Integrated
Report28th Fiscal Year
2020.10.1–2021.9.30

Global leadership

Payment with Innovation

A company that presents new value
to the world and leads Japan with
its high aspirations

Business model
Philosophy

By contributing to society, we pursue
both spiritual and material prosperity
for our partners.

A company with outstanding potential
and a 30-year growth trajectory that is
highly acclaimed by global investors

We contribute to the progress of our society with a strong intention to create and develop
markets, and with transparency in expanding businesses.
We define our partners as a group of people whom we can trust. This group includes our
employees, customers and business partners.
Our employees possess richness of spirit, advanced problem-solving abilities, and a highlevel of professionalism. They always pursue richness of spirit when they exchange values
with our customers.

Ownership model
A company that achieves exceptional
growth through delegating andinstilling a sense of ownership in
our younger partners to seek
new challenges

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

01

Introduction

Message from the President

With regard to capital policy, shareholders’ equity

increased from the full conversion to common stock of
the Euro Yen Convertible Bond with Stock Acquisition
Rights issued in 2018, in June 2021, two years aheadof schedule. A new bond was issued under a similar

scheme at the same time to procure funds for future

growth from expansion of the Money Service Businessand executing on M&A strategy.

We express our deepest gratitude for the warm

support extended to us by stakeholders that enabledthese achievements.

The consolidated companies (“the Company”)
compete for growth across many businesses
centering on payment

The Company established a “feedback loop model”

Issei Ainoura

wherein the services in financial-related services andpayment enhancement services provided to increase

President andChief Executive Officer

pany based on their respective business environments.

I strongly acknowledge that my mission is to achieve

the merchant’s revenues then circles back to contributea continuous 25% growth as a whole, by accelerating

In recent years, several major companies within thetaining cohesion, while also securing the self-sufficiency

to increase revenue of the payment processing service.

Supporting Social Innovation Beginning with Payment

and flexible business operations of each group com-

Company have grown solidly to help realize stable management and business performance through the soundCreating long-term value for stakeholders by achieving
sustainable growth in response to accelerating changes
in society

business growth through increasing synergy and mainand independence of each company’s operations.

GMO-PG consolidated companies

Omni-channel* strategy

16 consecutive terms of growthsince listing in 2005

Both the online and offline domains of the payment

Coverage of diverse client baseIn financial-related services, Early Payment Service

processing business trended strongly in FY2021, driven

grew steadily as it supports cash flow improvement atwell as the expansion in transaction volume and value,credit risks, appropriate response was taken againstby new service launches to global major companies asacquisition of new merchants, and revenue growth ofexisting merchants.

merchants. However, for those services which entail
rising credit risks.

As a result of the above, we recorded 16 consecu-

tive years of revenue and profit growth since listing on
the TSE Mothers market in 2005.

02

GMO Payment Gateway, Inc.

Expanding the methods of payments available
Sharing of the client base

Sharing of management principle and corporate culture,and group-wide resource allocation across GMO-PG ʼ s consolidated companies
Definition of terms used in this Integrated Report“The Company” refers to GMO-PG consolidated companies that consist of GMO-PG and the following three consolidated subsidiaries and affiliates accounted for by
the equity method.
GMO-PG refers to GMO Payment Gateway, Inc. GMO-EP refers to GMO Epsilon, Inc. GMO-PS refers to GMO Payment Service, Inc.
GMO-FG refers to GMO Financial Gate, Inc.
* Integration of offline and online

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

03

Introduction

Message from the President

Expand business by deploying services tailored for the specific characteristics of each industry

DX Support Platform
Cashless
Financial services
Payment services

RetailIndustry

DigitalService

Food

Healthcare
andPharmaceuticals

Telecommunication

Strive for sustainable growth bytaking opportunity of the social changes

ElectricPower

Gas Utility

Financial
Services

Electronics
andAutomotive

Create a company with the power to attract talent,
strengthen the organization by fostering talent

The COVID-19 pandemic has not only caused the accel-

The Company emphasizes the well-used phrase oftechnology (digital transformation: DX) but has also

else.

eration of social and corporate reforms utilizing digitalallowed e-commerce (EC) usage and cashless payment“people determine the company” more than anyone
Based on the belief that the source of sustainable

to take root in daily life. This has led to new businessgrowth lies in the employees and the organizational

the Company changes at an unprecedented speed.

to employees as partners to express respect to fellow

opportunities as the business environment surrounding
In recent years, the Company is expanding the plat-form business that provides applications for business

operations specific to each industry, by leveraging ourdevelopment capability, support capability, and sales
and marketing capability based on our deep under-

standing of client needs garnered through the diverse
offerings in financial and payment services.

04

Real Estate

GMO Payment Gateway, Inc.

power, myself and all the partners (the Company refers
employees) share the future vision of the business andCompany, mindset and activities and, work together
towards making a company in which we take pride,

which in turn strengthens the organization to produce
new innovations.

I am convinced that striving to be a company thatnaturally attracts talent is the way to realize sustainablegrowth.

Initiatives on sustainability

There is a growing requirement on companies to under-

Furthermore, the Company strives to achieve oper-

take initiatives toward realizing a sustainable society,ating profit target of ¥25 bn in 2025 and ¥100 bn inoperates services that contribute to decarbonization

payment.

beginning with environmental issues. The Company

and inherently reduce the environmental burden, by

supporting digitalization of economic activities such as
through paperless, cashless, and online migration ofcommercial transactions. The Company is committed

2030 through the expansion of businesses originating in

We would like to express our sincerest gratitude forthe continued support of our stakeholders.

to contributing to the advancement, development, andrealization of a sustainable society by being aware of

our strong relationship with the community, society, andearth itself through our stakeholders. Going forward,

the Company will strengthen the SDG initiatives such as
the use of de facto renewable energy for electric powerusage at data centers.

December 2021
President and Chief Executive Officer

Issei Ainoura

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

05

Value Creation Model

Value Creation ModelManagement Principle

Value Creation

Pursue both material and spiritual prosperity through ourcontributions to the progress and development of society.

Operating Stores

123,938

stores*
As of end-September 2021

Shareholders

Business
Environment
P.10–11

Transaction Volume

Strengths
P.12–13
Sales and Marketing
Continually enhancing ourability to negotiate andmake proposals since ourearly years. Supporting ourclients’ growth with our
unparalleled humanresource base.

C ashless adoption
Online migration
 hange inCconsumption
behavior andpurchasing methods
Digitaltransformation (DX)Advances in AI/IoT
technology
C OVID-19 pandemicR esponse to climatechangeSystems Development
Building a reliable system toprocess high-volume concentrated transactions.
Systems development
capabilities that cater toeach customer’s needs.

Client Support

P.14–15

DigitalContent

Education

Public Utility

EnergyRetail/Distribution

Manufacturing

ApparelPayment
Processing
Business

Water Utility

Taxes

Transaction Value

Operating Profit

12.9 bn¥

CASHLESS

IoT

Customers’
growthFY2021

8.0 trFinTechMoney Service
Business

3.54 bn transactions

Approx. ¥FY2021

Merchants

Payment Enhancement
Business

Payment
providers/Business
partners

FY2021

Revenue and profit increase

16 consecutive terms since listing

Partners(Employees)

GLOBAL
Value-added services that
contribute to the mainline business

Mainline business

Consumers

E-COMMERCE

Increase in payment
processing
Payment
processing

Approx.

Finance

Ecosystem that continuously expands from thefeedback loop between value-added services andthe mainline business

Local
government

Sustainable Management

Investment

GMO Payment Gateway, Inc.

Healthcare
and Welfare

PublishingGlobalization

06

P.20–29

Provide the payment infrastructure – an indispensable part ofcommercial transactions – to various industries

Our client-focused support
system attempts to solve theunderlying, latent issues.

Ability to uncover promising start-ups.
Comprehensive support
that contributes to thegrowth of our investees.

Focus Areas

Business Model

Community
and society

P.30–39

DigitalInclusion

Financial
Inclusion

Contribution
to theEnvironment

Contribution to
Human Capital

Practice ofSoundManagement* The number of operating stores would be311,477 stores is adjusted for a particular casefor the same period.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

07

Value Creation Model¥100 bn

Track Record of Value Creation(target)The Company started its businessspecializing in credit card payment from100

¥25 bnwhich the business expanded by making
inroads in the five focus areas currently.

(target)2021 
I mpact Finance provided

The Company is committed to creating new

GLOBALvalue and to achieving the management25

to a financial inclusion
FinTech company

2018 
Overseas Lending

2012 
Deploys overseas businesstarget of operating profit of ¥25 bn in 2025
and ¥100 bn in 2030.

2019 
Jointly develops next generation payment platform

IoT“stera” with Sumitomo Mitsui Card Co. Ltd and Visa
Worldwide Japan Co. Ltd.

2010

Commences offline
payment processing

20

Enters into the Unattended Market (UM)CASHLESS

2019 
GMO Cashless Platform2017 
GMO-PG Processing Platform

15

2019 
Enterprise-version Pay

2021 
Commences collaboration with JFR Card Co. Ltd.

2017 
Launches Ginko Pay Base System

2021 
2021
Instant Salary byGMO
2018 
Launched B2B financial-related service
2015 
Remittance Service

102014 
Transaction Lending

FinTechOperating Profit (Billions of yen)2013 
GMO Payment After Delivery

2008 
Early Payment Service

E-COMMERCE

2005/92006/92020 
2020
Commenced SMS Choice of Payment to

From merchandise to non-merchandise
Expanded into domains of services, digital content,
subscriptions, etc.

taxes, and utility payment service

5

TEPCO Energy Partner, Inc.

2008 
PG Multi-Payment Service

ment processing business

1995

2015 
Expanded function of Early Payment Service

2007 
Launched public dues,

1995 
Specialized in credit card pay-2020 
2020
Condo Pay, GMO B2B Pay On Credit

2007/92008/92009/92010/92011/92012/92013/92014/92015/92016/92017/92018/92019/9

Value Proposition to Society and Our Role

2020/92021/92025/92030/90

Support of conversion to carbon-neutral society

DX Support
EC and online migration support

Globalevents1997

Consumption tax raised
to 5% from 3%

2008

Lehman Shock

2011

2014

2019

Consumption tax raised
to 8% from 5%

Great East Japan
Earthquake

2020

Consump- COVID-19 pandemic
tion tax
raised to
10% from 8%

History
1995 Established Card Call Service, predecessor of the Company

2010 GMO Financial Gate joins the group

2000 Mr. Issei Ainoura appointed President
2004 Joins GMO Internet group; integrates with Payment One

2013 Established GMO Payment Service

2005 Company name changed to GMO Payment Gateway/Lists on TSE Mothers market/GMO Epsilon joins the group2008 Listing transferred to TSE First Section

08

GMO Payment Gateway, Inc.

