IR Introduction- Business Overview & Business Model Q3 FY2024

August 9, 2024
78th Investor Meeting

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

1

0. At A Glance
Key features of GMO-PG group’s business model and the mechanism of sustainablegrowthMarketValue
Proposition

CustomerBase・Broad-based & high growth payment market✓ Repeating and indispensable part of any
commercial transaction✓ EC penetration (JP 9% vs. US/Euro
approx. ~30%）✓ Cashless adoption (JP 39%/vs. US/Euro
approx. ~60%)✓ FinTech and DX

Positioning

・Contributing via “payment＋α”✓ Growth support and business operation
Competitivereform (toB)advantage✓ Improving convenience (toC)✓ Decarbonization and financial inclusion (toSociety)・Sales, system development, customer support
capability and reliability
・Scale merit
・Proprietary applications
・Diversification through consolidated management(CP, BNPL, BaaS support)

・Cross-industry
・High growth industry leaders・Public sector

・Stock ＆ transaction✓ Balancing growth and stability
・Mutually enhancing model (customer
growth = increased payments)
・High operating margins (over 30%)
・Low churn rate

Revenuemodel

・Expand business domain✓

GrowthStrategy・Leading player✓ GMV ¥14.9 trn (FY2023)✓ Revenue ¥63.1 bil（FY2023)✓ Employees 825（End-Sep 2023)
・High entry barriers

Credit card payment⇒Multi-payment⇒
CP⇒FinTech⇒Global⇒DX・Project sizes are enlarging due to industry-specificapplications and re-bundling productsManagement
Discipline

・18 consecutive years of revenue and profit
increase, achieving earnings guidance・Performance based remuneration
・Highly experienced leadership team fromentrepreneurs, start-ups, management(0⇒10⇒100)

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

2

1. Business
Overview

p.4

2.

Focus Areas

p.21

3.

Sustainability

p.42

4.

Reference
Materials

p.49

Abbreviations used in the material are as follows:
GMO-PG : GMO Payment Gateway
GMO-EP : GMO Epsilon
GMO-MR : GMO Medical Reservations Technology
GMO-PS : GMO Payment Service
GMO-FG : GMO Financial Gate
GMO-CAS : GMO Card System
PF: Platform

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

3

1.1 Our Track Record of Growth
The results of management policy focused on sustainable growth
Revenue*1（¥ mil）

73,286（¥ mil）
25,00025,000Operating Profit*1（¥ mil）

28,373

EBITDA*1.2

70,000+16.1％
60,000+23.1%
20,00063,133+24.8%

25,00020,312

22,731
20,00050,00015,00040,00015,00030,00010,00010,00020,000

5,000

5,000

10,000IFRS

J-GAAP

IFRS*3*5

Consolidated

Annual TRX volume(trailing 12-month average)
Consol.
Online payment

155,671 stores7.09 billion

Operating Stores*3 *4

6.21 billion

J-GAAP

23/9

24/9E

22/9

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

23/9

24/9E

22/9

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

24/9E

23/9

22/9

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

J-GAAP

12/9

0

0

11/9

0

IFRS

*3

Annual TRX value(trailing 12-month average)
Consol.
Online payment¥17.7 trillion¥11.6 trillion*1 Macro Kiosk has been deconsolidated in FY ending September 2020. Figures for revenue, operating profit and EBITDA present the figures for continuing operations only and exclude discontinued operations.
*2 EBITDA under J-GAAP is calculated as the sum-total of operating profit and depreciation and goodwill amortization; 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 June 2024. Consolidated transaction volume (trailing 12-month average) and consolidated transaction value (trailing 12-month average) incl
the figures of GMO-FG.
*4 The standards for calculation the number of operating stores has been revised from Q4 FY2023. Figures exclude a specific case and fincode byGMO. If included, the number of operating store IDs would be665,675 stores (up 18.3% YoY).
*5 Transaction (TRX) volume is calculated based on fee revenue standards, which in the case of online consists of multiple (1 to 3) transactions per payment that includes authorization (tentative sales proceeds) and actual saleproceeds, and one transaction per payment in the case of CP.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

4

1.2 Consolidated Management
Realize Group-wide stable growth through sound business operation that agilely
responds to the business environment of each of the major Group companies

Omni-channel Strategy

Expand payment
method offerings
Share customer base

Diverse customer
coverage

Sharing of management principles, corporate culture and group-wide
resource allocation
GMO-PG
Major
Business

Customer

GMO-EP

GMO-FG

Payment Processing Business
Online

GMO-PSBNPL businessCP

OnlineMunicipalities, large to
mid-sized corporates

Small operators

CP stores, Unattended
machines

EC operators, consumers

Non-merchandise, andmerchandise

Mainly merchandise

Non-merchandise, andmerchandise

Mainly merchandise

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

5

1.3 Three Business Segments
Sustain an over 25% OP growth from the expansion of mainstay payment
processing business and its peripheral businesses
Payment Processing Business・Online Payment*￥

・CP Payment
・Ginko Pay/Processing
・System Development

2%
22％
Payment After
Delivery
GMO-PS

Money Service Business・GMO Payment After Delivery/
GMO B2B Pay On Credit/atokara（Actual data for Q3 FY2024）

Online payment
GMO-PG
GMO-EP
Revenue
Breakdown

CP payment
GMO-FG

76％

・Remittance Service/Instant Salary byGMO￥

・Overseas Lending
・Early Payment Service

1%

・B2B Factoring
・Transaction Lending
Payment Enhancement Business・Online Advertising Service
・SSL Service￥

14%

Operating
ProfitBreakdown

・Delivery Service

85%・Medical Kakumei byGMO* Online payment includes pay-as-you-go and recurring payment and Z.com Payment (overseas payment service).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

6

1.4 Our Value Proposition
Businesses and services to comprehensively cater to customer’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 withcentralized management
・Cut cost and payment/invoicing work
・Advanced system and customer support

・Limited number of payment methods
・Concerns over payment security

・Broad range of payment methods offered・Safe and smooth payment experience

Consumer

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

・Improve cash flow cycle with early
payment of sales proceeds
・Salary prepayment service offered・Cannot choose the timing of payment

