery※

System Development

Ginko Pay/Processing
Online advertising service

Fee(Transaction
processing revenue)

Offline Payment (GMO-FG)

Payment
Enhancement
Business

Online advertising service
SSL service
Delivery service※ Online Payment includes pay-as-you-go and recurring billing, Z.com Payment (overseas payment service).
GMO-FG stands for GMO Financial Gate. MK stands for MACROKIOSK.

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

10

The 5 Focus Areas
Expanding business in the 5 focus areas to achieve sustainable growth
５ Focus Areas

Narrowlydefined EC;
Broader EC(Page No.)

（P.11）（P.12～13）

Payment Processing Business

Payment Enhancement Business
Online advertising service

Online Payment(Pay-as-you-go/Recurring)

SSL service
Delivery service
GMO Payment
B2B Factoring
After Delivery
Transaction Lending
Remittance Service
Early Payment Service

FinTech（P.14～15）

Cashless（P.16）

IoT（P.17）

Offline Payment (GMO-FG)（P.18～19）

Z.com Payment(Overseas payment service)

GlobalMoney Service Business

Ginko Pay
Processing Platform

Overseas Lending

Asia Payment Enhancement
Business (MK)※ GMO-FG stands for GMO Financial Gate, MK stands for MACROKIOSK.

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

11

Narrowly-defined EC: B2C EC Market
Low penetration rate of cashless relative to US/European countries and highproportion of cash payment■EC Penetration Rates in Developed Markets（％）（2016)

Credit Card
usage rate

Debit card

Credit+Debit usage
to private final
consumption
expenditure rate※

South Korea

76 ％

19 ％

95 ％

9.9

UK

12 ％

55 ％

67 ％

6.2

Australia

30 ％

25 ％

55 ％

US

25 ％

19 ％

44 ％

Japan

18％

-

18 ％

16.2

USA
14.5

Japan
12.5

11.0

11.3
10.4
9.2

10.0
7.0

7.6

8.2

3.6
1.8

4.1
2.1

4.6
2.5

8.2

8.8

7.3

6.0
5.0

■ Card usage rate to private final consumption expenditure

17.9

UK

15.0

19.0

5.0
2.8

5.4

3.1

5.8
3.7

6.4
4.4

4.8

5.4

5.8

0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Figures are GMO-PG estimates.
Sources：METI. “FY2018 Survey of Infrastructure Development Status for Datadriven Society in Japan (E-Commerce market survey)”
U.S. Census Bureau “nThe 4th Quarter 2019 Retail E-Commerce Sales Report”;※ Card usage rate= (Amount handled by CC or DC) / Private final consumption
expenditure※ GMO-PG Estimates by referencing: CPSS Red Book “Statistics on payment, clearing
and settlement systems in the CPMI countries - Figures for 2016,”
THE WORLD BANK ”Household final consumption expenditure (current USD)”

Office for National Statistics ”Retail Sales Index internet sales, March 2020”

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

12

Broader EC: Expanding Scope of Cashless Business
The migration towards cashless payment is our growth accelerator

B2B

B2C

C2C

Blue ocean
market¥1,000 trillion

Narrowly-defined
B2C EC market

Nascent market

OnlinePayment

OfflinePayment(card-present)¥17.9 trillion¥1 trillion

EC ratio: 6.2%
(approx. 10% CAGR)

Merchandise EC
2018 2020
EC ratio (%) 6.2
7
Mrkt Size ¥17.9tr ¥22tr

B2B
Credit card
payment

Public dues/Utility
・Local tax¥41tr
・National tax ¥68tr

2025
15
¥45tr

Flea Market
App

Service commerce
Subscription

Broader EC
Consumer spending¥300trFlea Market*References：METI. “FY2018 Building infrastructure for information- and service-oriented Japanese economy and society (Ecommerce market survey)”. Figures for 2020 and after
are our estimates.
*MIC “Breakdown of national tax and local tax revenue (FY2020 Budget and Local Government Finance Plan)”*THE WORLD BANK ”Household final consumption expenditure (current USD)”

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

13

Broader EC: Public Dues and Utility Payments
Pioneered card payments for public dues and taxes since therevision of the Local Autonomy Law in 2006

Local
Local Taxes (automobile tax, light vehicle tax,
governments, fixed assets tax, etc.)
etc.
Water bill, gas bill, hometown tax

Sapporocity

National tax credit card payment website
NHK

National broadcasting subscription fee
Credit card usage rate at the end of FY2018:
15.9% (Up ＋1.0％ YoY)

Tokyo

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

Fukuokacity

Osaka pref./city

Aichi pref.

