Financial Results Briefing for Q3 FY2022
Key Message【Expand Stock-model revenue by offering solutions tailored to multiple industries and business categories】

August 9, 2022
GMO Financial Gate, Inc.
(Ticker:4051, TSE-G)

9th IR Presentation
https://gmo-fg.com/

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

Cautionary Note Regarding Presentation Materials

The content of these presentation materials is based on
generally recognized economic and social conditions, aswell as assumptions judged to reasonable by GMO
Financial Gate as of August 9, 2022
Note that presentation material content is subject tochange without prior notice in response to changes inthe business environment or other unforeseen
circumstances

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

2

Meeting agenda

1. Summary of financial Results for Q3 FY2022
2. Revision of FY2022 Forecast

3. Growth Strategy and Progress

4. Financial Highlights

5. Appendix

Copyright (C) 1999 GMO Financial Gate, Inc.

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3

1. Summary of financial Results for Q3 FY2022

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All Right Reserved.

4

1.1 Q3 FY2022 Summary

Quantitative comments

In Q3, we recorded steady progress in revenue and profits cumulative basis thanks to anincrease in Stock-model revenue mainly brough by the strong sales of payment terminals andthe lifting quasi of sate of emergency in Q3 standalone. We revised revenue forecast upwardly
P６• Q3 FY2022 Cumulative
Progress towards full year forecast:- Revenue：¥7.45billion(＋53.9％ YoY) 87.1％- Operating Profit：¥0.56billion(＋20.8% YoY） 76.5％
P8• Revenue by business model Q3 Cumulative- Initial revenue：¥5.24billion(＋50.3％ YoY)
- Stock-model revenue：¥2.21billion(＋63.5％ YoY) ⇒expanding steadily• KPIs P17, P18- No. of active terminals：174K(＋67K YoY, +62.6 YoY)
- TRX volume：82.37 million(2.1x YoY), GMV：¥665.8 billion (2.1x growth YoY)
P21

Qualitative
comments• Upward revision to FY2022 revenue forecast： ¥8.55billion → ¥9.80billion (+14.6% to previous forecast)•

In the long-tail business, in addition to the recovery from the effects of Re-Opening, the focus on specific industries has
been successful, contributing to the increase in Spread revenue•

Implementing multiple software-development projects for the growth from the next fiscal year onward (strengthen
solution capabilities by merchants’ industries)•

Strengthen ESG initiatives. Began monitoring supply chain CO2 emissions and formulated a roadmap for disclosing andacquiring certification
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1.2 Summary of Financial Results
Steady progress toward full-year forecast for both revenue and profits at each stage. Q3standalone had less-impact on COVID, such as quasi of state of emergency, so various KPIs are
steadily have expanded YoY*released on Nov 11, 2021

*released on Nov 11, 2021

Guidance
FY2022 full-year

Progresstowards guidance

Q3 FY2021
Cumulative

Q3 FY2022
Cumulative

Revenue

4,837

7,446

+53.9%

8,550

87.1%

Gross profit

1,506

1,935

+28.4%

2,421

79.9%

Operatingprofit466

563+20.8%

737

76.5%

Profit attributable toowners of parent

311

358

+14.9%

461

77.7%

No. of active terminals

Transaction volume

Transaction value (GMV)（end of Q3）（Q3 standalone）（Q3 standalone）

174,187（1.6x YoY）

Approx. 82.37million（2.1x YoY）

Approx. ¥665.8billion（2.1x YoY）

（Millions of yen）

KPI
（YoY）

YoY

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1.3 Major Topics Regarding Financial Results
Payment terminal sales remained steady. Gross profit exceeded the medium to long-term growthtarget of 25% thanks to an increase in Stock-model revenue. Operating profit progressed in linewith the full-year forecast◼ Revenue（millions of yen）

8,000

Revenue（+53.9％ YoY）

7,000(＋) Strong sales of payment terminals, particularly in stera(＋) Economic recoveries were seen in line with Re-Opening, and Stock-model revenue increased(－) Deferral of purchasing and sales of particular payment terminals due to the shortage of parts on the
manufacturer's side

◼ Gross Profit(＋) Revenue expansion(＋) Steady expansion of high-margin Stock-model revenue(－) Increase in revenue composition ratio due to stera, which is a low-gross-profit marginterminal

6,000◼ Operating Profit

5,000

7,446
4,000

3,000

4,837

Gross Profit（+28.4％ YoY）
2,000

1,000

1,506

1,935

(＋) Appropriate cost management(－) Addition of SG&A expenses for growth from the next
fiscal year onward to the portion that could exceed thefull-year forecast
・To recruit personnel
・Expansion of internal management system (including
investment in office infrastructure)・Implementation of incentives (bonus, etc.)
commensurate with the achievement of forecast