・Flexible payment timing with GMO
Payment After Delivery

Consumer

Payment
Enhancement
Business

Merchant ・Need to grow revenue

・Support revenue growth throughonline ad placements

Consumer ・Long waits at medical institutions

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

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

7

1.5 Our Business Eco-System
An expanding eco-system where the value-added services
complements the main business to achieve mutual growth
Increase inpayment processing

Payment processing（Gross margin 85％）

Money Service
Business
Payment
Enhancement
Business

Payment
Processing
Business

Customer growth
Main Business

Value-added business that
contribute to the growth ofthe main business
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

8

1.6 Revenue Trend by Segment
Three segments of Payment Processing Business, Money Service
Business and, Payment Enhancement Business（¥ mil）

J-GAAP

IFRS

75,00070,000

Payment
Enhancement
Business
Money
ServiceBusiness

65,00060,00055,00050,00045,00040,00035,000

Payment
Processing
Business

30,00025,00020,00015,00010,000
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
22/9
23/9 24/9E
2018
2021
2010
2020
2011
2013
2014
2015
2016
Launched Launched Launched Launched Revamped Launched Consolidation Deconsoli Buffort
CP
OnlinePayment Transaction Early
services of GMO MR dation of becomes a
subsidiaryMK*
Payment Advertising After
Lending
Payment targeting banks
Service
DeliveryService
GMO-FG/MK*
become subsidiaries* There was only one segment of Payment Processing Business until September 2015; segment information disclosure began from FY ending September 2016. 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.

9

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

Finance

Taxes

Water Supply

MedicalApparelPublishing

Manufacturing

EnergyLogistics

Education

Utility Bill

Digital Content

Provide payment infrastructure tovarious industries – an indispensable
part of commercial transactions

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

10

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

Merchant

GMO-PG consolidated
subsidiaries

155,671 stores*1

40+ Credit cardcompanies(As of end-Jun 2024)

Convenience store

EC
PC

B2B・B2C・C2C

Taxes, Dues, Utility
NHK, Electric Power Co.,
National Tax Agency,
Municipalities

Account Transfer
Online Payment

E-money

Video streaming
Software, Water server, etc.

Cash on Delivery

Service/Commerce
Digital content
Donation, Insurance,
Travel361,367 terminals*2(As of end-Jun 2024)

Payment
Terminal

Carrier billing
Bank transfer

Subscription
Smartphone/
TabletPayment
Companies

GMO Payment
After Delivery

CP Payment

QR codeID-based payment
Multi-currency
Pre-paid
etc.

*1 The standards for calculation the number of operating stores has been revised from Q4 FY2023. Figures exclude a specific case and fincode byGMO. If included, the number of operating store IDs would be665,675 stores (up 18.3% YoY).
*2 Operating payment terminals present the figures for GMO-FG which include the number of terminal-free active IDs, and excludes GMO-PG’s GMO Cashless Platform.
The growth rate of the number of terminals shown above is an increase of 32.2% YoY.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

11

1.9 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)① Initial (Initial revenue)
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
Municipalities
Some Large Enterprise② ③② Stock (Fixed revenue)
Fixed Monthly Revenue
Coefficient: Number of operating stores
Revenue: Operating stores × _Yen

③ Fee (Transaction processing revenue)
Fee based on transaction volume
Coefficient: Number of payments processed
Revenue: Number of payments processed× _Yen④ Spread (Merchant’s revenue)
Spread on the transaction value
Coefficient: Value of transaction
Revenue: Value of transaction × _%Sales of Payment
Terminals①

Large and middle-sized
merchants② ③ ④Start-ups/
Small businesses② ④

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

12

1.10 Payment Processing: Two Types of Merchant Contracts
Direct Contract

Payment③ Processing

Payment
Processing

No. of contracts
Contracts with multiple
payment companies② Stock③ Fee

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

MDR
Direct negotiations withpayment companies

GMO-PG’s role
Data processing only

Revenue type

Revenue proceeds

Merchant A

Payment Company

Mainly large companies
and municipalities

Credit card company
Flow of Revenue and charges

Representative
Contract

Payment③ Processing

Revenue type
② StockNo. of contract
Single contract with
GMO-PGMDR 3.0％

MDR
Reduceable via GMO-PG

Sales
proceeds

GMO-PG’s role
Data processing/
Deposit of sales
proceeds

Payment
Processing

MDR 2.5％④ 0.5％
Sales
proceeds（Merchant contract）

Merchant B
Mainly SMEs, but may
include large companies

3.2% MDR (Smaller GMV = Higher MDR)

Payment Company③ Fee④ Spread（In considerationof acquiring themerchant）

Credit card company(If merchant has direct contract withpayment company)

Flow of Revenue and charges* Figures included are shown for purpose of comprehension only.
* This illustration represents the contracts for credit card. GMO Epsilon revenues are stock and spread (See page 12).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

13

1.11 Revenue Breakdown by Business Model
Aiming for a balanced revenue growth by pursuing various initiatives（¥ mil）

J-GAAP

IFRS

70,000Spread60,00050,00040,000Fee
30,00020,000Stock
10,000Initial
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
2010
2011
Launched LaunchedCP
OnlinePayment AdvertisingService

13/9
14/9
15/9
16/9
17/9
18/9
19/9
20/9
21/9
22/9
23/9
2018
2013
2014
2015
2016
2020
2021
Launched Launched Revamped Launched Consolidation Deconsolida Buffort
of GMO MR
Payment Transaction Early
servicestion of MK* becomes a
After
Lending
Payment targeting banks
subsidiary
DeliveryService
GMO-FG/MK*
become subsidiaries

24/9E* 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.