2018 GMO Medical Reservations Technology joins the group/Established U.S. office2012 Established Asia regional headquarters in Singapore

2020 GMO Financial Gate lists on TSE Mothers market
2021 BUFFORT joins the group2015 Established joint venture company SMBC GMO Payment, Inc.
2016 Southeast Asian major payment company 2C2P Pte. Ltd becomes an equity method affiliate

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

09

Value Creation Model

Business Environment
Business Expands along with the Advancement of Japan’s Cashless Adoption

B2B

Pursue sustainable growth by expanding business from the acceleratingsocial changes(inter-company transactions)￥19.3 tr market size
EC penetration rate 8.1%

6.2%

Merchandise

Enormous market

CAGR¥1,000 tr

Progress of EC/Cashless Adoption in JapanEC penetration rate (%)

connectivity and government policy. Even so, the current EC penetration and cashless penetration levels lags the U.S./

Offline payment

European countries, signifying significant potential to expand in the medium-to-long term.
The COVID-19 circumstances have caused irreversible changes in the sales and marketing activities of business operatorsand consumer’s lifestyle and consumption behavior, where the nesting demand (i.e., online consumption) for items such as
food, beverage, and daily necessities appears to have taken root.
The Company intends to capture the opportunities arising from the continuous transformations expected in commercial
activities such as omni-channel adoption, implementation of cashless payment, and digitalization of services (online
migration).
J apan’s Cashless Market and Cashless Penetration(as a ratio to private final consumption expenditure)(Unit: Trillions of yen)

9.8%

CAGR

8.1

Flea market
app

2025
14

19.3

Public dues and taxes

Service/CommerceSubscription
Omni-channel• National taxes ¥61 tr

Credit card payment

2020

Market size (¥ tr)• Local taxes ¥38 tr

Japan’s EC market and cashless payment market continues to show high growth supported by deployment of internet(Unit: %)C2C(Transactions between consumers)

Narrowly defined B2C: EC market

Online payment

 omparison of EC Penetration in Japan and U.S./
C
European Developed Countries

B2C

Transactions between individuals(general consumers) and corporations

40

Expansion phase¥1.75 tr
Sharing
economyBroader EC
Private final consumption expenditure¥300 tr

Free market* References: METI “FY2020 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commercemarket survey).” Figures for 2025 are Company estimates.
MIAC “Breakdown of national tax and local tax revenue (FY2020 Budget and Local Government Finance Plan)”
THE WORLD BANK ”Household final consumption expenditure (current USD)”
Payments Japan Association’s “Cashless Roadmap 2019” and Yano Research Institute’s “Online Payment/Settlement Service Providers 2018”

Cashless Promotion by the Government(Unit: %)The Japanese government has set the goal of reaching 40% of cashless penetration by 2025
and to achieve highest levels globally of 80% in the future. Promoting the adoption of cash-

27.9

30

90
24.1

20

60
13.9

13.6
8.1

10

17.1

18.4

20.1

26.9

29.7

less payment is a key initiative for Japan’s economic growth. To this end, the development30

of cashless payment environment and the review of the payment infrastructure is under byenacting laws and deregulation. The Company will contribute to the progress and advancement of Japanese society by expanding services that contribute to the advancement of the

21.3

30

20

payment infrastructure.

10

Acceleration of DX
Companies are increasing their IT investments to transform operations by adopting the latest digital technology, reflecting the0

08 09 10 11 12 13 14 15 16 17 18 19 20
U.K.

U.S.

Japan

*M
 ETI “FY2020 Global Survey Project Concerning Integrated Domestic
and External Economic Growth Strategy Building (E-Commerce market
survey)”U.S. Bureau of the Census “The 2nd Quarter 2021 Retail E-Commerce
Sales Report”
U.K. Office for National Statistics “Retail Sales Index internet sales,
October 2021”

0

13

14

15

16

17

18

19

20

0

 ashless penetration ratioC
Credit card usage amount
Debit card usage amountE-money usage amount
QR-code payment usage amount* Cashless penetration = Sum of credit card usage amount, debit card
usage amount, e-money usage amount, and QR-code payment usage
amount divided by private final consumption expenditure* Cabinet Office, “System of National Accounts”
Japan Consumer Credit Association’s Credit Statistics of Japan
Bank of Japan’s Payment and Settlement Statistics
Payments Japan Association’s Code Payment Statistics

need for business growth and productivity improvements. Such transformations are accelerating in various sectors including
the government itself promoting the digitalization of the government administration. As a company involved in DX support in
the payment domain, we seek to create business opportunities on the back of such transformations.

Response to Climate Change
There is a growing requirement on companies to undertake initiatives to reduce the environmental burden as climate change
issues become increasingly serious. The Company expects significant business opportunities to arise from the conversion to a
decarbonized society, by providing payment services that have a low environmental footprint and infrastructure that supports
the digitalization of payment and invoice operations. Additionally, implementing de facto renewable energy for electric powerusage at data centers will be implemented in order to reduce the environmental burden of our business activities.

10

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

11Value Creation Model

Our Four Strengths
The Company is further enhancing these four areas of strength, that drives our differentiation with competitors and the commitment to achieve 25% growth.

01

Sales andmarketingcapability

Our outstanding human resources enables an industry-based sales andmarketing structure in order to propose industry-specific solutions that
address the specific issues and trends of each industry. In addition, we
continue to provide support to our customers (i.e. merchants) as theirpartner even after the start of the service.
Based on this customer understanding and trust-based relationship,
we establish a win-win relationship with the leading companies’ of eachindustry by developing strategic initiatives to expand new payment
platforms together.

03

Client support
capability

The Company internalizes its customer support and continuously
endeavors to improve services that contribute to resolving the issues
faced by customers. This contributes to customer’s growth by providing
value from the cohesive collaboration between sales, development, andsupport. Thanks to this, the customer support’s response to clients havereceived high acclaim from external rating agencies.
In addition, the organic involvement of professionals in finance andaccounting, legal affairs, and human resources further enhances thisstrength and enables business to expand while ensuring security andcompliance as a listed company.

Customers in a Wide Range of Industries and Formats
Support Organization
DigitalContent

Education

Public Utility

EnergyRetail/Distribution

Publishing

Manufacturing

ApparelSales Personnel
Approx.

40 persons

As of end-September 2011

Healthcare
and Welfare

Approx.

AwardsThe only company in thepayment processing
industry to be consecutively awarded the 5-starrecognition by HDI.

Finance

Water Utility

Sales andmarketing

Taxes

Customer

200 persons

Systemdevelopment

SupportAs of end-September 2021

Contribute to customer’s growthfrom proposal to operation

02

Systems
development
capability

The internalizing of high precision system development and operation isa factor that supports sustainable growth. In order to be able to continually provide systems with high levels of quality, capacity, availability,
security, and functions, the Systems Division responds to the changing
market needs by detecting industry and technology trends early on. As
customer demands have become more advanced in recent years, theCompany increasingly provides applications required for operational
reforms, which entail involvement from the system development stage.
In April 2021, BUFFORT Inc., a company with strong system develop-

ment capability in financial and payment domains, joined the group. This
will further strengthen the Company’s system development capability by
expanding the talent base of system developers.

04

Investment
capability

The Company seeks out outstanding FinTech start-ups in the world that
could transform society through new technology and/or concept andsupports their growth through strategic investments and business alliances. In addition, such relationships also help the creation of new services and evolution of current services at the Company itself.
Furthermore, the Company invests in the top payment operators
throughout the ASEAN countries with the aim to build a partnership andsupport their growth in order to develop the overseas payment business.
Overseas Investees and Offices
GMO-PG overseas offices

Number of Engineers
Approx.

30 persons

As of end-September 2011

Approx.

200 persons

As of end-September 2021

Major System Development Milestones
2014 

2017 

Commences development, operation,and maintenance of Visa Business Pay,an exclusively B2B payment system
Development of new smartphone-based
payment service app

Launch of GMO-PG Processing Platform
for financial institutions

2016 

Investees of GMO-PG and GMO Global
Payment Fund

Hong Kong

India

Thailand
Vietnam
Malaysia

TaiwanU.S.

 UM of GMO
A
Global Payment
Fund
Nearly 4.2x

Singapore
Indonesia

InitialMarket value as
investmentof end ofamountSeptember
2021

2020 
Launch of SMS Choice of Payment to
TEPCO Energy Partner Inc.

Joint development of Ginko Pay with The
Bank of Yokohama Ltd.

12

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

13

Value Creation Model

Major Business/Business Portfolio
Major BusinessBusiness Portfolio
The Company has expanded its business by providing various services across several of GMO-PG’s consolidated companies

Payment Processing Businessto customers in many industries through the three business segments of Payment Processing Business, Money Service
Business, and Payment Enhancement Business. Strengthening each company within GMO-PG and its consolidated companies

Provision of comprehensive payment system to merchants to enable

creates a solid business foundation.

consumers to use various payment methods such as credit cards and
Buy Now Pay Later (BNPL)

Product MapExpanding the product offerings of the GMO-PG consolidated companies(from payment service, financial services to DX support)Structure of Payment Processing ServiceConsumer

Merchant
Online payment:

Payment Company (Payment method provider)

Payment Processing Company

123,938 storesOver 40 credit cardcompanies

Online Payment

Offline payment: 130,227 terminals
As of end-September 2021

Order received

Account transfer

Credit check/Revenue

NetworkUpdate credit card
information

Revenue processing

E-money
BNPL

Multi-currency
Pre-paid

Debit purchase amount entralized management and bulk
C
implementation of various payment
methods
Rollout online and delivery sales
Revenue increase and greater focus
on main businessReduction of work burden and cost of
payment/invoice operations

Implement advanced payment system
Outsource system development andoperation
Eliminate and prevent fraudulent
transactions
Shortening deposit lead time

Payment Service
Services thatcomplement payment

PG Multi-Payment Service
EP Payment Service

SMS Choiceof Payment

2020年9月2日更新

Online advertising
service

GMO Cashless Platform

GMO-PG Remittance Service
Early Payment Service

Payment terminals

ID-based payment

Deposit the purchase amountInvoice the purchase amount se of varied paymentUmethods and cashless
payment
Safe and seamless
transaction
Choice of timingof payment

GMO Dokodemo Cashpoint

QR-code(Data matching)

Merchant

GMO-PG Processing Platform

Bank transfer

Confirmation of deposit data

No credit risk

Ginko Pay base system

Carrier billing

Offline Payment

Transmit revenue data

Consumer

Cashless/
DX Support Platform

CVS payment

Embedded payment solutions

Not included intransaction value

Included intransaction value

GMO B2B Early Payment

Payment company

GMO B2B AR Guarantee

 cquires multiple merchants andApayment transactions
Outsourcing of operations

GMO B2B Payment Guarantee
Overseas Lending

Financial Service

Transaction Lending
Credit risk

Money Service Business andPayment Enhancement Business

The Company and its Major Consolidated Subsidiaries (FY2021)

Provision of payment enhancement services and financial-related services

Company Namethat contribute to expanding payment function and merchant growthList of Major Services in Financial-Related Services and Payment Enhancement Services
Service Name

Service
Content

14

 MO Payment AfterG
Delivery/GMO B2B
Pay On Credit

Remittance Service

Deposit the sales
proceeds before
payment by purchaser

Realize efficient andsecure remittance andrefund processing

GMO Payment Gateway, Inc.

 verseas Lending/O
Transaction Lending
Lending of growth
funds

Early Payment Service

Cashflow improvement
and early payment
dateOnline AdvertisingService
Analysis and online
advertisement
operation to improve
revenues as merchants(Non-consolidated)(Non-consolidated)(Non-consolidated)(Consolidated)

Major Business

Online payment processing
business

Online payment processing
business

Buy Now Pay Later business

Offline payment processing
business

Customers

Local government, Large tomedium-sized companies(merchandise andnon-merchandise)

Small operators(mainly merchandise)

Merchandise andnon-merchandise operators,
consumers

Offline stores, unattended
machine operators

Revenue(¥ mil)Net Profit(¥ mil)Total Assets(¥ mil)22,743

4,824

6,680

7,089

6,860

1,872

694

411

154,264

26,917

29,696

7,136

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

15

Value Creation Model

Our Services and Focus Areas
Payments of fixedmonthly expenses
Regular payments forwater delivery, newspapers,
magazines, etc.