Operating Profit（+20.8％ YoY）
467

564

0
Q3 FY2021
Q3 FY2022
売上高
cumulative
cumulative

Q3 FY2021
Q3 FY2022
売上総利益
cumulative cumulative

Q3 FY2021
Q3 FY2022
営業利益
cumulative cumulative
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1.4 Revenue by Business Model
Steady growth in sales of payment terminals, particularly in stera, led to a steady risein the number of active terminals. Stock-model revenue also grew steadily YoY（millions of yen）

Q3 FY2021
Cumulative%

Q3 FY2022
Cumulative%

YoY

Initial

3,483

72.0％

5,235

70.3%

+50.3%

Stock-model

1,352

28.0％

2,211

29.7%

+63.5%

Stock

442

9.1％

621

8.3%

+40.5%

Fee

350

7.2％

882

11.9%

+152.0%Spread

560

11.6％

708

9.5%

+26.2%

Total

4,835

100.0％

7,446

100.0%+53.9%

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1.5 Revenue by Business Model (Quarterly)
Q3 standalone saw strong sales of payment terminals. In addition to the increase in the numberof active terminals, the negative impact of COVID was relatively small, and Stock-model revenue
had steadily expanded in Q3 standalone as wellInitial Revenue

Stock-model Revenue

Pre COVID

Under COVID（millions of yen）

Pre COVIDIn Q3, we had orders from merchants which have many stores inJapan that had pushed up Initial revenue
2,137

Under COVID（millions of yen）

900

841

Stock
800

2,000

1,682
1,525

YoY+69.9%
Fee

1,643

700

1,454

1,500

600
1,103

569

855
626

400

363

367

300

178

180

465

125

179

0
Q1 20/9期
Q2 20/9期
Q3 20/9期
Q4 21/9期
Q1
Q2 21/9期
Q3 21/9期
Q4 22/9期
Q1 22/9期
Q2 22/9期
Q3
20/9期
21/9期
4Q

State of Emergency①

Apr 7～ May25

1Q

FY20213Q
2Q

②

③

4Q

④

1Q

FY2022
2Q

3Q

Quasi of SOE

Jul 12～Sep 30 Jan 7～Mar 21
Jan 7～Mar 21
Apr 23～Jun 21

0

361

186
193

182

262

259

183

80

80

99

70

101

75

146

182

186

110

132

160

229

128

136

206

118

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

②

③

④

100

FY20203Q
2Q

218

149

200

1Q

239

251

203

427

391
333

693
451

500

683

495

500
430

1,000

687

Spread20/9期 20/9期 20/9期 20/9期 21/9期 21/9期 21/9期 21/9期 22/9期 22/9期 22/9期
FY2020
FY2021
FY2022
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
State of Emergency①

Apr 7～ May25

Quasi of SOE

Jul 12～Sep 30 Jan 7～Mar 21
Jan 7～Mar 21
Apr 23～Jun 21

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1.6 Initial Revenue and No. of Active Terminals (Quarterly)
Although the time lag between sales and activation may be sometimes long and sometimes shortdepending on the type of payment terminal and the type of merchant, the number of active
terminals steadily has been growing, partly thanks to the mix of past sales
+17.9

174.2

+13.1
+18.3

Initial Revenue（Units: millions of yen）
（ Units: Thousands）

No. of active terminals

+17.7
+14.1

156.3
143.2

124.9

107.2

+12.4
93.1

+8.0
+5.4
+9.7
+10.5

67.3

2,137

80.7
72.7

57.6
47.1

1,525

855
626

693

2020/9期 1Q
Q1 FY2020

1,682

1,454

1,643

1,103

451

465

2020/9期 2Q

2020/9期 3Q

2020/9期 4Q

2021/9期 1Q

2021/9期 2Q

2021/9期 3Q

2021/9期 4Q

2022/9期 1Q

2022/9期 2Q

2022/9期 3Q

Q2 FY2020

Q3 FY2020

Q4 FY2020

Q1 FY2021

Q2 FY2021

Q3 FY2021

Q4 FY2021

Q1 FY2022

Q2 FY2022

Q3 FY2022

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1.7 Merchant Industry
Preparing for the recovery in domestic consumption and inbound demand in the post-COVID
economy. Acquiring a well-balanced merchant base across industries：High inbound tourism demand
COVID-19 headwind
COVID-19 tailwind
NeutralStore scale：Large
One dollar
shop

Chain
restaurant
Hotel/Travel

Supermarket
Drug store(medicine/cosmetics)