14

1.12 Summary Table of Segments, Business Model and Services

Reporting in 3 segments and 4 business models
Business Model
Initial（Initial revenue)

Segment
Online Payment*
CP Payment
SSL Service
Online Payment
CP Payment

Stock(Fixed revenue)

Online Payment* / fincode byGMO

Payment Processing
Business

System Development

System Development

Online advertising service

GMO Payment After Delivery /GMO B2B Pay On Credit /atokaraOnline Payment

Spread(Merchant acquiring
service revenue)

Ginko Pay / Processing / GCP*

Ginko Pay / Processing / GCP*

Medical Kakumei byGMO

Fee(Transaction
processing revenue)

CP Payment

CP Payment
GMO Payment After Delivery /GMO B2B Pay On Credit /atokaraRemittance Service /Instant Salary byGMO
Delivery service
Medical Kakumei byGMO
Online Payment /fincode byGMO
CP Payment
GMO Payment After Delivery /GMO B2B Pay On Credit /atokaraOverseas Lending
Early Payment Service

Remittance Service /Instant Salary byGMO

Money Service
Business

Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending
Online advertising service

Payment Enhancement
Business

SSL service
Delivery service

B2B Factoring
Transaction Lending

Medical Kakumei byGMO* Online Payment includes pay-as-you-go payment, recurring payment, Z.com Payment (overseas payment service) and GCP stands for GMO Cashless Platform.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15

1.13 Competitive Advantage and Achievements

Expand value provided to clients to contribute to client’s growthCompetitive Advantage≒
Comprehensive Capability

Product

Nos. of payment
methods

Sales
Capability

Sales Personnel

Development
Capability

Engineer
Personnel

Past

Present（As of end-Sep 2011）（As pf end-Sep 2023）

１

Over 30

Credit card pure-play（payment)（*Before 2005）

Multi-payment
Implemented Open API type from May 2023

Approx. 295*1

Approx. 40

Industry specific sales teams

Approx. 247*1

Approx. 30

Customer
SupportCapability

The only payment service company to be awarded theSeven Star rating for “HDI Support Center Certification” *2

Investment
Capability

GMO Global Payment Fund: Market value approx. 20x the initial investment
amountAnnual TRX Value

Approx. ¥0.9 trn

Approx. ¥14.9 trn

Operating Stores

Approx. 26K

Approx. 146K

Operating Profit

Approx. ¥1.4 bil

Approx. ¥20.3 bil

Approx. ¥9.0 mil

Approx. ¥25.0 mil

Reliability

Achievement

Operating Profit
Per Employee*1 The standards for calculation have been changed from Q4 FY2023. The number of sales and engineer personnel includes partners of GMO-PG group of consolidated subsidiaries and exclude external collaborators.
*2 HDI: World’s largest membership organization of IT support services.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

16

1.14 Re-Bundling*1

One-stop support of merchant’s growth through productscalability (resulting in enlarging project size)
Value proposition to merchants/users: examples of products offered

Examples of supporting merchant’s growth

Strengthen online sales
Reduce payment operation burden
Create new UI/UX

Onlinepayment

SMS
Complete payment on
Choice ofsmartphone“Re-bundling*1” payment function from themerchant’s perspective
Early
Improve cash flow
Payment

payment

Stimulate demand Online
marketingof customers

Convenient payment
at physical stores
Tackle labor shortage

TL*2

CP
payment

QR code payment at
physical stores

GMO
Cashless
Platform

BaaS
supportDrive customers’ proprietarycashless business

Salaryprepayment

Secure growth
funds

Payment
After
Delivery/
Pay oncreditMerchant

Remittance

Payment After Delivery
Invoicing operational
efficiency

Pay after
receiving goods

Makingremittance andrefunds easy

Alleviate labor shortage

TL*2

BaaS Support
Strengthen eco-systemthrough cashless business
Remittance
Responding to user’s remittance/cash
withdrawal needs

Online payment

Building track record with regional banks,
restaurant chains, apparel,utility, high-growth start-ups, etc.

*1 Re-bundling refers to the unbundling of each function of financial services and recombining (re-bundling) it according to the user’s perspective.

*2 TL stands for transaction lending.

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

17

1.15 Continuous Achievement of OP Target
Earnings targets achieved through a highly visible earnings structure
and a disciplined business operation
Operation Profit*（¥ mil）

Initial Forecast

25,000

ActualContinuing stable growth while overcoming external volatilities

20,0002020
COVID-19

15,0002019
Consumption tax
8→10％

10,0005,000

2014
Consumption tax
5%→8％

2011
Great East Japan
Earthquake

2008
Lehman Shock
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

21/9

22/9

23/9

24/9E

* Initial forecast for FY2018 is based on revised forecast to reflect the voluntary adoption of IFRS. Figures before FY2019 present operating profit before the deconsolidation of MACROKIOSK and include both
continuing and discontinued businesses.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

1.16 Medium Term Target and Basic Policy

Target OP CAGR of 25% after strengthening business foundations
Image of revenue trend and basic policy

Strengthen businessfoundation

Medium term management target

OP CAGR 25%
Min. 20% growth on a single year basis
New projects

Image of revenue trend・Monetize large-scale projects
・Advance sales structure andproject management
・Strengthen product scalability
・New business creation(incl. joining group)

Trend line ofrevenue growth atcruising speeda : Project sizeb : Project lead timeabExtracted from Financial Results Briefing for FY2023 on November 14, 2023.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

19

1. Business
Overview

p.4

2.

Focus Areas

p.21

3.

Sustainability

p.42

4.

Reference
Materials

p.49

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

20

2.1 Focus Markets
Sustain high growth from expanding revenues in existing services
and entering new domains
The five focus areas(¥ bil）

・Overseas lending

・

60

50

40

30

Businessdomainexpansion
centeredaroundpayment

2017
BaaS Support service
launched（GMO-PG）

・Ginko Pay base system
・GMO-PG ProcessingCPbecomes consol.
subsidiary

GMV ¥4 trn

・2015
Full scale launch of
Money Service
Business（GMO-PG）

・GMO Cashless Platform

290K units(GMO-PG）

・

FinTech・・

GMO Payment After Delivery
GMO B2B Pay on Credit

・

2005

Operating terminals

・TL*

2013

MarketexpansionBaaS
3-yr CAGR 29%

2016

Established
20

Loan balanceApprox. ¥14.5bil

platformMarketshare
expansion

Globalatokara2012
Establishedglobal offices

GMO-PS
Revenue(GMO-PS） Approx. ¥7.0 bil

・EP Payment service(GMO-EP）
・10

Joins PG group

Broader EC
・PG Multi-payment(GMO-PG） GMV ¥10 trn
service02001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
* TL refers to transaction lending, figures are before consolidated eliminations.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