The Company’s Activities in the Five Focus Areas
Utilities
Bills paid on a regularbasis such as electricity
and gas

E-COMMERCE

FinTech

CASHLESS

Providing all types of highly con-

For merchants, we develop pay-

Expanding our service offerings totechnology and services that sup-operators to respond to the accel-venient, secure payment methods,

Usage fees for various
services
Payments for travel tickets
and car rentals, etc.

Content sales
Payment for content purchases, such as e-books,
games, and video streaming

ment methods that utilize financial

financial institutions and businessport growth according to theireration in the adoption of cashlessfunding needs

payment

Shopping by smartphone

Providing payment services

Payment after receiving products

Payments at offline stores

Payment services for purchasing
goods and services outside(GMO Payment After Delivery)

services and purchasesfrom internet shopping to online

payments of taxes and public dues

Services used indaily life/at home

DeliveryTake-out and delivery
arising from nesting
consumption

Public dues
Payment of national
taxes, automobile
taxes, andhometown tax

Using smartphone apps to pay forthe home

GMO Payment Gateway
creates new value inpayments with our sights

IoT

GLOBAL

Provide highly secure services to the

Globally exporting our expertise,

expanding from the adoption of cash-

and finance, while actively promoting

offline payment market that is rapidly

set firmly on the future,less and contactless payment as well

adapting to a world whereas the growth of the Unattended

change happens fasterknow-how, and services in payments

partner strategies through investment

Marketthan ever before.

Services used­outside the home

Cashless
Payments that do not use
cash in offline storesSelf-checkout
Services contributing tounmanned or labor-saving
at offline stores

16

GMO Payment Gateway, Inc.

Cashless payment at self-checkout
registers

Sustaining global payment
infrastructure

Embedded solution that enables

Offer safe and convenient payment

unmanned or labor-saving operations

services primarily in Asia
Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

17Value Creation Model

GMO Payment Gateway at a Glance
Our business is comprised of three reportable segments
separated by service type. We identify the following five
focus areas to be the growth drivers of our business.

Payment Processing
Business

Money Service
Business

Payment Enhancement
Business

Revenue Breakdown

This business focuses on expanding usage of services by large

This segment’s revenue growth rates slowed due to taking a

Demand for Medical Kakumei byGMO service, a reservation

Payment Enhancement Businessmerchant acquisitions, given the backdrop of a steadily expand-

COVID-19 effects for GMO Payment After Delivery service, which

reception counters offered exclusively to medical institutions

and small-to-medium merchants and non-EC operators and¥0.7 bn

2%

Payment Processing
Business¥30.8 bn

74%

Money Service
Business¥10.1 bn

FY2021

24%

Revenue

41.6 bn¥ing EC market. The impact from the COVID-19 pandemic is limited, and micropayment transactions increased from the rising

adoption of cashless payment and expanding EC market as wellas increased payment transactions for household goods, digitalcontent, public utilities, and taxes caused by nesting demand thatconservative stance on extending credit in consideration ofentails credit risk, as well as the hard comps against the same
period of the previous year that saw strong nesting demand.

As a result, credit-related costs were controlled which contributed to an increase in segment profit.

On the other hand, Early Payment Service revenue trended

resulted in increased transaction volume and value.

strongly on the back of growth in the Payment Processing

generation payment platform “stera” trended strongly.

progress in securing new potential customers that can generate

In the offline field, sales of payment terminal for the next

Additionally, steady progress was made in receiving orders fromthe focus market of Unattended Market (UM), such as automatedpayment machines and ticket machines.

Revenue/Segment Profit

Business segment. Lending service to overseas operators madeby our consolidated subsidiary GMO Medical Reservations

Technology Co. Ltd., increased on the back of COVID-19, con-tributing to the growth in segment revenue. However, in light of

the recent business operation and the divergence from plans, animpairment loss was recognized.

The SSL coupon and delivery service revenue declined dueto the decline in transactions.

stable revenue going forward and contributed to increasing

segment revenue. Additionally, the new service of Instant Salary
byGMO was launched during this fiscal year.

Revenue/Segment Profit(Millions of yen)management system to enable operational efficiency at the

Revenue/Segment Profit (Loss)*(Millions of yen)

30,812(Millions of yen)

10,151

9,416

717

602

23,037
14,424

11,581
FY2020Focus Areas

Revenue

1,799

FY2021

Segment Profit

FY2020
Revenue

FY2021

Segment Profit

FY2020
Revenue

Online Payment

E-COMMERCE

77

2,093

Segment Profit (Loss)

Online Advertising Service    Pay-as-you-go/non-recurring payments(payment for merchandise/goods, digital content, etc.)

SSL Service(106)

FY2021

Medical Kakumei byGMO

Delivery Service    Recurring payments (payment for public taxes and dues, etc.)
GMO Payment After Delivery/GMO B2B Pay On Credit
Remittance Service

FinTech
CASHLESSEarly Payment Service

GMO B2B Early Payment, etc.

Transaction Lending

Instant Salary byGMO

Ginko Pay

GMO-PG Processing Platform

GMO Cashless Platform

IoT

Offline Payment

GLOBALZ.com Payment (overseas payment service)Global Lending*D ue to the deconsolidation of Macro Kiosk Berhad in FY2020, its business has been reclassified as a discontinued operation. As a result, the figures for revenue andoperating profit only represent the amounts for continuing operations and exclude the discontinued operation.

18

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

19

Business Strategy

Focus Area

E-COMMERCE

Business Environment and Growth Strategy
Given this business environment, the Company’s growth

Broader EC Market TAM (Total Addressable Market)*1
2020¥19.2 tr*2025

2

strategies are:¥45 tr*2• Make inroads to financial institutions and large andhigh growth potential merchants in Japan and overseas

The B2C EC market (e-commerce transaction to consumer• Win large scale projects that entail system development

amounted to ¥19.2 tr. in 2020*2), which is at the center of• Expand the DX support platformthe broader EC domain, continues to grow very rapidly,• Early monetization of new services, etc.

helped by favorable externalities such as the increased

The growth strategy of GMO Epsilon, which addresses thepenetration of smartphones and logistic/distribution industry reforms. Solid progress is also made in areas not includedin the B2B EC statistics, such as service commerce domain,
public dues and taxes, medical expenses, and other sectors

Hokuto Kuramoto
General Manager
Product Development Office
GMO Epsilon, Inc.

Key Person Interviews with Partners

SME sector*3 is:• Strengthen group synergy with GMO Internet group• Make inroads into new businesses

closely tied to daily life. Furthermore, the B2B EC market• Improve UI and UX/Commence new payment rates(business-to-business e-commerce transactions between

The above strategies aim to achieve above-market growth rates.

companies amounted to ¥1,000 tr in 2020*2) also holds*1 TAM:Total Addressable Market*2 METI “FY2020 Global Survey Project Concerning Integrated Domestic
and External Economic Growth Strategy Building (E-Commerce market
survey)”*3 SME stands for small and medium-sized enterprises.

significant business potential and the combined TAM ofthese three domains in which the Company focuses on is
expected to reach ¥45 tr in 2025.

VisionContribute to the growth and success of the customer as an innovation partner throughOperating Stores
End of FY2004

offering solutions that cater to the diverse needs of customers across many industries

End of FY2020*1

Q1. What value do you contribute to customers?
I endeavor to contribute to the success and growth of theQ2. What personal achievement do you want torealize at the Company?

customer by providing the perfect solution to the customer.

There is a mantra in the Company that “Sameness is to

To use an analogy, customers may want to take their timewither away,” so I always strive to continuously transformand order a tailor-made suit or chose a ready-made suit formyself and continue to learn without resting on past suc-convenience. Our strength is that we can make a proposal

cesses. The Company’s business is where changes appear

that focuses on the value most emphasized by the client atmuch earlier through the voices of customers or the con-any stage, ranging from easy-to-implement design for start-

sumption behaviors visible through payment, even before

ups to comprehensive payment and financial solutions that

it appears in the world as technological change, social value

require large scale system development.

change, or regulatory change. My personal achievement is
to keep bringing a sense of awe and smiles to all those I
interact with and feel excitement at the changes happening.

6,837

Transaction Volume

123,938

PrintedBooks

Fresh Food

E-books

Tickets

Games &Music

Automobile
Taxes

ApparelCDs

Water
Utility

Taxes

FY2004FY2021

Approx.

Transaction Value

37 mil

FY2004¥120.0 bn

FY2021

3.54 bn

8.0 trApprox. ¥* The number of operating stores would be311,477 stores if adjusted for a particularcase for the same period.

TO PIC he Advantages of Comprehensive Online Payment Service
T“PG Multi-Payment Service”• Improve consumer convenience on EC websites by bulk

implementation of various payment methods• Reduce burden of managing cash inflow/outflow by unify-

ing the deadline and deposit dates of various payment
services by integrating contracts• Efficient operation is made possible by centralized man-agement of multiple function and payment methods• Mitigate risks of information leakage by storing credit card

information at the Company rather than at the merchantInvigorate Japan’s EC
Market together with
Merchants and Partners

Acquire diverse merchants through strategy based on scale andtype of merchants
Local government
Some large
enterprises
Large tomedium-sizedenterprises
Small operators(EC operators)

No. ofstores20

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

21

Business Strategy

Focus Area

FinTechBusiness Environment and Growth Strategy
Given this business environment, the growth strategies are:FinTech Market TAM• Asset shift toward high profitability services• Buy Now Pay Later2020¥0.8 tr*1

2025•C reation of new services (expansion of services from B2C¥3 tr*1

to B2B)• Partner
strategy with financial institutions and operators in• Early Payment Service/Transaction Lending2020¥2.5 tr*22025

each sectors¥8 tr*2

These strategies will contribute to our customer’s growth.

In the FinTech domain, services provided mainly to EC operators include Early Payment to help improve cash flow, refund
service, global lending services to companies,

Ryoji Koinuma

GMO B2B Early Payment, as well as FinTech services such as

Manager
Corporate Planning Group
Corporate Planning/New
Business Creation Department
Corporate Value Creation
Strategy Division

Instant Salary byGMO, which is an instant salary prepayment
Key Person Interviews with Partners

service for companies, and the payment service GMO
Payment After Delivery. In particular, the TAM for the Buy Now
Pay Later (BNPL) market is expected to expand from ¥882 bn
in 2020 to ¥2 tr in 2023, and further to ¥3 tr in 2025* .
1vate placement, and ¥17.5 bn through the issue of Euro Yen
Convertible Bond with Stock Acquisition Rights.
In addition, approximately ¥21 bn of funds were procured from a Euro Yen Convertible Bond with Stock
Acquisition Rights maturing in 2026. The use of proceeds
will be for sustainable growth through investments, M&A
strategy execution in the payment and FinTech domains, andbusiness expansion into the FinTech domain. We aim for
FinTech business through the effective use of the proceeds.