Publictransportation(Train/bus etc.)

clothing/
Sporting
goods

Parking lot
Action Plan

High-end
retail/Department
store

IoT

mobility

Administrative
institutions(City office /Police station/
Drivers’ license agency)

Low unit
price
New

IoT
Vending/
checkoutmachine••Introduction of self-checkout
registers
IoT POS / Center linkage••

POS point linkage
Provision of DX services tobusiness partners

Solutions for the mass market
Provision of DX services tobusiness partners•

Sales strategies by industry/
individual company
Proposals in collaboration withbusiness partners

Comprehensive proposals
with alliance partners
High unit
price

Educational
institutions(Stores/Cafeterias in
University/High School)

stera pack
(For SMEs)

•
•

•

New

Small
restaurant/
Small retailService/
LeisureGMO Card System(consolidated subsidiary)
Smallrestaurant
Medical / Clinic(Incl: fine dining)

New

High ASP*
retailer(goods/apparel)

Store scale : Small
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*Average selling price
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11

1.8 Transaction Trends by Industry (Q3 standalone)Q3 standalone was in the middle of recovering toward the pre COVID level in terms of the
cashless payment value and volume
Merchant Ａ

TRX Volume

Chainrestaurant

Merchant C

COVID 19 headwind

TRX Value (GMV)(Japanese Izakaya)

100,000
LiftedQuasi
ofSOE
90,000
Seasonality
2,500,000,000&
80,000Super market
Quasi of SOE
2,000,000,000
Jun： 70,000

COVID 19 tailwind
TRX Volume
TRX Value (GMV)

Decreased due
to60,000rainy
season1,500,000,000

stayed solid level50,000Jun：
Decreased
due torainy season

40,0001,000,000,000
30,00020,000500,000,000
2021～

2022～

2021～

2022～

10,0000 0
21/1 21/2 21/3 21/4 21/5 21/6 21/7 21/8 21/9 21/10 21/11 21/12 22/1 22/2 22/3 22/4 22/5 22/6

21/1 21/2 21/3 21/4 21/5 21/6 21/7 21/8 21/9 21/10 21/11 21/12 22/1 22/2 22/3 22/4 22/5 22/6

Lifted160,000
Merchant D
Quasi of SOE

Merchant B
COVID 19 headwind

Hotel/Travel

TRX Volume
TRX Value (GMV)

Seasonality&
Quasi of SOE

Oct-Dec：Domestic demand

2021～

TRX Volume：High inboundtourism demand

TRX Value (GMV)

Easing of tourist
80,000entry limitation
from
2E+09
overseas：High inbound tourism demand
Jul-Aug：In-Bound demand
spiked because of the spot
factor caused by international
event held in Japan

140,000Drug store
3.5E+09
120,000 Pharmacy
3E+09(Medicine/Jun： 100,000 Cosmetics)
2.5E+09

COVID 19 tailwinds

stayed solid level
Jun：
Decreased
due torainy season

60,0001.5E+09
Mar：
Easing of entry
limitation fromoverseas

40,000
1E+09
20,000500000000

2022～

21/1 21/2 21/3 21/4 21/5 21/6 21/7 21/8 21/9 21/10 21/11 21/12 22/1 22/2 22/3 22/4 22/5 22/6

2021～

2022～

0 0
21/1 21/2 21/3 21/4 21/5 21/6 21/7 21/8 21/9 21/10 21/11 21/12 22/1 22/2 22/3 22/4 22/5 22/6

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1.9 Subsidiary’s contribution to an increase of Spread Revenue
Significant contribution from consolidated subsidiaries, steadily expanding consolidated spreadrevenue. Successful recovery in the long-tail area and accumulation of new business in specificindustries
Historical Revenue of Subsidiary (GMO CARD SYSTEM aka GMO-CAS)
Break down

GMO-CAS Revenue

Revenue from longtail type merchant

Revenue from particular industry

Pre COVID

Under COVID
Accumulation by specific industries contributed to steady GMO-CAS
sales growth even in the Corona disaster⇒Contributing to Expansion of Consolidated Spread Revenue
Recovering to approximately the pre-corona level

2018

2019

2020

2021
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2022
All Right Reserved.