2.2 Narrowly-Defined EC: B2C EC Market
Low cashless and EC penetration compared to US/European countries
EC Penetration Rates in Developed Markets*1

Cashless Penetration (ratio to private final consumption)*2 *3（¥ trn）

（％）

UK
USA

30.0

Japan

140

27.9

26.5
26.6

25.0

Gov’t target Future: 80%
2025: 40%

Cashless Penetration
Credit Card
Debit Card
E-money
QR code

31.0

120

39.3
36.0

35%

29.7
20.0

30%

26.8

17.9

24.1
19.1

16.2
14.5

15.4

14.6

15.0

25%
80

14.7 14.7

21.3

95%

12.5
10.4
7.0

7.6

8.2
6.4

60

7.3

8.2

8.8

9.6

10.5
8.8

15%

62%

40

6.8

10%

53%
20

5%

0

0.0
08

09

10

11

12

13

14

15

16

17

18

20%

65%

9.1

8.1

6.2
5.4 5.8
5.8
5.0
5.4
4.6
4.8
4.1
4.4
3.7
3.6
3.1
2.5 2.8
1.8 2.1
6.0

5.0

11.3

9.2

10.0

45%

40%

32.5

100

（％）

19

20

21

22

23

0%
17

18

19

20

21

22

23

24

25

*1 METI “FY2022 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”, U.S. Bureau of the Census “The 1st Quarter 2024 Retail
E-Commerce Sales Report”, U.K. Office for National Statistics ”Retail Sales Index internet sales, July 2024”*2 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.
*3 Figures for Japan, South Korea, UK and USA are excerpts from Payments Association Japan’s “Cashless Roadmap 2023.” Figures for Taiwan are from National Development Council figures.
Actual figures for Taiwan are up to 2019, 2021 for South Korea, UK and USA and, 2022 for Japan.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

22

2.3.1 Broader EC: Expanding Scope of Cashless BusinessJapan’s migration towards cashless payment contributes to accelerating
the growth of GMO-PG group
BtoB

BtoC

CtoC

Merchandise EC*1
Market size of ¥13.9 trn
EC penetration 9.1%
Enormous market¥1,000 trillion

Flea Market App

Expansion phase¥2.21 trillion
Narrowly-defined EC*1
Market size ¥22.7 trn
Public dues/Utility*2・Local tax¥44 trn・National tax ¥72 trn

Service, Commerce
Subscription
Omni-channel
Broader EC DtoC

Sharing Economy

BtoB
Credit card payment

Consumer spending*3¥300 trillion*1 References：METI’s “FY2022 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)” and Yano Research Institute Ltd. .
Figures for 2025 are the company’s estimates. *2 MIAC “Breakdown of national tax and local tax revenue (FY2024 Budget and Local Government Finance Plan)”*3 Cabinet Office “National Accounts (GDP statistics)”*4 Payments Japan Association’s “Cashless Roadmap 2019”; Yano Research Institute’s “Domestic Cashless Settlement Market 2022.”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

23

2.3.2 Broader EC: Target Markets

Address each vertical in the vast white space
Broader EC: cashless penetration by industry(credit card usage)

Proportion of household expenditure by industry*4

MerchandiseEC ¥13.9 trn*1

Narrowly-definedEC ¥22.7 trn*1

Other

Broader EC¥60 trn*2

Transportation

Market size by industry*3

Cashless penetration*3

Education
Travel64%¥17 trn

Electric power, gas,water
¥14 trn
Healthcare¥5 trnReal estate (Rent) ¥13trn

32%
24%

Real estate(rent)

Merchandise

Healthcare

18%

Electric power,gas, water

Local/national
taxes¥117 trn

Insurance¥34 trn

12%

Education¥5 trn5%16%Nonmerchandise

Address majority of household expenditureby promoting cashless migration*1 METI ‘s “ FY2022 E-Commerce Market Survey.” The narrowly-defined EC includes merchandise EC and some services and digital content.
*2 Figures are estimates of GMO-PG which presents the sum of the B2C EC market and the cashless market size of the target markets. *3 Based on GMO-PG estimate*4 Based on GMO-PG estimates by referencing Consumer Affairs Agency’ “Family Income and Expenditure Survey“ consumption expenditure colomns.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

24

2.3.3 Broader EC: Taxes/Public Dues and Utility Bills
Entered into the public dues/taxes sector in 2006 when Local Autonomy
Law was amendment; pioneered credit card payments in this sector
Tax

National tax credit card payment website
National tax smartphone app payment service
Hometown tax
Water bill, etc.

NHK

Broadcasting subscription fee
Credit card usage rate at the end of FY2023:
19.1% (Up ＋0.5％ YoY)*

Electric Power Supporting digitalization of electric billGas
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 FY2022”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

25

2.3.4 Broader EC: Transaction Volume*

Stable growth by capturing pay-as-you-go and recurring payment（100 million
transactions）
50

40

Digital content

Pay-as-you-go
payment

subscription

Payment occurs at each

30

purchase

20

Electricity bill
10

Recurring payment
Water utility bill
NHK Broadcast Fee

Fixed amount paid
periodically

0
03/9

04/9

05/9

06/9

07/9

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

21/9

22/9

23/9

* TRX volume is calculated based on fee revenue standards, which in the case of online consist of multiple (1 to 3) transactions per payment which includes authorization and actual proceed amount, and one
transaction per payment in the case of CP.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

26

2.3.5 Broader EC: Transaction ValueTRX Value = Sustainably grow revenues at client/merchants that we support/service（ ¥ trn）

9

8

Direct Contract
57%

7

6

5

4

3

Representative
Contract
43%

2

1

0
03/9

04/9

05/9

06/9

07/9

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

21/9

22/9

23/9

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

27

2.3.6 Broader EC：PG Multi-Payment Service

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

28

2.4 Broader EC：GMO-MR
Provides reservation management system to realize operational
efficiency at medical hospitals and clinics
Product/Value proposition