Aim to further improve profitability and capital efficiency through deploying the funds

procured for business expansion and the expansion of financial-related services that alignwith the new social demands

Instant Salary byGMO is a salary prepayment service, which

domain, the Company raised ¥8 bn in 2015 through a pri-further improvement in capital efficiency and growth of the

VisionQ1. What value do you contribute to customers?

For the purpose of expanding business in the FinTech

Q2. What personal achievement do you want torealize at the Company?

means that users can make sudden expenditures without

What is most important to me is to respond to changes.

having to wait until the salary payment date. This service

The changes happening in the world underlies the needalso caters to the rising need for new payment methods

for salary prepayment service.

with the increase of freelancers and side-job holders. This

This is especially true in the financial and payment

service is also helpful for employers to provide employee

domains that have undergone significant changes in recent

benefits for workers and employees. We will continue toyears. It would not be possible to provide services that sat-provide value that aligns with the changes underway by

isfy clients unless I myself change the way I think and act in

capturing the ever-changing needs of customers.

line with the changes taking place at customers and in themarket. It goes without saying the basics of honoring manners and showing gratitude to those around you are important, but at the same time, the readiness to fearlessly
change as needed is how I myself can continue to grow andbe a person that customers and fellow colleagues enjoy*1 Yano Research Institute Ltd., “Online Payment/Settlement Service Providers 2021”; the figure for 2020 is an estimate, the figure for 2023 is a forecast, andthe figure for 2025 is based on the Company’s forecast.
*2 The TAM for Early Payment Service and Transaction Lending is calculated from the online payment transaction value that is under the Representative
Contract. The figures for 2025 is the Company’s forecast.

TO PIC ervice Commences for Instant Salary byGMO,S
an Instant Salary Prepayment Service for Companies
The Company has launched the instant salary prepayment
service Instant Salary byGMO by combining the Company’s
expertise in payment and remittance to the “Sokkyu” asset
which is a salary prepayment outsourcing service provided
by Sakura Information System Co. Ltd. of the Sumitomo
Mitsui Banking Corporation group since 2007.
Digitalizing the salary operation and payment processes
at companies to reduce man-hours should help in creating
the optimal system for the payers and receivers of salary,
thereby helping to realize financial inclusion and expand
our business in the ¥220 tr salary bank deposit market.

Market Size of Direct Deposit of SalaryTAM ¥220 tr

Instant Salary byGMO

A service to receive salary immediately for the work already completed,
before the payday
Major industries: Logistics/Transportation, Delivery, Relocation
Major types of employment contracts of service users:
Temporary employees, part time, etc.

working together with.

22

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

23

Business Strategy

Focus Area

CASHLESSBusiness Environment and Growth Strategy
The Company’s TAM is estimated at ¥2 tr, which is the IT

strategies are:focus on the cashless domain, or specifically the BaaS• Further expand the platform service to financial institutions(Banking as a Service) domain, such as issuing/acquiring• Diversify services and rollout to business operators

services including Ginko Pay, which was co-developed with

• Expand services within the industry including to major

The Bank of Yokohama Ltd., and applications needed topromote DX and cashless business of financial institutions
and financial service providers.

Key Person Interviews with Partners

financial institutions and financial service providers to rollout issuing*1 and acquiring business*2 for credit cards

Visionas a one-stop payment solution by leveraging the trackrecord and know-how garnered in payment services to EC

Aggressively promote service diversification, expand adoption within the industry, andprovide DX support for cashless business of financial institutions and business operators

operators.
The acquiring support function of the GMO-PG
Processing Platform was provided to JFR Card Co. Ltd. tolaunch their merchant network expansion and to jointly
promote expansion of the merchant network for the credit

Customers face different management issues depending on

Q2. What personal achievement do you want torealize at the Company?

the industry or sector. We seek to resolve these issues by

The Company’s customers are diverse and consist of a wide

sharing in the issues and standing together with customers.

variety of companies, including both industry leaders and

The Company’s business domain is centered on pay-

Through these strategies, we will contribute to the cashless migration of
payments in Japan.

J oint Promotion of Regional Revitalization and Collaboration of Merchant Business by
Providing Acquiring Support Function to JFR Card Co. Ltd.
The Company offers the GMO-PG Processing Platform to

Q1. What value do you contribute to customers

companies

TO PIC

Shimpei Iriguchi

Group Manager
Payment Products Group
Digital Transformation Department
Innovation Partners Division

Given this business environment, the Company’s growthinvestment amount by financial institutions, in which we

venture companies. My days are very exciting being

ment, but for the customer payment is only a tool, a means

involved with large-scale projects with industry leaders as

to an end. I strive to create a story that resolves the cus-

well as innovative work with venture companies. It is not easy

tomer’s issue, because involving the stakeholders and par-to create a new solution and I am constantly questioning andtaking in the trials and tribulations is the way to bereflecting upon myself, but by gaining inspiration from theacknowledged as a partner and create value. These efforts

large number of customers can help in understanding what

result in the value proposition that contributes to improving

the necessary solution is 5 or 10 years from now, and the canthe customer’s corporate value.

provide the inspiration. I want to keep challenging myself tocard to stores located near J. Front Retailing Co. Ltd. com-

GMO-PG Processing Platform
Credit card issuing
support
Debit card issuing
supportHouse solution
support

Prepaid card
issuing support

AcquiringsupportPayment
solution

Improving convenience of card members
Connectivity to external sources

Commonfoundation

Marketing and sales promotions, etc.
Operation and management

mercial facilities.
*1 Operations that include invoicing the card usage amount, providing
services to card members, and credit card issuance and marketing andmembership acquisitions*2 Operations that include payment processing for the credit card processing,settlement, and contract management of merchants as well as merchantacquisitions

Selection of common foundation and payment solutions
necessary for business expansion
Banks

Corporations

Credit card companies
Business companies

Alliance partners

Individuals

End users

build what will be “obvious” in the future in the world andaccept both failures and successes as my own result.

24

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

25

Business Strategy

Focus Area

IoT

Business Environment and Growth Strategy
Offline Cashless Market TAM

2020 ¥87 tr*

2025

Given this business environment, the growth strategy of¥118 tr*

The progress of IoT which connects all types of devices tothe internet is leading to the rapid expansion of payment
and billing systems in various aspects of life, which in turnaccelerates the offline payment market, in addition to thegovernment’s cashless promotions and COVID-19 as well.

GMO Financial Gate, Inc., which listed on the TSE Mothers
market in July 2020, are:
• Expand payment platform “stera” that was developed
jointly with Sumitomo Mitsui Card Co. Ltd. and Visa
Worldwide Japan Co. Ltd.
• Expand payment solution to the Unattended Market (UM)such as payment machines at car-parks, vending machines,
and ticket machines
Aim for seamless value proposition in both the offline
cashless and online payment markets by leveraging theYuhei Nemoto
General Manager
Sales Department #2
Sales Division
GMO Financial Gate, Inc.

synergy within the Company.
Key Person Interviews with Partners* Figures are Company estimates based on Payments Japan Association’s “Cashless Roadmap 2019” and Yano Research Institute’s “Online Payment/
Settlement Service Providers 2018.”

TO PICS

VisionLaunches New Initiative of “stera” the Next Generation Payment Platform

Promote the proliferation of new cashless payments, improve the customer’s productivity
and support the unmanned/labor-saving initiatives at offline stores

Bring about a New
CashlessPayment

Full scale sales and marketing activities started this term forthe enterprise version of “stera,” the next generation payment platform, developed jointly with Sumitomo Mitsui
Card Co. Ltd. and Visa Worldwide Japan Co. Ltd.

Q1. What value do you contribute to customers
My belief is that payment should not be conspicuous.

Q2. What personal achievement do you want torealize at the Company?

Payment should aim to be seamless, because payment is

To be inside the rapidly changing world of payment means

not the objective of economic activities but is an indispens-

to be constantly seeking change. Five years ago it wasable part of it. Our mission is to not only provide cashlessinconceivable that QR-code payment would proliferate asservices that are safe and secure (to make payment “incon-much as it has. That is why it is important to constantly envi-

spicuous”) but also to provide convenient and easy-to-use

sion what the payment method will be 5 or 10 years fromservice (to make “payment effortless”). The Company

now and to provide the new system and service to partner

provides value by supporting the growth and operational

companies. This is the greatest mission of the Company andefficiency of customers around the themes of contactless

I feel that my personal achievement is to bring happiness to

payment and unmanned payments where adoption is accel-

people as a result of this mission.

erating by working together with customers for the optimalplan and services.

This initiative will enable the Company to expand business in the ¥90 tr offline market in addition to core online
payment services.
In addition, new initiatives were launched this term suchas the subscription service “stera pack” to respond to the

The “stera terminal”, an
all-in-one payment terminal
with easy add-ons of new
functions and payment
methods

need for cashless use in both offline face-to-face and online
scenarios, and “stera mobile” a handheld mobile terminal
using LTE connectivity.

 trengthen Alliance between Companies through the Business Reorganization
S(and the Entry into the Offline Market) of SMBC GMO Payment, Inc.
SMBC GMO Payment, Inc. (an equity method affiliate of theCompany) entered the offline cashless market on April 2021,
a joint venture company established with Sumitomo Mitsui

Sales Structure by Merchant Size
Large enterprises

Banking Corporation to provide online payment services.
This built a marketing structure consisting of the threecompanies of GMO Financial Gate Inc., GMO Card System
Inc., and SMBC GMO Payment, Inc. to promote cashless
migration of the massive offline market.
This will leverage the strengths of each company consistingof the Company’s cutting-edge payment technology, Sumitomo
Mitsui Banking Corporation’s client base, and Sumitomo Mitsui
Card Company’s payment know-how and merchant base, andwill jointly work to generate further business synergies.

26

GMO Payment Gateway, Inc.

