Supplementary Information

Financial results briefing for the Q4 of FY2016

November 7, 2016

GMO Payment Gateway, Inc.
(3769: Tokyo Stock Exchange section - 1 )h t t p : / / c o r p . g m o - p g . c o m /Online payment
Our group business field is mainly online payment
Offline（cardpresent) payment

Online payment（ Point ）（ Point ）Must present credit card
Must provide signature
Use terminals such as
POS terminal & CATterminal

No need to present credit card
Use postcard, telephone, fax
Use Internet
Use automatic payment
machine which registers credit
card number in advance

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

2Business outline of payment processing company(1)Problems of the existing online credit card payment
ConsumerShops（merchants）①OrderLarge volume of expense sheets

TelFAX②Enter each into theCAT terminal

Post
cardnetwork③Make sales report to eachcredit card company（sales processing）④Post sales report toeach credit cardcompany

Credit card company

Authorization（get approval number）

Internet

Problems in the business Need to enter twice→CAT terminal and our system Sorting for each credit card company
 Insufficient check for deposit money⑤Check whether payment has been
received
Deposit payment

 Human error

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

3

Business outline of payment processing company(2)Payment processing service
which could do credit card payment operation efficiently
ConsumerShops（merchants）

Payment processing company① Order

Update credit
card information

Tel

Post
card

network

Processing sales

Submit sales report

FAXInternet②Check whether
payment has been
received＜Credit decisions in real-time＞

Credit card company

Credit. Sales

Deposit payment

In the early days of EC, offline processing was done for online credit card
payments between merchants and credit card companies, increasing theburden of each.
To solve this problem, payment processing companies have been
established and made it easier to do business.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

4

Business outline - The role of our group
We connect merchants and businesses dealing withcontracts, payment information and money transactions
ConsumerMerchants

Company & ServiceBusiness related<merchants=Our Customers>

Online77,256 shops

More than 40
credit cardcompanies

Narrow definition EC・Internet Shopping

CVS Payment

Public money
・National Broad Casting・Prefectures(Tokyo,Osaka)ComputeService Commerce・Donation
・House rent
・Tuition fee
・Rental fee for Wi-fi

Smartphone

E- Money
Cash on Delivery

Payment processing
Money service business
Advertising

Online Banking
E-WalletCarrier billing

Payment afterdelivery

OfflineG l o b a l P a ym en t

27,449 terminals
Real shop

Payment processing
Money service business

BitCoin Payment
Apple Pay Payment

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

etc.

5

Revenue model for credit card payments
Revenue model by merchant scale■Revenue breakdown

Merchant＜Merchants＝our customers＞①

Initial
Initial introduction fees
Coefficient： Number of merchant newly acquired
Sales：Number of new merchant acquired × ~Yen/time of introductions

Enterprise

Stock

②

GMO-PG

Customer support and maintenance fee
Coefficient: Number of merchant
Sales：Active merchants × ～Yen/monthSME
Fee③

Fee charge per transaction(number)
Coefficient: Number of payment processed
Sales：Number of payments processed × ～YenStartup④

GMO Epsilon

SpreadFee charge per transaction (amount)
Coefficient: Number of payment processed
Sales：Number of payments processed × ～%Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

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Two types of contract form
Contract type and the flow of money
Direct contract
with merchants

processed payments

processed payments

Our group
Credit cardcompany（3％）
Business relatedMerchants

Representativecontract
with merchants（3.0％）(3.6％）
Our group

0.6％ Merchant acquiring
service revenue

Credit cardcompany*The depositsof merchants
Credit card company↓
Our group↓Merchants（4%）
Merchants*Numbers are provided for illustration purposes only.

Business related
The deposits of merchants
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

7

Revenue breakdown
Action plans to realize the balanced growth(¥1,000)
12,000

Merchant acquiring
Service revenue
Payment Processing
Transaction Lending
Early Payment
Finance Lease etc.

10,000Transaction processing
revenue
Payment Processing
Payment After delivery
Shipping services
Remittance Service etc.

8,000

6,000

Monthly revenue
Payment Processing
Online Advertising
Serivice etc.

4,000

2,000

Initial revenue
Payment Processing
System Development
SSL etc.