Growth strategy

A reservation system for medical institutions
that provide seamless coverage fromreservation to bill payment

・Expand target domains
・Expand “reservation+α” product line-up
・Realize synergies with GMO-PG
consolidated companies(complements payment processing)

GMO-MR revenue and OP (annual trend)
Revenue (actual)
Operating profit/loss (actual)

Sep. 2019 Reception
Non-NHI covered
treatment plan

Oct. 2022 Questionnaire
Implement online questionnaireAug. 2022 Consultation
Implement online
medical consultation

C2B：Nationwide medical institutions(200K sites)
B2E：Medical professionals (10.7 mil)*1
TAM*2 ¥5.6 trn

CAGR+85.6%

Reception
Dec. 2018
Launch of Omatome Medical
Registration Card byGMO
Reservation
Aug. 2018
Joins PG group Bill payment

FinTechMedical DX SaaS
(Vertical SaaS)
B2B： Large medical corporate entities,
regional collaboration
TAM*2 ¥200.0 bil

Reservation
management
SaaS
B2B：Clinics
TAM*2 ¥78.0 bil
FY2019FY2020

FY2021

FY2022*1 Ministry of Health, Labor and Welfare’s white paper report “Annual Health, Labour and Welfare Report 2022.”

FY2023*2 Figures are GMO-PG estimates using market statistics.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

29

2.5.1 FinTech: Money Service Business

Money Service Business that contributes to expanding payments
Service

Related assets

Business Model

GMO Payment After
Delivery
GMO B2B Pay On Credit③ Fee

Pay the sales proceed ahead ofthe deposit from the consumer

Accrued revenues

Improves cash flows by bringing
forward the payment date

Advances paid

④ Spreadatokara
Early Payment service
Overseas Lending
Transaction Lending

Lending of growth funds

Accounts receivable-trade(short term loans)④ Spread④ Spread

B2B Factoring

Early cash conversion of
accounts receivable

Accrued revenues④ Spread

Remittance service

Efficient and secure refund
and remittance processing

N/A③

Receive salary at preferred timing

n/a (deposit-type)
Advances paid
(reimbursement-type)③ Fee

Instant Salary byGMO

Fee

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

30

2.5.2 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

Consumer・Receiving goods before payment
・Cash payment
・Manage and control spending
・No face time with delivery person

A growing payment method driven by the
expansion of EC, used in conjunction withcredit card and as an alternative to cash-ondelivery and CVS payment (prepayment).

(Unit：¥ bil）

2,450.3
2.145,6

Merchant

・Widen customer reach・Means of sales promotion
・Reduce return risk

1,887.1
1,644.7
1,428.2（estimate）

EC market breakdown by payment method（by value）+11.3%

Other 12.8％
Credit card
63.7％

Pre-paid
10.3％

Cash On
Delivery
4.7％

Forecast to
expand further

EC Market Size
¥22.7 trn*1 *2
EC penetration 9.1%
CAGR 10％

CVS store
8.6％
Migrate to BNPLFY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027*1 METI “FY2022 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”*2 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2023” *3 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2024” and “Domestic Cashless
Settlement Market 2019.” The figure for FY2023 is an estimate, the figures for FY2024～FY2027 are forecasts.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

31

2.5.3 FinTech：BNPL Service “atokara”

Realize flexible and convenient payment to be used in adiverse purchasing scenes
Expanding service domains of atokara (size of addressable markets)*

・Data storage over 10 years/Business creation with partnercompanies leveraging base system‐SMCC x GMO-PS/GMO-PG’s customer base, sales capability,
consumer business expertise, comprehensive payment capability‐Usage expansion at merchants with stera terminals

CP stores
Long duration installment(up to 36 installments)

・Entry into consumer business operators with end-customer base・Expand revenue model and product/merchant baseHigh price range/
services

Short term Merchan
lump-sum -dise EC¥14 trnSomemerchandisePaper
invoiceCase-by-case
Payment
After
Delivery

Conventional
Payment After
Delivery service

Significance of new businessEC home appliance¥3 trnEC service ¥6 trn
EC digital content¥3 trnApp/WebCP(non-credit
card)¥200 trn

Transaction screenshot (membership type/CP transaction)

Membership stera
type
terminal
New features

New BNPL service“atokara”* Ministry of Economy, Trade and Industry, “FY2022 E-Commerce Market Survey”, Payments Japan Association “Cashless Roadmap 2023”, Cabinet Office’s National Accounts of Japan (GDP statistics).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

32

2.5.4 FinTech： Instant Salary byGMO (Salary Prepayment Service)

Be the de facto standard of digitalization and seamless
operation in the ¥231 trn salary market
Service

Growth strategy

Enables salary for the work completed to be
paid instantly and whenever・Entering into short-term labor market
・Penetration within industry (CVS chain)・Making inroads into B2E domain

Target market

Salary bank transfer market:
Approx. ¥231 trn
・E-salary payment
・DX of salary operations

Value proposition
Supports a sound cash
management by employees
Strengthen recruitment + improve
employee satisfaction
Reduce man-hours throughdigitalization of salary prepayment
operations

Expand scope ofsalary remittance
Salary prepayment
Users：
Approx. 2 mil people
Major industries：Logistics, security, restaurant, retail, relocation
Type of employment：Staffing service, part-timers, etc.