13

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Steady accumulation

1.10

Top ranked merchants (GMV basis)

Stable expansion of hotels and other leisure-related merchants in addition to daily necessities◼ Top 30 TRX Value (GMV)
Q3 standalone FY2021
Retailer A
Drug store A
Drug store B
Super market A
High ASP retailer A
High ASP retailer B
Medical/Clinic A
Service A
Drug store C
Chain restaurant A
High ASP retailer C
Service A
Super Market B
Low ASP retailer A
Super market C
Retailer B
Retailer C
Service B
High ASP retailer D
High ASP retailer E
Service C
Service D
Retailer D
High ASP retailer F
Service E
Service F
Medical/Clinic B
Medical/Clinic C
Hotel/Travel A
Medical/Clinic D

Q3 standalone FY2022
Super market D
Drug store A
Retailer A
Low ASP retailer A
Drug store B
Super market A
High ASP retailer B
Chain restaurant A
Medical/Clinic A
Super market E
High ASP retailer A
Hotel/Travel B
High ASP retailer G
Apparel A
Drug store C
Super market C
Apparel B
Super market B
High ASP retailer H
Service D
Hotel/Travel C
Service A
High ASP retailer E
High ASP retailer C
Service B
Apparel C
Retailer B
Retailer C
High ASP retailer D
Hotel/Travel D

Subtotal of top 30 GMV¥81.2 billion

0

50

100

150

（Units：100 million yen ）

New

New

Rank-in (Unranked FY2021)
New
New¥120.5 billion(+¥39.3billion YoY, +48.4% YoY)

New
Rank-in (Unranked FY2021)

Subtotal of top 30 GMV• 10 merchants newly ranked in top 30-New contract：6

Rank-in (Unranked FY2021)-Unranked →Ranked in：4

New

Rank-in (Unranked FY2021)
0

50

100

150

（Units：100 million yen ）Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

14

1.11

Percentage of top 30 merchants out of total GMV(Q3 standalone)

Continued decline in dependence on top franchisees. Diversification of industry composition
also progresses◼ Q3 standalone (Apr-Jun) FY2021◼ Q3 standalone (Apr-Jun) FY2022

Percentage of top 30 merchants out of total GMV：¥314.1 billion： ¥81.2 billion

Total GMV in Q3 standalone
Top 30 GMV in Q3 standalone： ¥665.8 billion (+112.0% YoY)
： ¥12.05 billion (+48.4% YoY)

Total GMV in Q3 standalone
Top 30 GMV in Q3 standalone

9.9%

15.3%

14.9%
22.0%

18.1%

25.8%

Top10

Top20

Top30

Top10

Others

Top20

Top30

OthersPercentage of top 30 merchants by industrial composition (GMV basis)
3.2%

2.7%

1.3%

5.8%

8.8%

20.2%

23.6%
7.1%

11.2%

7.2%

19.8%
16.3%

High ASP retailer
Chain restaurant

18.0%

9.8%
15.1%

16.7%
Drug store
Medical/Clinic

3.8%

5.8%

Retailer
Low ASP retailer

Service
Hotel/Travel

Super market

Super market
Hotel/Travel

High ASP retailer
ServiceDrug store
Low ASP retailer

Copyright (C) 1999 GMO Financial Gate, Inc.

Retailer
Chain restaurant

ApparelAll Right Reserved.

15

1.12

Expandability of GMO-FG cashless platform

Horizontal × Vertical expansion to cultivate large-scale merchants. Forming a virtuous cycle inwhich results will have a positive effect on the acquisition of the next deal
Expansion of services by industry

Vertical expansion

3

4

Examples of merchants’ needs which is booked as softwaredevelopment revenue (=Our Initial Revenue)

・Labor-saving measures (self-flexibility needs, etc.)
・Development of payment systems based on housepoints/original points
・Conducted data returns for each industry and individualcompany. Collaboration with Customer BI
etc・・・

Growth strategies (～FY2025)
1

Delivering Next-Generation type of terminals

2

Expansion in IoT payment domain

3

Acquire large accounts through expansion of alliances with
QR, points, etc.

4

Increase added value by strengthening processing center
functionsContributes the acquisition of major merchant.
Track records leads us to next deals

2

Vending
machine1

Parking lot
EV meterLaundry

Amusement

TravelWholesale

Real Estate

Office/School

Medical/Welfare

Hotel/Inn

Bus/Railway

Restaurant

Retailer

Horizontal expansion

Expansion in customer industry

Approach to major player in each industry

・Acquirer
・ Clearing machine vendors
・ POS operators
Copyright (C) 1999 GMO Financial Gate, Inc. All Right Reserved.
16①Payment Terminal, ②Processing center, ③PSP service

1.13

Consolidated KPIs（No. of Active Terminals）

Steadily expanding payment terminals (excluding IoT), mainly in stera. Variation in the time until
the launch of sales → for each type of payment terminal contributes to the increase in thenumber of units in operation through the mix
200