0
2004/92005/9listed on
the TSE

2006/92007/92008/92008
Launched
EarlyPayment

2009/92010/92011/92012/92011
Launched
OnlineAdvertisingService2013/92013
Launched
Payment
Afterdelivery

2014/92015/9 2016/9E

20142015
2016年
Launched Renewed Acquisition
Transaction Earlyof FG, MK
Lending
Payment*MK:MACRO KIOSK, FG:GMO Financial Gate

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

8

Growth potential of the EC market in Japan
Low EC ratio and high cash payment ratio■EC ratio■The ownership rate of credit cards

12.5（％）

11.3UK8.2
7.6

7.3

7.0
6.4
6.0

UK

14 ％

37 ％

51 ％

US

24 ％

19 ％

43 ％

Korea

69 ％

15 ％

84 ％

Australia

31 ％

23 ％

54 ％

Japan

15 ％

-15 ％

5.8
5.0

5.0
4.1

5.4

4.8

4.6

3.6

4.4

2.1

2.5

2.8

3.1

3.7

0.0
2008

A+B

9.2

Japan

1.8

Debit card
usage ratio
(B)

10.4

US

10.0

Credit card
usage ratio(A)（2014）

2009

2010

2011

2012

2013

2014

2015

* Ratio=(Amount handled by CC or DC) / (Private final consumption
expenditure* Estimated by GMO-PG, CPSS Red Book
References：METI, [Market report in regard to EC 2014] , American Bureau of the Census「QUARTERLY RETAIL E-COMMERCE SALES 4th Quarter 2015」,Office for National Statistics
THE WORLD BANK「Household final consumption expenditure (current US$)」｢Retail Sales, March 2016」

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

9

Our approach to Japanese EC market
Approaching to all kinds of EC markets
BtoB

BtoC

CtoC

Enormous market
potential;¥1,000trillion

Narrow definition
BtoC EC market

Developing market¥13.8trillion ($138bil)($10bil)($10tri)

Offline(card-present)

The rate of EC4.8%（growing at a annualrate 10～15%）

OnlineGoods

BtoB
credit cardpayments

Flea marketapps

2016
EC rate(%)
4.8
Market scale(T¥)13.8

2020
2025
8
15
24 $240bil
45 $450bil

Services,
digital contents

Public fund・
Public utility fee・Local tax¥36trillion ($360bil)
・National tax ¥58trillion ($580bil)

Consumer spending¥300trillion ($3tri)*METI「Market report in regard to EC 2015」¥1trillion

Flea market*1＄=100JP¥ (As of August,2016)

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

10Expansion of public funds and utility paymentsOur approach to these public money payments

zei.tokyo(Metropolitan Tax Credit Card Payment Site)

LaunchedApril
2015

SapporoLocal governments etc. ：Local Tax (Automobile Tax,Light vehicle tax, Fixed assets tax, etc.)
NHK：Broadcast subscription fee（ Credit card usage rate at the end of FY2015: 12.8％ ）Japan Pension Service ：National pension insurance fees
Osaka

Great potential for expansion
Maintenance fees, Cram school tuition fees
Parking fees, Charge for a school meal, etc.

TokyoFukuoka
Kyoto*Nippon Housou Kyoukai Business Report for FY2014Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

Definition of Money Service Business（MSB：Financial Business）
Financial services that only payment processing company
can provide
ConsumerMerchant

GMO-PG group

Business related

GMO-PG Remittance Service（③）
Efficient and secure refund and remittanceprocessing for e-commerce operators

Transaction
lending（④）
RefundRemittance

Credit card companies
Convenience storesElectronic money
Mobile phone companies
etc

Financing moneyfor growth

Dealing with daily transactions

Revenue model (sales breakdown)①②③④

Early payment（④）
Early payment

PaymentImproving cash flows by moving up
the date of payment to member stores

InitialStock
FeeSpread

Payment after delivery（③）
Improving cash flows“GMO payment
after delivery”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

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Segment/Revenue model/Service
３ Segments and ４ Revenue models
３ Segments