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

33

2.5.5 FinTech: B2E Domain

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

34

2.6.1 BaaS（Embedded Finance）
One-stop payment solution by leveraging our payment know-how and track record
Revolutionary credit card issuing system “H-ALIS”*

GMO-PG Processing Platform

クレジット
Issuing
カード
Gateway
イシュイング
サービス

FEP

ハウス
Network
ソリューション
サポート
Acquiring
Prepaid Card
Issuing

Management
dashboard
カード会員利便性向上

CommonPlatform

House
デビット
Solution
プリペイド
カード
カードCardDebit Card Issuing Credit
イシュイング
Issuing
イシュイング
サービス
サービス

対外接続
External connectivity
マーケティング・販売促進 等

Rollout from Oct. 2023 through collaboration among 4
companies: GMO-PG will carry out development, FEP
and sales in Japan【Background】【Background】

・Expansion of cashless/DX needs
・Financial services provided by business operators

Operators have growing need for speedy issuing ofvarious types of credit cards to promote theircashless initiatives【Value Proposition】【Value Proposition】

Freely choose from payment solutions andcommon platform according to business needs

・Enables low-cost and swift credit card issuing・Seamless system linkage by using API base・Prompt functional upgrades* The four companies refers to Hyundai Card Co., Ltd., Bankware Global Co., Ltd., EXA CORPORATION, GMO Payment Gateway, Inc.
FEP stands for Front End Processor and refers to the system required for a credit card company to connect/access an external network.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

35

2.6.2 BaaS/ Card Present IoT
Increase Ginko Pay adopters, interlink each service to create an infrastructure-likeservice
Ginko Pay

GMO Cashless Platform

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

Cashless solution for CP stores that offers a package of
payments methods including QR/Bar code.
Planning to launch new cashless payment method.

The Hokuriku Bank

The Hokkaido Bank
Sumitomo Mitsui
Banking Corporation

The Hiroshima Bank

The Bank of Fukuoka

Ginko Pay

Japan Post Bank

銀行Pay

The Kumamoto BankThe Juhachi-Shinwa Bank

QR/Bar code Payment
services

CP
store

GMO
Cashless
Platform
Bank of Yokohama

Bank of Okinawa（As of June 30, 2024）

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

36

2.7.1 Card Present IoT: CP Payment Market

Scale-up business through cashless migration and alliance strategy
CP payment：GMO Financial Gate, one of our Group companies, offers payment terminals for payments madeat CP stores.
【Growth factors of the CP market】
Cashless demand arising from diversifying payment
method and government promotion measures
Mobile terminal

Embedded-type EMV* terminal

Target: Unattended Market

Vending(Goods)TicketCoffee Machine

Fare Adjustment(Golf, hotel)

Vending(Beverage/Food)

EV Charging Station
Parking Fee

Self Check-out

Coin Laundry

Capsule toy machine【stera】
Rollout of a new payment product of Sumitomo Mitsui
Card Co., Ltd. to provide a one-stop service that handles
a variety of payment methods.

stera terminal standard

stera terminal unit

stera terminal mobile

stera fasstap* EMV：Uniform standard for IC-chip embedded credit cards formulated by Visa and MasterCard.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

37

2.8.1 Global: Overseas Strategy
Leverage overseas expertise to focus on growth markets of SE Asia and India
Business Area

India & SE Asia

Japan

North America

Profit Center

Innovation
CenterInnovation
CenterGrowthCenterInvestments and Borrowers*1

StrategyCountry

Payment Processing Business
Collaborate with investee to provide local payment
services
Money Service Business
Invest/Lend to key FinTech companies
in North America and Asia
・Acquire, introduce and transfer thelatest expertise and know-how
・Strengthen relations withborrowers and investees

Payment Processing
Business
Money Service
Business

Major investees

Major borrowers

*2

*2

*2

*2

Payment
Processing
Business

Money Service
Business*1 Investment and borrowers of GMO Payment Gateway and GMO Global Payment Fund

*2
*2

*2

*2
*2

*2 Already divested and/or investment recovered.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

38

2.8.2 Global: The 20-year Track Record of Overseas Investment Strategy

Major functions shifted to India/Pacific region: Evolving into a credit
provider from a payment service provider
Major overseas investment and loan portfolio

Market expansion of SE Asia & India
8%
Penetration

BtoC EC

GMO-PG Asia location

TAM*2¥40 trn

7.3%*1

TaiwanHong Kong
India
GDP
ThailandApprox. ¥550 tr
7-8% growthPhilippines

2010

2023

Payment Service Provider

Singapore

Over ¥350 trn

BtoB EC

2030

Credit Provider

Singapore
SE Asia

Indonesia

Emergence of high-growth FinTechs

GDP
Approx. ¥500 tr
5-6% growth
Image of the increase in FinTech unicorns supported
by GMO-PG
5 companies

Over 25/Over 50 companies

・・・

・・・

*1 Calculated using final private consumption and B2C EC penetration rates for both regions*2 Figures are GMO-PG estimates using GDP forecasts for both regions and B2C/B2B EC market penetration rates for US/Japan
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

39

2.8.3 Global：Investment Strategy
Drive investment strategy in payment domain of the huge U.S.
Payment market
Aim of a minority equity stake

Our Mid-term Global Strategy

・Obtaining insights into FinTech
・Creating synergy
・Acceleratae investment in U.S. payment area

・Leverage FinTech expertise・Establishment of overseas payment business・Diversified minority-stake investment to lead tomajority-stake investment

Equity investment in Jan. 2024
Our strengths and key features:・Payment + “invoice/payment
management”
・Caters to diverse payment
methods
・ Cash payment anywhere
in USA
Market potential (TAM)
Bill payment market size ¥529 trn *1

Equity investment in Apr. 2024
Our strengths and key features:
・ Provide trade finance primarily for US-India trades
・ Digitalization/automation using AI for credit
・Cumulative loans executed: over ¥600.0 bil

Market potential (TAM)
Trade payment market ¥68 trn*2* 1 Based on PayNearMe estimate. *2 India’s total export value based as of 2022 as announced by Directorate General of Commercial Intelligence and Statistics (DGCI&S).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

40

1.

Business
Overview

p.4

2.

Focus Areas

p.21

3.

Sustainability

p.42

4.