Large to mediumsized enterprises

Small operators(EC operators)

No. ofstoresAnnual Report 28th Fiscal Year 2020.10.1–2021.9.30

27

Business Strategy

Focus Area

GLOBAL

Business Environment and Growth Strategy
Japan’s business operators are expanding overseas with theGiven this business environment, the Company’s growth

acceleration of EC penetration in Asia. However, there are

strategies to expand the business are:differences in the preferred method of payment and the• Grow Z.com Payment’s payment service for domestic oper-

development of payment infrastructure in Asian countries.
In addition, investment activities have increased to
FinTech companies in Southeast Asia and India.

ators entering the EC business, primarily in Taiwan andother Asian countries/regions• Invest in payment and FinTech companies in the focus
markets of Asia and the U.S.
• Support growth of high-growth investees and business
partners through lending

Satoru InohanaManagerSoutheast Asia Group /Asia Lending Business Department
Asia Business Management Department
Corporate Value Creation Strategy
Division

TO PICKey Person Interviews with Partners

VisionPromote investments and lending to support growth of outstanding start-ups in Asia

including India, and promote financial inclusion through the provision of impact financeQ1. What value do you contribute to customers?
The Company provides growth funds through the lendingQ2. What personal achievement do you want torealize at the Company?

business to outstanding FinTech start-ups in Asia. FinTech

I strive to be a person that can build deep trust with mycompanies leverage technology to provide financial ser-counterparts, regardless of differences in culture or nation-

vices to SMEs, the middle-income class, and the poorer seg-ality. The most important aspect of providing funds to over-ments that traditional financial institutions do not serve. The

seas companies is to build mutual trust. Throughfunds provided by the Company are used to enhance finan-

understanding the counterpart’s business and strategy

cial inclusion through the businesses of the FinTech compa-

deeply, the key is to build the trust in the counterpart andnies in that country. I think this is honorable work to support

vice versa. I strive to build such a trustful relationship in mythe business development and improvement of living stan-daily work given the different cultural backgrounds anddards of the local population.

nationalities of the people I work with.

 roviding Impact Finance to FinTech Companies Promoting Financial Inclusion
P~Loans Extended to SATYA, India’s Major Microfinance Provider~
SATYA MicroCapital Ltd., a group company of Gojo &non-convertible debentures (NCDs) through the GMO-Z.

Company, Inc., has supported millions of people in escap-

Com Payment Gateway India, Credit Fund, which is oper-

ing from poverty by opening the path toward economic

ated by the locally incorporated company in India, GMO-Z.

self-sufficiency through the provision of microfinance to

COM PAYMENT GATEWAY INDIA PRIVATE LIMITED, estab-

unbanked people (those without a bank account or any

lished in 2019.

deposit) in the rural areas of India and has enabled socio-

The Company will continue to invest in and provide

economic independence by providing access to fast andlending activities to FinTech companies that promote finan-convenient financial services that use smartphone app

cial inclusion and contribute to social progress andtechnologies.

advancement.

The Company supports such activities and in order to
aid in resolving global poverty, conducted a 300 mil Indianrupee (approximately ¥450 mil) loan facility in the form of* Converted using the exchange rate of 1 Indian rupee (INR) = 1.5 Japaneseyen (JPY) (As of September 30, 2021)

In addition, the Company offers Z.com Payment, a payment processing business in Asian countries for the overseas operations of Japan’s EC operators. The characteristicof the kind of work I do in the Money Service Business isthat there is a strong theme of payment, as seen in the cases
where we provided growth funds to FinTech companies thatprovide BNPL services.

28

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

29

Foundations to Support Sustainable Growth

Sustainability Management
Driving Social Progress and Advancement by Supporting DX and Decarbonization
Focus Areas for the Realization of Sustainability

Promoting Social Inclusion through Credit and Digital Technology

The Company focusses on the following areas stated below for the realization of a sustainable society, taking

Based on the GMO-PG group’s management principle to “pursue both material and spiritual prosperity through our

into consideration businesses and the opinions of stakeholders. Going forward, the Company will identify theinnovations in payment and financial technology, as well as providing services centered on payment that support DX,

advance its sustainability management.

contributions to the progress and development of society,” the Company engages in SDG initiatives by driving social

relevant materiality issues that should be prioritized from a medium-to-long term perspective in order topaperless, cashless, and online migration. In addition, the Company will contribute to social inclusion where anybody
can participate in and embrace diversity.

Focus Areas

Digital inclusion*1

Financialinclusion*2

Contribution to
the environment

Contribution tohuman capital

Practice of soundmanagement

Related ESG

E

Environment

E

Environment

Contribution to SDGs

Initiatives
 ealize a convenient and comfortable society by promoting cashlessRmigration and EC penetration
Support merchants with varied forms of digital sales such as EC
website and delivery through payment services
Open innovation with numerous business partners

S

Social rovide impact finance to FinTech companies (microfinance) thatP
promote financial inclusion
Instant Salary byGMO service enables receiving salary at thepreferred timing
Access to e-commerce (EC) to non-credit card holders by offering
BNPL (Buy Now Pay Later)
Lending service provides loans to operators for working
capital needs

S

SocialE upport merchants’ decarbonization by supporting DX initiatives
Ssuch as paperless operation
Commence payment processing using de facto renewable energy

Environment

 tilize diverse human resources (promotion of diversity)UBased on the belief that “people determine the company,” support
personal growth through proprietary human resource development
programs and share in the corporate visionBased on the idea that “Corporation is a place to foster personal
growth,” provide a workplace to fully unlock the potential and capability of the workforce (workstyle reforms)

S

SocialG

Governance evelop systems for a effective corporate government
DStrengthen information security as the highest priority issue
Strengthen compliance*1 Initiatives to realize a society where everyone enjoys the benefits of digital technology, where no one is left behind and the disparity in access to digital technology is eliminated*2 Initiatives to realize a society where everyone enjoys the benefits of financial service, where no one is left behind and the disparity in access to financial service is eliminated30

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

31

Foundations to Support Sustainable Growth

E Environment

S Social, Human Resource, and Workstyle Reforms

The Company’s Services and Climate Change Issues

Respect for Human Rights

The Company promotes initiatives such as paperless, cashless, and online migration that have lower environmental

The Company supports and upholds the international norms of the UN International Bill of Human Rights, UN Guiding

global FinTech service operators and online businesses that have low environmental burden. The Company aims to

Principles and Rights at Work. In addition, the Company will fulfill its responsibility to respect human rights through inter-burden compared to conventional payment services, as well as provide lending services to support the growth ofrealize a sustainable society, support the conversion to a decarbonized society, and undertake initiatives to lower theenvironmental burden of customers and society through our services.

Principles on Business and Human Rights, and the International Labor Organization’s Declaration on Fundamental

nal rules and Employees’ Code of Conduct that all partners (employees) must adhere to, which stipulates the respect forbasic human rights and principles that prohibit any discriminative treatment. We uphold equal opportunity and respectfor diversity in accordance with the Venture Spirit Declaration as a member of the GMO Internet group, which states that

Opportunity and Risks Associated with Climate Change“we do not tolerate prejudice on the grounds of race, nationality, gender, educational background, language, religion, or

Recent years have seen a worsening of climate change issues, and services offered by GMO-PG’s consolidated companies

any other factors. We value people for their ability and merits.” Furthermore, the Company strives to secure fair and equi-

may also be impacting the climate and natural resources through CO2 emissions from the electric power consumptiontable labor conditions by convening forums to foster mutual understanding with partners when necessary.

of and response to natural disaster risks, including climate change.

Human Resource
Diversityused in its services. To combat this issue, the Risk Management Committee comprehensively undertakes an assessment

Risk

Acknowledge the short-term, as well as medium-to-long term risks, from the possibility of suspension/interruption ofoperations and services caused by injuries to humans, data loss, and destruction/damage to data centers from natural
disasters and abnormal weather.

The source of a company’s comprehensive capabilities and competitiveness is determined by the diversity of its humanresources and how well these are leveraged. To realize the aim of sustainable growth, it is important to recruit talentand establish talent development programs to raise the capability of all partners in order to realize our Mission, resolve
social challenges through innovative creativity, and create corporate value.

Recruitment activities are based on that individual’s comprehensive abilities of thoughts/opinions, passion, andCountermeasures

As part of disaster preparedness, methods and procedures have been stipulated to ensure business continuity in an

emergency, preparedness during non-emergency times, as well as securing back-up redundancy in the system configuration where appropriate.

capability and does not consider gender, education, science-oriented or humanities/arts-oriented nor nationality.
Unit
No. of partners (Consolidated)of which, no. of women partners

Opportunity

The heightened social need for a more environmentally sound business is leading to both current and medium-to-

long-term opportunities for services that promote paperless, cashless, and online migration provided by GMO-PG andof which, women managers Initiatives to Counter Climate
ChangePayment slip

Digital invoice

The Company supports the merchant’s migra-

Implement de facto renewable energy for electric power usage at major data centers, which consume the majority ofelectric power of all the businesses of GMO-PG’s consolidated companies, during FY2022.

To achieve zero GHG emissions (under Scope 1+2) in the Company’s operations that includes offices and all otherdata centers by FY2023.
GHG Emissions

FY2020

FY2021

Scope 1*1000Scope 2*2

1,559

1,736

1,883

* Scope 1: Direct emissions from owned or controlled sources* Scope 2: Indirect emissions from the generation of purchased electricity,
heating and cooling, etc.

32

GMO Payment Gateway, Inc.

226

240

%

38.7

36.8

36.2

16

17

22

123

105

of which, new graduates

Persons

22

30

23

of which, women new graduates

Persons8810Employee turnover rate (Consolidated)

%

8.5

6.1

7.2

Non-full time employees (Consolidated)

Persons

16

17

21

%

2.9

2.7

3.1

Employee ratio of disabled persons (Consolidated)

%

1.2

2.2

2.3

Average years of employment (Non-consolidated)

Years

4.1

4.2

4.6

Age

33.6

34.3

35.3

Millions of yen

7.85

6.86

9.55

Average Annual Salary and Operating Profit per Employee

Greenhouse Gas (GHG) Emission Reduction Targets

FY2019205* The figures for FY2019 do not include Macro Kiosk Berhad due to its deconsolidation in FY2020.
* The figures for no. of partners (consolidated) do not include seconded workers from external companies.
* The figures for FY2021 do not include the number of new recruits and employee turnover for BUFFORT Inc., which joined the group in April 2021 (Second half of
FY2021).

of electric power bills.

(Unit: t-CO2)

714

Persons

108

Average annual wages (Non-consolidated)

vices that digitalize payment slips for payment

FY2021625

Persons

Average age (Non-consolidated)tion to paperless operations by proving ser-

FY2020564

Persons

Total number of new recruits (Consolidated)

its consolidated subsidiaries.

FY2019Persons* Compiled from electric power usage at offices and data centers of the major
GMO-PG consolidated companies(Unit: Millions of Yen)

10

20

8

16

6

12

4

8

2

4

0

FY2006FY2011FY2016FY20210

Annual salary (non-consolidated) (left axis)
Operating profit per employee (right axis)* Figures up to FY2017 are based on J-GAAP, figures from FY2018 arebased on IFRS standards.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

33

Foundations to Support Sustainable Growth

S

Social, Human Resource, and Workstyle Reforms
Basic Policies for the Practice of Management Philosophy

Pregnancy and Child-Raising Support

As a member of the GMO Internet group, the founding principle of “Venture Spirit Declaration” is recited or read

Partner Interview

periodically at meetings and gatherings to share this among all partners (employees) and use this principle to steer
our conduct.

Q1. How easy was it to take a maternity leave?

HR Development
360 Degree Evaluation System

System in which a partner can evaluate their line manager anonymouslyS ystem to support the early development of a business professional by drawing up a development

Advisor System

plan and conducting monthly reviewsS ystem whereby each person submits their career plans

One-on-One Training

New graduate recruits rotate to each division and to each GMO-PG consolidated company toTraining program aimed at skills development to foster business leaders that can lead to a sustainable business growthDivisional Skill

Develop skills
required to foster
high performancein each division andcompany

Self-development seminar/Director’s study session

At start of
employment

School(e-learning)

Divisional training

Career Design System

Secondyear

Self-leadership trainingNew
graduates

made me worry whether it would be accepted or not.
Instead, those around me were the ones who worried
The second maternity was for 12 months.