*Japan Broadcasting Corporation “Business Report for FY2018”

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

14

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

MSB-related assets

Business ModelFee

GMO Payment
After Delivery

Pays sales proceed without waitingfor deposit from consumer

Accrued revenues

Remittanceservice

Efficient and secure refund and remittanceprocessing for Ecommerce operators－

Overseas Lending/ Lending of growth capital
Transaction Lending

SpreadAccounts receivable-trade(short term loans)

Fee

SpreadEarly Payment
service

Improves cash flows by bringing
forward the payment date

Accounts receivable trade (advances paid)

SpreadB2B Factoring

Early cash conversion of accounts
receivable

Accrued revenues

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

15

FinTech: GMO Payment After Delivery
Deferred payment provided by subsidiary GMO Payment Service■Market size of deferred payment■GMO Payment After Delivery(Unit: bn Yen)

Robust growth of the Deferred Payment market.
Market size in FY2019 estimated at ¥755 billion 2,010.8
and forecast to reach ¥2 tr. In FY2023.

Buyer can pay at a post office or CVS store after
receiving goods
Payment term (deadline) is 2 weeks.

EC site1,583.3

1,246.7②Credit check③Goods delivery & receipt⑤ Deposit

974.0①Order755.0(est.)＋32.0％④Mailing invoice/payment slip
Convenience store
Post officeBank⑥Payment of purchase amount

User

Payment services with over 2 weeks
payment terms are also available

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023※ Source: “Current situation and future forecast of online payment service
providers 2019” and, “Domestic Cashless Payment Market 2019,” issued by Yano
Research Institute Ltd.
Figures for FY2019 are estimates, and figures for FY2020 to FY2023 are forecasts.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

16

Cashless
Increase Ginko Pay adopters, interlink each service to create an
infrastructure-like service■Ginko Pay

A smartphone app system marketed to financial
institutions that allows for immediate payments
such as direct debit
The Hokuriku Bank

■ GMO Cashless Platform
Cashless solution for offline stores which offers apackage of payments methods including QR/Bar codeand is scalable to include new payment methods

The Hokkaido Bank

PhysicalStoresSumitomo Mitsui
Banking Corporation

The Hiroshima Bank

The Bank of Fukuoka

Ginko Pay
The Kumamoto BankThe Shinwa Bank

QR/Barcode Payment
Service

GMO
Cashless
Platform

Japan Post Bank

Bank of Yokohama

Bank of Okinawa（As of March 31, 2020)■ Cash-out (withdrawal) service

Cash withdrawal can be made from ticket vending
machines at Tokyu Line train stations using Ginko Pay
framework (Jointly developed with Tokyu
Corporation, Bank of Yokohama and Japan Post Bank)※ not available at certain stations of Tokyu Line■ Processing Platform
A one-stop package of various payment solutions for
issuing and acquiring businesses, offered to banks,
credit card companies and general businesses.

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

17

IoT: Offline Payment Market
Rollout of IoT services; capture cashless & inbound demand■Offline payment
GMO Financial Gate offers payment terminals for payments at offline stores
Embedded-type EMV terminal

Amendment of Installment Sales Act:
Replacement demand for IC chip equipped
terminals from conventional magnetic strips
Tokyo Olympics and Paralympics:
Cashless payment demand to surge with theincrease of inbound tourists.
with
PIN

with
PIN

with
PIN

※

without
PIN

Future target and potential: Unattended Market
Vending machine(Drink/food)

Ticket vending
machine(Railway company)

Auto payment
machine(Parking, hotel, hospital)

Office coffee
machineSelf check out, EV charger,
goods selling machine,laundromat,
Self-order kiosks/touch pad※EMV: uniform standards for IC-chip enabled credit cards created by Visa and MasterCard.