Reference
Materials

p.49

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

41

3.1 Business Opportunities Based on Social Challenges andChanges in Environment
Converting social changes to opportunities for payment-related businesses

Social Challenges

Social Trends

Business Opportunities for GMO-PG

Depopulation

Regional
revitalization

Aging/
Low birth rate
ClimatechangeResource

AI & Data
society

depletion

Poverty

Decarbonization

Economicstagnation

Outdatedvalues &Workstylediversification
Borderless
Inbound

Sharing
Cyber security

Banking
consolidation

customs

FinancialinclusivenessDX

Telemedicine
Pandemic
Healthcare

Digital andPhysical fusion

Payment related business

Automation

Biometric
authentication

CRM

Leverage data

Self checkout

Salaryprepayment

Interpersonal
money transfer

Digital salaryPaperlessEnhancedsecurity

IoT payment

BNPL

Distance based
tolling

Microfinance

Embedded
Finance

D2C

API

OMO

Online medical
service

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

42

3.2 Materiality

Identified materiality issues to be prioritized❶ Innovation～ Social advancement and customer’s growth through creation of payment innovations～Socialcontribution
through thesustainablegrowth ofbusiness
centered on
payment

Provide a wide array of innovations centered on payment, a necessary step in many economic activities,
that support operational efficiencies such as such as invoicing, cash management and salary payment toenhance competitiveness, thereby contributing to realizing a more convenient and comfortable society
by promoting cashless adoption.

❷ Reliability～ Sustainable operation of payment infrastructure to support society ～As a company responsible for the social infrastructure of payment, contribute to safety andsecurity of socioeconomic activities by securing the stability and reliability of our own operations.

❸ Decarbonization～Contribute to the Earth’s environment through cashless adoption～
Focus on CO2 emissions reductions through the transformation of paper-based and cashbased processes❹ Human CapitalManagementfoundation to
supportsustainablegrowth～Pursue organizational capability that embraces challenge and the commitment to
25% growth ～Focus on expanding the critically important human capital base as the highest priority organizational
undertaking to achieve sustainable growth that can overcome changes in the environment❺ Governance～ Institute a sound and responsible management ～Strengthen governance structure to enhance oversight from external bodies and risktaking, in order to sustain a sound and high level of growth
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

43

3.3 Environment

Achieved zero GHG emissions (Scope 1,2) in FY2023
GHG emissions（Scope1,2）

GHG emissions (Scope3)（t-CO2）（t-CO2）

Scope2（Scope 1 is zero）

2,000

25,000

FY2023

Achieved
ZERO
Scope 1,2
emissions

1,600

1,200

Established target to reduce
Scope 3 (category 1+11)
20,000emissions from newly operating
payment terminals by

55%

per terminal in FY2030
compared to FY2021

15,000Category 1 (Purchased
goods and services)800

10,000400

Category 2 (Capital goods)：
Mainly arising from software
investments

5,000

Category 11 (Use of sold products)
Other
0

0
19/9

20/9

21/9

22/9

23/9

21/9

22/9

23/9

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

44

3.4 Social
Enhance job satisfaction, education and recruitment of good talent,
based on our belief that “company = people”
Human capital

External evaluation
Selected for “Great Place to Work Certification” forNumber of partners (left axis)

Approx. ¥25 mil

Turnover rate (right axis)

825(nos. of people）

800

the 9th consecutive time by Institute Japan’s Great
Place to Work ® survey in July 2023

(%）

20

Certified as company that childcare supporting company(known as “ platinum kurumin”)by the Director of TokyoOP per employee

Labor Bureau, Ministry of Health, Labor and Welfare in

Approx. ¥15 milJune 2024, under the Act on Advancement of Measures to

600

15

400

10

7.4

200

5

Support Raising Next-Generation Children

Certified as Health and Productivity Outstanding
Organization (Large Enterprise Category) for the 2ndconsecutive time by The Nippon Kenko Kaigi(administered by METI) in March 2024
Received highest 3-star “Eruboshi” certification as acompany promoting the empowerment of women by
the Director of Tokyo Labor Bureau, MOHLW in July 2023.
Received Silver Certificate for “excellent health company”
by Tokyo Federation of the Federation of Health InsuranceSocieties in September 2023.

0

0
19/9

20/9

21/9

22/9

23/9

Certified as Excellent Company for Health and Safety
by Tokyo Labor Bureau, MOHLW in May 2024.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

45

3.5 Strengthening Governance Structure
Realize medium- to long-term improvement in enterprise value throughstrengthening of supervisory function of the Board
Corporate Governance Organizational Structure➀ Audit and Supervisory Committee➁ Proportion of External Directors one third①②③ Special Committee
・Comprised of five Independent External Directors③

・Strengthen protection of interest of non-controllingshareholder
・Transactions and actions that entail a conflict of interest
between 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.

Man
Woman

46

3.6 Sustainability

Driving ESG management to realize a sustainable society andto enhance corporate value
Roadmap of sustainability initiatives and achievements
FY2023 Integrated Report:
https://www.gmo-pg.com/news/pdf/20240213_gmo_pg_ir_integrated_report_en.pdf

Acquired SBT
certification
Set Scope3 target

Identified materiality issues
Expanded human capital disclosure

Initiated Scope 3 engagement
TCFD disclosure

Achieved zero emissions
for Scope 1+2
Disclosure on humancapital (Annual
Securities Report)

Third party certification of GHG emissions
Initiated health management
Launched sustainability website

A－ score

Set Scope 1 & 2 targets
First issue of Integrated Report

Transitioned to company with Audit & Supervisory
Committee/Establishment of Special Committee
Compiled skill matrix
2022

2023

2024

* FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that GMO Payment Gateway, Inc. has been independently assessed according to the criteria, and has satisfied the requirements tobecome a constituent of the FTSE4Good Index Series, FTSE Blossom Japan Index and FTSE Blossom Japan Sector Relative Index.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

47

1.

Business
Overview

p.4

2.

Focus Areas

p.21

3.

Sustainability

p.42

4.

Reference
Materials

p.49

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

48

4.1 Company Outline (as of July 1, 2024)■Name
GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange Prime)■ Date of establishment

March 1995

■ Location
FUKURAS office (Head office)
SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku,
Tokyo, 150-0043 Japan
Humax Office
Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku,
Tokyo Japan■ Capital stock

13,323 million yen■ Major shareholders
GMO Internet Group Inc., Sumitomo Mitsui Banking Corporation,
Mr. Issei Ainoura, etc.
■ Auditor
Ernst & Young ShinNihon LLC■ Major consolidated subsidiaries
GMO Epsilon, Inc., GMO Payment Service, Inc.,
GMO Financial Gate, Inc.,
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), etc.