Career Building

PG partner mentoring/Cross-interviews/1-on-1

PG Business training

TOEIC

HR and Labor Affairs training

Compliance study sessions/security education

Newly appointed
Manager leadership training

Globis Unlimited(e-learning)
External training

Managerlonger than what is generally accepted overseas, which

whether the maternity leave would be sufficiently long.

Core Skill (Selection, Recommendation by Superior, Open Application)

Leadership training (General Manager)

accepted. I am grateful for the understanding in the

The first maternity leave was for four months, which isexperience their vision and work atmosphere, after which the new recruits select their designation

GeneralManagerleave quite easily as this was considered as natural andworkplace.

Career Design System

PG Business Training

I have taken maternity leave twice and was able take

Advisory system
Study session with the President
Classroom session/1-on-1 training

Mid-career follow-up training
Midcareer

Study session with the President
Orientation for mid-career recruits

Q2. Were there any concerns about your career when
taking maternity leave and returning to work

To be honest, I did have concerns before the first mater-

Based on the concept that a company should be the platform for individual growth,

implement initiatives to continuously carry out workstyle reforms, including the establishment of proprietary talent development programs and welfare benefits; share its

vision with all partners to foster organizational growth; and provide the means to fully

deploy its talent. Thanks to these efforts, the Company was certified as a Great Place To
Work for the 7th consecutive time in July 2021, in the survey conducted by Great Place
to Work® Institute Japan.

Develop the Systems and Structures for Personnel to Flourish

The Company has established a whistle-blower system to thoroughly implement compliance. This system ensures fairand objective investigation while securing the anonymity and secrecy of the whistle-blower. In addition, the Corporate
Risk/Governance Office conducts harassment training periodically to all partners including managerial level staff.

child-raising?

There are times when it is difficult to balance child-raising and doing responsible work. But I feel there is ahealthy environment to positively pursue both careerand child-raising, thanks to the support of understanding and empathetic colleagues who are also parents
and, of course, the support of my family.

In particular, I am personally very grateful for the stag-

gered commute system. The ability to adjust the start andend times of workdays in 30-minute increments is very
helpful for dropping off and picking up my children.

nity leave, such as ‘would I be able to return to work in

Q4. What do you think of the Company’s culture?

want to when I return to work,’ and ‘would this impact my

I strongly feel there is a culture to place importance on

to returning to work, I had no concerns when I returned

determine the company.” There is compassion and atten-

the same capacity,’ or ‘will I be able to do the job that I

career path.’ But thanks to solid follow-up meetings prior
to work.

In fact, I was assigned to the division of my choiceafter the second maternity leave and am doing evenmore challenging work.

Employee Benefit Programs

On-site Childcare Facilities

each individual, as exemplified in the statement “peopletion paid to fellow colleagues in the day-to-day work, andeven the President kindly mentions that I should returnhome early to be with my children. One of the Company’s
good point is that this culture to take care of each otherpermeates the whole company.
Work Line Transfer System

An on-site childcare facility is available for working par-Partners that find normal working hours difficult due totheir children, drop the child at the childcare facility andfor changing working patterns such as no-overtime-work

ents. There are many partners that commute to work with

Workstyle Reforms

Q3. How are you balancing your career andreturn home with the child, and the facility can be used bymen and women.

Maternity Leave

Employees can take up to eight working days of leave(Special Paid Leave) before the start of prenatal leave forthe purpose of regular health check-ups and for feelingunwell (such as morning sickness).
Spouse Childbirth Leave

When a partner’s spouse is about to give birth, thespouse can take a special paid leave of a maximum of fiveworking days during the 30-day period before and afterchild-raising and parental care can apply to the Company
and/or shorter working hours when necessary.
Childcare Leave

Partners and part-timers can take leave until the childreaches three years of age.
Parental Care Leave

This allowance is paid for the purpose of showing appreciation and respect to parents.
Other Programs•F amily Support System (Pregnancy Support)•C hildbirth Special Payment

the day of childbirth, including the day of childbirth. This
enables partners to provide support and participation inchildbirth labor.

34

GMO Payment Gateway, Inc.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

35

Foundations to Support Sustainable Growth

G GovernanceCorporate GovernanceEvaluating the Effectiveness of the Board

The Company confirms that the Board’s effectiveness is appropriately secured based on a wide perspective of its organizational
design, nomination and remuneration as well as the Board’s composition and its operation and by incorporating objective and quanti-

Basic Views

Based on the management principle, the Company implements governance systems that can effectively and efficiently
realize this principle. The Company’s basic view on corporate governance is to implement measures and develop necessary management oversight systems for sound progress while simultaneously securing the legal compliance andefficiency of management, and corporate governance is positioned as one of the highest priority management issues.
Corporate Governance Structure

Accounting
and
Audit

Elect andDismiss Company with an Audit and Supervisory
Committee Board of Auditors (4 External Auditors)

Accounting Auditors

Collaborate

Directors’ Remuneration

In order to secure the transparency of the remuneration determination process and the appropriateness of the remuneration amount,
the Company has instituted the Nomination and Remuneration Committee that is chaired by an External Director, to act as the adviAudit Committee) is determined by the Board after due deliberations conducted at the Nomination and Remuneration Committee.
The remuneration amount for each individual Director is decided by the Board which basically aligns with the Nomination andElect and Dismiss

Remuneration Committee’s report following the Committee’s multifaceted considerations to ensure consistency with the policies
in determining the remuneration. Organization structure

Board of Directors (15 Directors, Including 5 External Directors)
Select, Discharge,
and Supervise

Elect and Dismiss

Audit
Report Management
Committee

Instruct
ReportInternal Audit OfficeDirectors’ BIP Trust
Elect andDismiss

Representative Director

Collaborate

continuously addressed through improvement measures and its implementation in order to further enhance the Board’s functions.

sory body to the Board, etc. The fixed remuneration amount (including the bonus payments) for Directors (excluding members of theGeneral Meeting of Shareholders

Elect andDismiss

fiable methods such as questionnaires to all Directors. Concurrently, the issues and problems revealed in the evaluation process is

Audit

Report Nomination andRemuneration Committee

Instruct

based on the achievement of business targets of each year. This incentivizes Directors to carry out management in awareness of thestock price and financial results from a medium-to long-term perspective and to share common interest with shareholders from a

Risk Management Committee

GMO Payment Gateway, Inc.
Concurrent position of directors
Information sharing and confirmation
Collaborate
Consolidated Group of Companies

Board of Directors and Executive Committee

The following initiatives shown below are implemented in order to strengthen the management oversight function through the separation of supervision and execution and to appropriately respond to changes in the business environment.
The Board of Directors makes decisions on matters of important management issues and on legal issues. The Board also oversees
the execution of business responsibilities by the Directors to ensure transparency, fairness, and efficiency in decision making.
Organization structure

The Management Committee is charged with the decision-making function for the execution of important operations, in order tostrengthen management oversight through the separation of supervision and execution. The Management Committee carries out
timely and appropriate decisions based on deliberations on important matters related to the execution of operations carried out inaccordance with the Basic Policy of the Board. Organization structure

Company with an Audit and Supervisory Committee

This Committee consists of four Directors (of which, four are External Directors) and the Directors of this Committee audit and supervise
the Directors’ execution of duties through attending important meetings such as Board Meetings and through conducting investigations based on the Audit and Supervisory Plan complied by the Audit and Supervisory Committee. Organization structureContinual Improvement of GovernanceSelection Policies and Nomination Procedures of Directors

The selection of Directors makes due consideration of Directors who are equipped with the knowledge, experience and skill to effectively carry out their role and responsibility and will be mindful to achieve the appropriate size and diversity of the Board. Candidate
for Directors will be selected on these policies and following the deliberations at the Nomination and Remuneration Committee, will
be formally proposed to the Board for the decision. Organization structure

Independence Standards for External Directors

In making the decision for designating External Directors including members of the Audit and Supervisory Committee as independent
Directors, the Company designates as independent Directors those who fulfill the proprietary standards set forth in the IndependenceStandards and Rules for External Directors.

scheme for Directors. This is a medium-to long-term incentive plan wherein common shares are distributed at the time of retirement

medium- to long-term view.

Divisions
ReportAuditor

The Company adopts the BIP Trust (Board Incentive Plan) for bonuses paid to Directors as part of a performance-based compensation

Directors’ Skill Matrix
Attendance rate for FY2021*
Name

Issei Ainoura
Masatoshi Kumagai
Ryu Muramatsu
Satoru Isozaki
Masashi Yasuda

Hirofumi Yamashita

Yuki Kawasaki
Akio Sato

Teruhiro Arai

Corporate
Risk
IT/Security
Management
Management

Position

President andChief Executive Office

GMO Payment Gateway, Inc.

GlobalAudit andSupervisory
Committee

Nomination andRemuneration
Committee

–

–

–

100%

–

–

Director,
Executive Vice
President

100%

–

100%

Director

94%

–

–

100%

88%

–

Director,
Executive Vice
President

Director

100%

Director

100%

Director

–

–

–

–

Director

Director, Audit andSupervisory Committee–

Director

Director, Audit andSupervisory Committee
Director, Audit andSupervisory Committee
Director, Audit andSupervisory Committee

Fumio Kai

Board meeting

–

–

–

–

–

–

–

–
–

100%

100%

100%

100%

100%

–

100%

100%

–

–

–

–

*The attendance of the Audit and Supervisory Board for FY2021 (transitioned to company with an Audit and Supervisory Committee from December 19, 2021)
Number of Board meetings convened: 18; Number of Board of Auditors’ meetings convened: 13; Number of Nomination and Remuneration Committee meetings
convened: 3

Engagement through IR Activities
IR Activities

The Company carries out timely disclosure of management information and investor relations (IR) activities for shareholders and other investors to enhance the transparency of management in order to achieve the aims of corporate
governance.

Summary of Activities for FY2021 (from October 1, 2020 to September 30, 2021)
Activity

Financial results announcements and briefings
One-on-one meetings
Participation in broker conferences

36

Finance

Investment
ESG/
(M&A)
Sustainability

100%

Kazutaka Yoshida

Yumi Hokazono

Payment
Processing
Business

100%

Director

Kazuhiko Okamoto

Treasury andAccounting

Chairman and Director

Noriko Inagaki

Takashi Shimahara

Legal
Affairs

Number of Events

4 times
Approx. 330
9 times
Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

37

Foundations to Support Sustainable Growth

G GovernanceRisk Management

3

Potential Breach of Personal Information and Its Impact
Risk

Status of Risk Management Structure

In order to tackle the various risks associated with business operations, the Company has developed a risk management
structure to secure stable growth and business continuity by optimizing and making permanent the cost required to carryout preemptive measures.