Payment processing

Payment processing
business

System development

4 Revenue models

Payment processing

InitialSSL(Initial revenue)FG

GMO Financial Gate

System development

etc

etc

Stock

Payment after delivery(Monthly revenue)

Remittance ServiceMoney service
businessetc

Payment processing

MSBFeeEarly payment
etc

Payment after delivery(Transactionprocessing revenue)

Remittance Service

FG / MK

Delivery service

Online Ad ServiceOthers

Online Ad ServiceFG

Transaction lending

Finance Lease

Payment processing

etc

Payment processing

SSLSpreadTransaction lending

Delivery service(Merchant acquiring
service revenue )Early payment

MACRO KIOSKFGetc

Finance Lease*MK:MACRO KIOSK, FG:GMO Financial Gate

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

etc

13

New Business
GMO-PG group’s new business and profit status■Online Advertising Service（GMO-PG）
Sales

FY2012FY2013

FY2014FY2015FY2016■GMO-PS■GMO-FG

Amount of processed payments

Ordinary income

FY2012FY2013

FY2014FY2015Acquisition ofGMO FinancialGate

FY2016FY2013

FY2014FY2015FY2016

2016/9Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

14

GMO-PG Group
GMO Payment Gateway’s subsidiaries and affiliated company
GMO PAYMENT GATEWAY, Inc.
＜ Consolidated subsidiary＞
Multiple payment（small scale）

GMO Epsilon, Inc.
Payment after delivery（Financial results for the term ending September 30,2015）
Sales：1,865 million yen, Ordinary income：1,220 million yen

GMO Payment Service, Inc.
Offline(card-present) field

GMO Financial Gate, Inc.

（As of Sep 30,2016）Proportional share 65％

Overseas

GMO PAYMENT GATEWAY PTE. LTD.

（Singapore）

GMO PAYMENT GATEWAY HONG KONG LIMITED（Hong Kong, Taiwan）

GMO PAYMENT GATEWAY MALAYSIA SDN. BHD.

（Malaysia）

GMO PAYMENT GATEWAY (THAILAND) CO.,LTD.

（Thailand）< Equity-method affiliate >Overseas

MACRO KIOSK Berhad（As of Sep 30,2016）Proportional share 70％

Multiple payment

SMBC GMO PAYMENT（Established November,2 2015）Proportional share 20.0％
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15Company outline■NameGMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange section-1)■Date of establishment

March 1995

■Location

1-14-6, Dogenzaka, Shibuya-ku, Tokyo, Japan■Capital stock

4,712 million yen■Major shareholders

GMO Internet, Inc. , SMBC, Issei Ainoura ,etc

■Members of the Board

Chairman & Director
President & Representative Director
Executive Vice President
Executive Vice PresidentManaging Director
Director
Director
Director
Director
Director
Senior executive officer
Senior executive officer
Executive officer
Executive officerExecutive officer
Executive officer
External Director
External Director
AuditorExternal Auditor
External Auditor
AuditorExternal Auditor■Managing underwriter（Main）Nomura Holdings, Inc.、（Sub）Mizuho Holdings, Inc.

■Auditor

Deloitte Touche Tohmatsu LLC■Subsidiaries

GMO Epsilon, Inc. GMO Payment Service, Inc.
GMO PAYMENT GATEWAY PTE. LTD. GMO PAYMENT GATEWAY HONG KONG LTD.
GMO PAYMENT GATEWAY MALAYSIA SDN. BHD. GMO PAYMENT GATEWAY (THAILAND) CO., LTD
GMO Financial Gate, Inc. MACRO KIOSK Berhad（As of Sep 30, 2016）
SMBC GMO PAYMENT, Inc.

■Affiliated companies

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Yuichi Hisada
Yasuhiko Kimura
Tomoyuki Murakami
Tadashi Ohshima
Shinichi Sugiyama
Yusuke Arai
Takeshi Yoshii
Masaru Yoshioka
Katsunari Mukai
Jyunya Tokuyama
Yoshikazu Yanagishima
Kazunari Taguchi
Masaya Onagi
Akio Sato
Yasuhiro Kanda
Akihiro Suzuki
Masashi Yasuda
Takashi Iinuma
Kazuo Ikeda

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

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