■Major Equity affiliates
SMBC GMO Payment, Inc. etc.

■Management team
Chairman & Director
President & Chief Executive Officer
Director, Executive Vice President
Director, Executive Vice President
Director
Director
Director
Director
Director
Director
External Director
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
Senior Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Director
Senior Managing Director
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
Senior Executive Officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
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
Fumio Kai
Kazutaka Yoshida
Kazuhiko Okamoto
Yumi Hokazono
Osamu Ohkawa
Shinichi Sugiyama
Tatsuya Koide
Yuichi Hisada
Takashi Mitani
Tomoyuki Murakami
Takeshi Yoshii
Katsunari Mukai
Masaru Yoshioka
Kazunari Taguchi
Kiyonobu Inayama
Shingo Ito
Yoshinori Inokuchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Junpei Kendo
Katsuyoshi Sota
Takeshi Yoshida
Yusuke Nakayama
Soichiro Fukuma

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

49

4.2 Organizational Chart
GMO Payment Gateway, Inc.
GMO-PG internalorganizations

Annual General
Shareholder’sMeeting (AGM)

Representative
Director

Internal Audit
OfficeBoard of Directors
Audit &
Supervisory
Committee

Management
Committee
Director

Corporate Value Creation Strategy
Division

Innovation Partners Division
Nomination andRemuneration
Committee

Special Committee

Risk Management
Committee

Industry Solutions DivisionCorporate Support Division

Systems Division

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

50

4.3 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.

FY2023 Revenue ¥4,967 mil, Ordinary income ¥3,035 mil. (J-GAAP)

GMO Medical Reservations Technology Co., Ltd.
Buy Now Pay Later

GMO Payment Service, Inc.

FY2023 Revenue ¥8,997 mil, Ordinary income ¥476 mil. (J-GAAP)

CP payment (TSE Growth: Security code 4051)

GMO Financial Gate, Inc.

（As of end September 2023）equity stake: 56.7%

GMO Card System, Inc.

(As of end September 2023) GMO Financial Gate, Incequity stake: 51.0％

GMO Data, Inc.
Sumitomo Mitsui Card Company, Limited

equity stake: 49.0%

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 (THAILAND) CO., LTD.

（Thailand）

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

Overseas

GMO-Z.com PAYMENT GATEWAY USA, Inc
Multiple payment service

SMBC GMO PAYMENT, Inc.

（USA）
（As of end Sep 2023) Sumitomo Mitsui Card Company
Sumitomo Mitsui Banking Corporation
GMO Payment Gateway Inc.

equity stake: 50.0%
equity stake: 10.0%
equity stake: 40.0%

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

51

4.4 Key Characteristics of Payment BusinessStable industry with high entry barriers and low churn rates
High entry barriers
Regulation(Amended ISA* etc.）

・Responding to tightening regulation 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 10)

Business scale

Payment system

・Scale is key given low ASP
・Merchant acquisition requires development capability,
sales capability and track record
・System investment of several billions of yen to maintainstable processing of vast amounts of payment data

Low churn rate
Business
Characteristics
Initiatives

・Payment is a critical operation that cannot be halted
・Sharing of personal information such as credit card information
・Involved in development from upstream level given uniqueoperations/work-flow and needs
・Concurrently provide high-demand financial services

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

52

4.5 Product Map
GMO-PG’s definition of payment: that which enables the digitalization of money flow

No Credit Risk

Cashless

DX support
platform

Ginko Pay
Processing platform
GMO Dokodemo
Cashpoint

Payment Service
PG Multi-Payment Service

SMS Choiceof Payment

GMO-PG Remittance Service

EP payment service

GMO Cashless Platform

Services thatcomplements
payment

Early Payment Service
Medical Kakumei byGMO

Payment terminals

Embedded payment solution
Not included
in transaction
value

GMO B2B Early Payment
GMO Payment After Delivery

Online advertising
service

Included intransaction
value

GMO B2B AR Guarantee
GMO B2B Pay on Credit

FinTech loans

Financial
ServiceatokaraTL（GMO-PG、GMO-EP）

Credit Risk

* TL stands for Transaction Lending
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

53

4.6 DX Support Services to Improve Clients’ PL/BS

Service line-up that can respond to the diverse clients’ needs
Customer needs & PL/BS changes
PL

Use cases
EC shop, Utility bills

Revenue

Multiple payment methods
Paperless (lower postal cost)

Cost of Sales
SG&A

CF improvement service

Personnel
Rent
Communication
BS

OP
Asset
Cash
Receivables
Provisions for
doubtful accounts
Fixed assets
Liabilities
PayablesNet Assets

Our DX support services

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)

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.

54

4.7 Revenue Structure in the Credit Card Foodchain by Player■ Image of revenue structure by player

Merchant

Sale
proceeds

100%

Payment
processing
company

Acquirer

IssuerInternational
brand

Merchant
discount rate Spread revenue
Around

3.0% 0.3~0.5% 0.5
~0.7%

1.5
~1.8%

0.1%
*Compiled by GMO-PG by referring Ministry of Economy, Trade and Industry’s “Review of 4th Discussions, Analysis on Interchange Fee and Initiatives towards achieving paperless operations” (Note: this is an English
translation of Japanese title and not the formal title of the original)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

55

4.8.1 Business Outline of Payment Processing Company (1)Problems with online credit card payment in the early days of E-Commerce

Consumer

Merchant①Order taking③Make sales report to eachcredit card company（sales processing）

Network④Post mail sales
report to eachcreditcard company

ク
レ
ジ
ッ
ト
カ
ー
ド
会
社

Credit Card Company

Large volume of sales slips②Enter each
into theCAT terminal

Payment
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.

56

4.8.2 Business Outline of Payment Processing Company (1)Payment processing service realizes operational efficiency in credit card payment operations

Consumer

Merchants

Payment
Processing
Company①Order taking

Payment
company

Credit・sales
Network

Real-time credit decision
Transmit
sales data

②Check whether
payment has been
received(data collation)

Sales processing

Payment

Credit Card Company

Updatecard data

In the early days of Ecommerce, credit card payment was processed CP
between the merchant 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.

57