Risk of external leak of database information
managed by the Company that contains

against this risk. In addition, as a member of theJapan Consumer Credit Association, personal

numbers, and email addresses.

information management operations are implemented in accordance with the Personal
Information Protection Policy. Furthermore, theCompany established the Risk Managementmonitoring. This Committee comprehensively evaluates and manages various risks ranging from compliance risks such as

Committee to implement effective and efficient risk

corruption prevention, natural disaster related risks including climate change, risks associated with system security, etc.

management. The Risk Management Committee

The Board of Directors supervises the effectiveness and appropriateness of the corporate-wide risk management based

convenes once every quarter and reports its find-on periodic reports on the discussions and evaluations of the Committee.

ings on risk management to the representative

Note that there have been no material wrongdoing nor scandals during FY2021 due to the above initiatives.

directors, Board of Directors, and Audit andOrganization structure

Supervisory Committee. Organization structure

Information Security

The following certifications for information security have been certified as measures to strengthen the risk manage-

Basic View

ment structure.

The mission of GMO-PG and its consolidated subsidiaries is to contribute to the realization of secure and convenient payment
for both consumers and businesses, with the aim to become Japan’s payment infrastructure. Information security measuresand responses to protect information assets from external threats, while utilizing the information resources that are proprietary
to GMO-PG’s consolidated subsidiaries, are of the highest management priority.
Specifically, yearly educational and awareness-raising activities are scheduled to ensure that these measures take root.
Education is thoroughly conducted periodically at the start of employment through compliance training programs on deeper
understanding of procedures and purposes of security rules of the Company, basic policies and rules stipulated under the
information security management system (ISO 27001), as well as through awareness-raising videos on information security
measures. Additionally, improving the effectiveness of risks assessment is also carried out by inviting external experts to participate
in Risk Management Committee and by assigning of employees with specialized knowledge to the Internal Audit Office.

Response

The following requisite and appropriate responses
are enacted to mitigate risks, such as security mea-

providers (such as credit card companies)sures against unauthorized access from external

and/or weaknesses in the Company’s systems

and internal sources, a 24-hour surveillance struc-that result in the disruption of communicationture, duplication of system configuration, insurance

networks and the malfunctioning of applica-

policy enrollment, and development of internal

tions caused by cyberattacks, computer

rules on operations.

38

Response

In order to mitigate this risk, the Company undertakes strengthened management of merchants that
store such information as well as promotes services

mation leakage of credit card information

Company and not by the merchant.

occurring at the merchant.
GMO Payment Gateway, Inc.

mation security standard (within

IS 686090/ISO 270001

the credit card industry, which was
jointly formulated by the five global

Japan, the JIS Q 27001:2014

credit card brands: JCB, American

standard).

Express, Discover, MasterCard, andPrivacyMark Certified

In recognition of the appropriate
measures to safeguard personal

Visa. As such, we are delivering
peace of mind to all of our customers, in addition to securing credit card payments.

Industrial Standard for personal
information protection, JIS Q
15001:2017.

Compliance (Legal Compliance)
Basic View

includes adherence to related government ordinances.

merchant, etc., does not have the capacity

to fulfill the obligation in the event of infor-

PCI DSS global security standard for

ISO/IEC 27001:2013 global infor-

partners based on the awareness of “adapting to the demands of society” (known as the full-set compliance), which

Credit Card Information Breach at Merchantscost of reissuing credit cards when the

been certified as compliant with theregulations, and procedures, and d) management vision. The Company works to raise the compliance mindset of alldisasters or accidents.

Risk

compliance with version 3.2.1 of the

The Company considers the scope of compliance that includes: a) ordinances, b) ethics and social norms, c) rules,

access from an external source or natural

Risk of joint liability to cover the indemnityof our business locations, we havefies compliance with the Japaneseviruses, and/or unauthorized computer2

Fully PCI DSS Compliant

The services we provide are in fullPrivacyMark certification that signi-

System Failure and Information Security
seen system failures on the part of payment

Certified ISO 27001 Compliant

With a scope that encompasses all

information, we have received

Risks and Responses to Information Security

Risk

qualifies for the PrivacyMark in order to ensure

information, names, addresses, telephoneconsolidated companies to carry out risk assessment, formulating and executing countermeasures, andRisk of service disruptions caused by unfore-

The Company has implemented a solid system that

personal information such as credit card

Specifically, the Risk Management Committee has been established comprised of head of divisions and GMO-PG and its

1

Response

where the credit card information is stored by the

The Internal Audit Office reviews the state of compliance with ordinances, articles of incorporation, company rules

and other such regulations based on the yearly Audit and Supervisory Plan. Corrective measures are undertaken if acircumstance is found to require improvement as well as follow-up to ensure these corrective measures are enforced.
If an incident where a compliance violation is suspected occurs, the Company has developed and operates a whistleblower system in addition to the normal reporting system based on chain of command.
Note that no costs related to compliance violations have been incurred in FY2021.

Organization structure

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

39

Consolidated Financial Statements / Company Overview

Consolidated Financial Highlights

Consolidated Financial Statements

16 consecutive terms of revenue and profit growth since listing in 2005
Operating profit maintained a 25% growth from the dynamic operations from the diverse
range of services

Consolidated Statement of Profit and Loss

Revenue*Up 26.1% YoY

50,00041,66740,000(Millions of yen)

15,000

Revenue 1

Up 25.0% YoY
12,987

12,00020,000

6,000

10,0003,000
008 09 10 11 12 13 14 15 16 17 18 19 20 21 (FY)

Total Assets, Total Equity, Ratio of Total Equity(Millions of yen/%)Ratio of Total Equity
Attributable to Owners of Parent

08 09 10 11 12 13 14 15 16 17 18 19 20 21 (FY)

25.9

100,000

57,82020

08 09 10 11 12 13 14 15 16 17 18 19 20 21 (FY)0(13,568)

159

263(13,424)(193)

28,098(15,031)
(343)

(202)

517

17

 Profit before
income taxes 3

10,98913,285 Profit from continuing
operations(3,116)(4,302)

7,872

8,982

(179)

–

7,693

8,982

7,624

8,818

7,693

8,982

Profit/loss from discontinued
operations

Profit attributable to:
Owners of parent

20.1

336

484

Non-controlling interests
Profit69

164* Due to the deconsolidation of Macro Kiosk Berhad in FY2020, its businesshas been reclassified as a discontinued operation and the figures for profit/
loss from discontinued operations is presented separately from profit fromcontinuing operations.

10

0(9,199)23,846

Discontinued operations

30

20

41,667(253)

Profit6.5

1050,000030

33,046

12,987

Income tax expenses

08 09 10 11 12 13 14 15 16 17 18 19 20 21 (FY)Key Points of Consolidated Statement ofProfit and Loss

FY2021(Oct. 1, 2020 to
Sept. 30, 2021)

10,388 Equity method investment
gains or losses

40

150,000 Selling, general andadministrative expenses

Financial expense

215,455

200,000

Other income

Financial income(%)

Up 9.4% YoY 50

250,000

Gross profit

Operating profit 2

ROA and ROE*

Attributable to Owners of Parent

Cost of sales

Other expenses

9,000

30,0000

Continuing operations

Operating Profit*

(Millions of yen)

(Millions of yen)
FY2020(Oct. 1, 2019 toSept. 30, 2020)

1

Revenue

Payment Processing Business revenue increased 33.7% YoYfrom the steady growth of the EC market and the expansion ofservices in the offline domain. Money Service Business revenue
increased 7.8% YoY due to the tighter credit in light of the
impact from COVID-19 for GMO Payment After Delivery, a
BNPL (Buy Now Pay Later) service, although Early Payment
Service trended favorably in line with the expansion of Payment
Processing Business. Payment Enhancement Business revenue
increased by 19.2% YoY from heightened demand for the
Medical Kakumei byGMO service, a reservation management
system exclusively for medical institutions, spurred by COVID-19.
As a result of the above, total revenue reached ¥41,667 mil
an increase of 26.1% YoY.
2

Operating Profit

Segment profit for Payment Processing Business increased by
24.6% YoY as a result of steady growth in high-margin online
payment as well as the expansion of offline payments. Segment
profit for the Money Service Business increased by 16.3% YoY
due to controlling credit related costs to a certain level. On theother hand, Payment Enhancement Business recorded a segment loss of ¥106 mil due to impairment loss on goodwill
related to GMO Medical Reservation Technology Co. Ltd. inlight of its recent business operations.
As a result of the above, operating profit was ¥12,987 mil,up 25.0% YoY, and operating profit margin reached 31.2%.
3

Profit before Income Taxes

Profit before income taxes reached ¥13,285 mil due to theincrease of operating profit by ¥2,598 mil YoY and the decreasein equity method investment income of ¥500 mil YoY.

Consolidated Statement of Comprehensive Income(Millions of yen)

Total assets

Total equity

Ratio of total equity attributable to owners of parent (right scale)Return on assets (ROA)
Return on equity (ROE)

Continuing to secure the necessary internal reserves to

Dividends for this fiscal year have been raised to ¥59 perstrengthen corporate capability and for future businessshare, an increase of ¥7 per share compared to FY2020, in

expansion as well as continuing to stably return profits tolight of the enhancing shareholder returns and as profits

shareholders are material issues for the management.

exceeded the Company’s forecasts.

FY2020(Oct. 1, 2019 to Sept. 30, 2020)

ProfitOther comprehensive income    Fair value of financial assets measured through other comprehensive income     Share of other comprehensive income of equity method affiliates     Total of items that will not be reclassified to profit or loss     Exchange differences on translation of foreign operations    Total of items that will be reclassified to profit or loss  Other comprehensive income after income taxes
Comprehensive income
Comprehensive income attributable to:   Owners of parent  TotalGMO Payment Gateway, Inc.

8,982

570

102

819

648

248

   Items that will be reclassified to profit or loss  Non-controlling interests

40

7,693

   Items that will not be reclassified to profit or loss    Share of other comprehensive income of equity method affiliates* Due to the deconsolidation of Macro Kiosk Berhad in FY2020, its business has been reclassified as a discontinued operation. As a result, the figures for revenue andoperating profit only represent the amounts for continuing operations. The figures for FY2019 have been similarly restated.
* Titles of charts are based on IFRS standards. Figures before FY2017 are based on J-GAAP, and assets refers to total assets, shareholders’ equity refers to net assets,
total equity attributable to owners of parent to total assets refers to equity ratio, return on assets using profit before income taxes (ROA) refers to ratio of ordinary
income to total assets, and return on equity using profit attributable to owners of parent (ROE) refers to return on equity.
(Note) IFRS standards have been adopted from FY2018, and the figures for FY2017 are restated on the same basis.

FY2021(Oct. 1, 2020 to Sept. 30, 2021)

546

(279)

271

(254)

350

25

565

79

999

8,258

9,982

8,187

9,814

8,258

9,982

70

167

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

41

Consolidated Financial Statements/Company Overview

Consolidated Financial Statements
Key Points of Consolidated Balance Sheet

Consolidated Balance Sheet(Millions of yen)
FY2020
As of Sept. 30, 2020

(Millions of yen)

FY2021
As of Sept. 30, 2021

FY2020
As of Sept. 30, 2020

FY2021
As of Sept. 30, 2021

Liabilities and equity
AssetsLiabilities

Current assets

Current liabilities   Cash and cash equivalents

95,830104,523  Operating receivables andother receivables

10,782

10,308   Advance payments–trade

31,03945,321   Accounts receivable–other

23,58524,893  Inventories

1,440

1,664

  Deposits to affiliates
and subsidiaries

5,000

2,000

   Other financial assets

1,163

455

   Other current assets537   Total current assets

169,379

4,296

5,230

   Accounts payable–other

19,385

20,537  Deposits received

87,05984,593  Borrowings

18,80015,138   Other financial liabilities

400

621

   Income taxes payable, etc.