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

18

Global: Overseas Strategy
Expand customer coverage through strategic investments and assisting
Japanese companies’ foray into the Asian market■Investment target■Payment processing business
Asia: Top payment-related company

US: Innovation equity stakes

Portfolios of Investments by GMO-PG and GMO Global Payment Fund

Providing payment services toJapanese companies expanding into
the Asian market (Z.com Payment)

GMO Payment Gateway’s overseas locations

USA

TaiwanIndia

Hong Kong
ThailandPhilippines
Vietnam
Malaysia
Singapore

＋69％
YoY

Invest in Fintech-related or
cutting-edge payment
service companies

GMO Global Payment FundJapan’s first Fintech fundtargeting payment-related
startups in Asia (AUM ¥2bn)

NearlyTripledIndonesia

GDP
Approx.＄4.5T
5-6% Growth

FY2015Initial Investment

Current Market
Value

FY2016FY2017FY2018FY2019Transaction value in Asia surging

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

19

Global: Payment Enhancement Business (MACROKIOSK)
Focus on investment in MACROKIOSK and acquiring of Asian banks andbig companies
Strategy: Scale First (scale first, then profit)

Company name Macro Kiosk Berhad
Location

Malaysia and 11 Asian countries

Headcount

258

Financial results Revenue:

5,199 million yen (FY2019 Actual)

GMO-PG’s stake 70％<Specific actions>①Payment-related businessSet up sales teams in India and Europe②Business expansion in new countries
Provide payment service, collaborating with 2C2P, anequity method affiliate③Development of new products④Entry into new markets through M&A

Acquisition cost Approx. 1,121 million yen
Businessmodel

SMS mobile solution (about 90％)delivered to 95％ of Malaysian banks

Carrier billing gateway (about 10％)

Guangzhou

delivered to 50+ major carriers in 12 countries

Macau
BangkokTaichung

Hong Kong

ManilaHo Chi Minh

Kuala Lumpur
Singapore
Jakarta（end of September, 2019）

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

20

Major subsidiaries and equity-method affiliates
Consolidated subsidiary

GMO Payment Gateway, Inc.

Equity method affiliate
Multi payment service（targets small-sized merchants）（Financial results of FY2019）
Revenue：¥3,483mil, Ordinary income: ¥2,350mil (J-GAAP)GMO Epsilon, Inc.

GMO Medical Reservations Technology Co., Ltd.
Payment After Delivery

GMO Payment Service, Inc.

（Financial results of FY2019）
Revenue: ¥5,048mil, Ordinary income: ¥1,212mil (J-GAAP)

Offline payment

GMO Financial Gate, Inc.

（As of end of Sep. 2019）65.0％ stake

Global Card System, Inc.
GMO Data, Inc.
Overseas

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.

（Singapore）

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）

Overseas

Macro Kiosk Berhad（As of end of Sep. 2019）70.0％ stake（Financial results of FY2019）
Revenue: ¥5,199mil, Profit attributable to owners of parent: ¥223mil (IFRS)

Overseas

2C2P Pte. Ltd.

（As of end of Sep. 2019）33.0％ stake

Multiple payment service

SMBC GMO PAYMENT（As of end of Sep. 2019）49.0％ stake(As of September 30, 2019)

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

21

Company Outline■Name

GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange First section)■Date of establishment

March 1995

■Location

FUKURAS office (Head office) SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku, Tokyo, 150-0043 Japan■Capital stock

4,712 million yen

Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku, Tokyo Japan■Major shareholders

GMO Internet, Inc., Sumitomo Mitsui Banking Corporation, Issei Ainoura ,etc

■Management team

Chairman & Director
President & Chief Executive Officer
Director, Executive Vice President
Director, Executive Vice President
Senior Managing Director
Director
Director
Director
Director
External Director
External Director
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Standing Auditor
AuditorExternal Auditor
External Auditor

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Yuichi Hisada
Masashi Yasuda
Takehito Kaneko
Hiroyuki Nishiyama
Hirofumi Yamashita
Masaya Onagi
Akio Sato
Tomoyuki Murakami
Shinichi Sugiyama
Masaru Yoshioka
Takeshi Yoshii
Takashi Mitani
Katsunari Mukai
Kazunari Taguchi
Yoshikazu Yanagishima
Kiyonobu Inayama
Shingo Ito
Yoshinori Inoguchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Junpei Kendo
Kazutaka Yoshida
Takashi Iinuma
Kazuhiko Okamoto
Yumi Hokazono■Auditor

Deloitte Touche Tohmatsu LLC■Consolidated subsidiaries

GMO Epsilon, Inc., GMO Payment Service, Inc., GMO Financial Gate, Inc.,
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), Macro Kiosk Berhad, etc.

■Equity affiliates

SMBC GMO Payment, Inc., 2C2P Pte. Ltd., etc.

（As of March 31, 2020)

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

22

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.

23

Business outline of payment processing company (2)Payment processing service adds operational efficiency to credit card payment

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
merchant and 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.

24