2,491

2,602

352

327

   Other current liabilities

3,383

3,662

335

   Total current liabilities

136,169

132,714

189,503

Non-current liabilities

19,593

131

20

3,013

2,889

  Provisions

260

130

   Deferred tax liabilities

54

78   Tangible assets

3,714

3,948

  Borrowings   Goodwill and intangible assets

4,854

5,521

   Other financial liabilities  Investments accounted forusing equity method

3,740

4,593

  Operating and otherreceivables

1,975

4,231

   Other non-current liabilities

2,124

2,209

   Other financial assets

6,711

6,005

   Total non-current liabilities

22,39924,920   Deferred tax assets

1,530

1,529

Total liabilities

158,569

157,635

115

122

Other non-current assets
Total non-current assets

Total assets

42

16,814  Corporate bonds

Non-current assets

GMO Payment Gateway, Inc.

22,642

192,022

25,952

215,455

Liabilities

Total assets increased by ¥23,433 mil to reach ¥215,455 mil

Total liabilities increased by ¥933 mil to reach ¥157,635 milcompared to end of the previous fiscal year, due to an increase

compared to the end of the previous fiscal year, due to an

in cash and cash equivalents from corporate bond issue and theincrease in corporate bonds of ¥2,778 mil and a decrease inincrease in advances received for the Money Service Businessborrowings of ¥3,773 mil.

from the expansion of Payment Processing Business.

   Accounts payable–trade  Provisions

AssetsShareholders’ Equity
Total shareholders’ equity increased by ¥24,366 mil to reach¥57,820 mil from the conversion of convertible bonds withstock acquisition rights of ¥17,040 mil.

AssetsLiabilities and Net Assets(Millions of yen)

(Millions of yen)

192,022

215,455

Current assets
189,503

Current assets
169,379

Current liabilities
132,714

Current liabilities
136,169

Non-current
liabilities
24,920Non-current liabilities
22,399Non-current assets
22,642
FY2020
As of Sept. 30, 2020

192,022

215,455

Non-current assets
25,952
FY2021
As of Sept. 30, 2021

Equity57,820Equity33,453
FY2020
As of Sept. 30, 2020

FY2021
As of Sept. 30, 2021

Consolidated Statement of Cash Flows
Net funds used by operating activities amounted to ¥6,343

affiliated companies which was offset by cash inflows frommil due to cash inflows from the profit before tax which wasproceeds from withdrawals from deposits to subsidiaries

Equityoffset by cash outflows from increase in advances paid andand affiliated companies.

  Capital stock

4,712

13,323

corporate and income tax payment.

  Capital surplus

5,675

15,191  Retained earnings

20,72526,546   Treasury stock(1,149)(1,152)  Other items of equity

1,769

1,937

  Total equity attributable toowners of parent

31,73455,845  Minority interests

1,719

1,974

Total equity

33,45357,820Total liabilities and equity

192,022

215,455

Net funds provided by investing activities was ¥2,230

Net funds provided by financing activities was ¥12,781
mil due to cash outflows from net reduction in short-term

mil due to cash outflows from acquisition of intangible

borrowings and dividend payouts which was offset by cash

assets and payment into deposits to subsidiaries andinflows from issuance of corporate bonds.
(Millions of yen)
FY2020(Oct. 1, 2019 to Sept. 30, 2020)

FY2021(Oct. 1, 2020 to Sept. 30, 2021)

Net cash provided by (used in) operating activities

49,188(6,343)

Net cash provided by (used in) investing activities(4,493)2,230

Net cash provided by (used in) financing activities(785)

12,781

Translation differences of cash and cash equivalents

(93)

23

Increase (decrease) in cash and cash equivalents

43,817

8,693

Balance of cash and cash equivalents at the beginning of the period

52,013

95,830

Balance of cash and cash equivalents at the end of the period

95,830104,523

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

43

Consolidated Financial Statements/Company Overview

Board of Directors and Management Committee Members(As of December 20, 2021)

Member of the Board

Issei
AinouraPresident andChief Executive Officer

Company Overview (As of September 30, 2021)

Management Committee Member

Masatoshi
Kumagai

Chairman and Director

Ryu
Muramatsu

Director,
Executive Vice President

Company Information

SatoruIsozakiDirector,
Executive Vice President

Masashi
YasudaDirector

Name

GMO Payment Gateway, Inc.

Stock listingFirst section of the Tokyo Stock
Exchange (Securities code: 3769)

Establishment

March 1995

Business outline	Integrated payment-related services andfinancial services
Memberships

Head office 	SHIBUYA FUKURAS 15F 1-2-3 Dogenzaka,
Shibuya-ku, Tokyo 150-0043, Japan(Offices relocated to the above address on
November 25, 2019)
Consolidated
paid-in capital¥13,323 million

Consolidated
capital surplus¥15,191 million

Number of
employees

714 (Consolidated)

Major subsidiaries 	GMO Epsilon, Inc.
GMO Payment Service, Inc.
GMO Financial Gate, Inc.
GMO-Z.com Payment Gateway Pte. Ltd.
Number of affiliates 	14 consolidated subsidiaries
4 affiliates accounted for by equity method

Stock Status (As of September 30, 2021)
Hirofumi
Yamashita
Director

Yuki
KawasakiDirector

Akio
Sato

External Director

Teruhiro
Arai
Director

NorikoInagakiDirector

Annual meeting of shareholders
Annually in December

Total number of authorized shares

102,400,000

Total number of shares issued

76,557,545

Number of shareholders

6,721

Shareholders and Numbers of Shares
Financial institutions

Other institutions

Individuals, others(16,944,305 shares)(31,246,387 shares)(3,027,969 shares)

22.13%

TakashiShimahara
Director

Kazutaka
YoshidaExternal Director

KazuhikoOkamotoExternal Director

Yumi
Hokazono

External Director

Fumio
Kai

External Director

Financial instruments
business operators

40.81%

3.96%

Foreign institutions, etc.

Treasury shares(24,844,895 shares)(5,291 shares)

0.64% (488,698 shares)

32.45%

0.01%

Major Shareholders (As of September 30, 2021)
Name of shareholder

Chief Managing
Executive Officer

Tatsuya
Koide

Chief Managing
Executive Officer

Yuichi
HisakaSenior Managing
Executive Officer

Takashi
Mitani

Senior Managing
Executive Officer

Tomoyuki
MurakamiManaging Executive Officer

Sharesowned

GMO Internet, Inc.

31,172,200

Custody Bank of Japan, Ltd. (Trust account)

4,691,700

The Master Trust Bank of Japan, Ltd. (Trust account)

ShinichiSugiyama

Sumitomo Mitsui Banking Corporation
BNYM AS AGT/CLTS 10 PERCENT
THE BANK OF NEW YORK 134088

STATE STREET BANK WEST CLIENT - TREATY 505234
The Dai-ichi Life Insurance Company, LimitedIssei Ainoura

SSBTC CLIENT OMNIBUS ACCOUNT

5,999,300

2,501,600

1,486,176

1,199,700
961,248816,300

800,000

698,512Stockownership
ratio (%)

40.72

7.83

6.12

3.26

1.94

1.56

1.25

1.06

1.04

0.91

(Note) The stock ownership ratio is calculated using total shares outstanding
less treasury shares (5,291 shares).

Notes for Shareholders
MasaruYoshioka

Managing Executive Officer

44

Takeshi
YoshiiManaging Executive Officer

GMO Payment Gateway, Inc.

Katsunari
Mukai

Managing Executive Officer

Kazunari
TaguchiManaging Executive Officer

Japan Consumer Credit Association
Japan Multi-Payment Network Promotion
Association (JAMPA)EC Payment Forum
Japan E-Commerce Consultant Association

Business year
October 1 through September 30 of the following year
Base dates for dividends of surplus
December 31, March 31, June 30, September 30

Shareholder registry administrator
Mitsubishi UFJ Trust and Banking Corp.
Administrator contact information
Mitsubishi UFJ Trust and Banking Corp. Stock Transfer Agency
Department, 1-1 Nikkocho, Fuchu-shi, Tokyo 0120-232-711 (toll-free)
Stock listing
Tokyo Stock Exchange
Method of public notices
Through electronic public notices
Notices published at https://corp.gmo-pg.com/en/ir/(However, when electronic public notices cannot be published due to an
accident or any other inevitable circumstances, we will publish them in
the Nihon Keizai Shimbun newspaper)
Announcements
1. Points of note	(1) In principle, procedures such as change of shareholder address,bank remittance specifications for dividends, and purchase requests
are handled by the account management institution (securities company, etc.) where the account was opened. Please contact the securities company or other such institution at which you opened youraccount.
	Please note that the shareholder registry administrator (Mitsubishi UFJ
Trust and Banking Corp.) does not handle such matters.
	(2) Unpaid dividends can be received at the main branch or otherbranch offices of Mitsubishi UFJ Trust and Banking Corp.
2. Dividend calculation statements
	The “Dividend Calculation Statement” also serves as the “Notice ofPayment” created based on regulations specified in the Act on Special
Measures Concerning Taxation. After receiving payment of the dividend, it can serve as confirmation of the dividend amount and as
information used when filing income taxes. Shareholders who receive
dividends through their securities accounts (pro-rated method fornumber of shares) should contact the securities company that performs the transactions for details.
3.	For procedures pertaining to shares registered in special accounts,
please contact the institution that administers special accounts, Tokyo
Securities Transfer Agent Co., Ltd.
Mailing address and phone number	2-8-4 Izumi, Suginami-ku, Tokyo 168-8522 Tokyo Securities
Transfer Agent Co., Ltd. Business Center 0120-49-7009 (toll-free)(Note) At the annual meeting of shareholders held on December 20,
2015, it was decided that the Board of Directors would be thedecision-making body for dividends of surplus, and that therecord dates for these dividends would be December 31, March
31, June 30, and September 30. As a result, we are able to distribute dividends of surplus on four occasions throughout the year.
However, in order to ensure the retained earnings that our business structure requires, our plan calls for the year-end dividend
to be the single dividend of surplus distributed during the year.

Annual Report 28th Fiscal Year 2020.10.1–2021.9.30

45

GMO Payment Gateway, Inc.
URL: https://www.gmo-pg.com/en

Tokyo

FUKURAS Office (Head Office)	SHIBUYA FUKURAS 15F

1-2-3 Dogenzaka, Shibuya-ku, Tokyo 150-0043, Japan
Phone: +81-3-3464-2740
Humax Office	Humax Shibuya Bldg. 7F
1-14-6 Dogenzaka, Shibuya-ku, Tokyo 150-0043, Japan
Phone: +81-3-3464-2740
Osaka	Grand Front Osaka Tower 23F

3-1 Ofuka-cho, Kita-ku, Osaka 530-0011, Japan
Phone: +81-5-3201-4020

Kyushu Tenjin Asahi Building 5F	3-4-7 Tenjin, Chuo-ku, Fukuoka 810-0001, Japan
Phone: +81-3-3464-2323