Total number of active terminals： ＋67.0K Units YoY 、+62.6% YoY（Units：Thousands）

QoQ

180

IoT

143.2

Alliance partner sales

140

124.9

107.2
93.1

100

80.7
80

67.3

40

Alliance partner sales

18.0

+1.3K

156.3
＋0.3

(+7.8%)

17.7

IoT

17.9

44.6

＋1.4

120

60

174.2

＋17.9

Payment terminal(excluding IoT)
160

57.6
47.1

13.6

72.7

8.5
21.5

(＋32.7%)

43.2

16.4
42.3
39.8

33.6

Payment terminall(excluding IoT)

30.9

29.1
26.1

＋11.0K

16.7

16.7

14.9
14.4

9.6

By terminal type
YoY

95.4

28.0

＋16.2

111.6

＋54.8K(＋96.5%)

83.0
68.7

14.1

56.8

20
24.4

26.5

27.7

30.3

Q1 FY2020

Q2 FY2020

Q3 FY2020

Q4 FY2020

36.7

45.4

0
Q1 FY2021

Q2 FY2021

Q3 FY2021

Q4 FY2021

Q1 FY2022

Q2 FY2022

Copyright (C) 1999 GMO Financial Gate, Inc.

Q3 FY2022
All Right Reserved.

17

1.14

Consolidated KPIs (Quarterly TRX volume/GMV)

Developing merchants and active terminals without bias in any industry, significantly exceeding
our target of YoY+50%◼ Transaction Volume◼ Transaction Value (GMV)(＋)Lifted quasi
of SOE（Units: millions）

90(＋)Lifted quasi
of SOE（Units: ¥100 million）

7,000

80

Quasi of SOE＋
Seasonality

70

Quasi of SOE＋
Seasonality

6,000
5,000

60
50

4,000

40
3,000

2.1x YoY

30
20

2.1x YoY
1st SOE

2,000

Seasonality

10

Seasonality

1,000

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022

Q1 FY2020

Q2 FY2020

Q3 FY2020

Q4 FY2020

Q1 FY2021

Q2 FY2021

Q3 FY2021

Q4 FY2021

Q1 FY2022

Q2 FY2022

Q3 FY2022

TRX volume（Unit: 10 K）

1,383

1,494

1,809

2,231

2,683

2,774

3,848

4,914

6,497

6,293

8,237

GMV（Unit: ¥100 million）

1,442

1,534

1,307

1,833

2,329

2,361

3,141

3,810

5,251

5,162

6,658

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

18

1.15

Comparison with Market Growth

The market grew in April-May, when launches were low due to the impact of Corona last year. We
maintain a stable trend due to the ongoing GMV growth from the operation of new handsets evenin the Corona disaster
GMO-FGGMV YoY

ALL

Other retailers

Restaurants

Hotels/Inn（Unit：¥100 million）

GMO-FG Monthly GMV (Right axis)

2,500

2,000

260
234

216

215

211

186

1st SOE
186

160

153
113

111

108

99

216
193

192

202

203
183

148

84

82

173
96

97

97

91

102

101

215

2nd SOE/Seasonality

98

140

143

91

93

229

202

238

226

207

214

211

216

209

190
176

1,000
124
111

106

107

130

110

109

111

110

113

202

1,500
222

113

116

114
117

115 123

500

112

0

Dec 21/01
Jan
Oct 19/11
Nov 19/12
Dec 20/01
Jan 20/02
Feb 20/03
Mar 20/04
Apr 20/05
May 20/06
Jun 20/07
Jul 20/08
Aug 20/09
Sep 20/10
Oct 20/11
Nov 20/12
Feb 21/03
Mar 21/04
Apr 21/05
May 21/06
Jun 21/07
Jul 21/08
Aug 21/09
Sep 21/10
Oct 21/11
Nov 21/12
Dec 22/01
Jan 22/02
Feb 22/03
Mar 22/04
Apr 22/05
Mar 22/06
Jun
Oct 21/02
19/10

2019～

2020～

2021～
SOE①

②

③

Apr 7～May 25

Jan 7～Mar 21

Apr 23～Jun 21④
Jul 12～Sep 30

2022～
Quasi of SOE
Jan 7～Mar 21

Source: Ministry of Economy, Trade and Industry

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

19

2. Revision of FY2022 Forecast

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

20

2.1 Upward Revision to FY2022 Revenue Forecast(no revision to profit forecast)

Revenue：¥9.8 billion (+14.6％ to previous one. Reflected Q4 business forecast）
Profit：No revision（Considering ①Low profit margin of terminal sales②COVID impact ③Future investment）（Millions of yen）

FY2021
Full year actual

FY2022

FY2022

Full year forecast

Full year forecast（Original）（Revision）

Revenue

7,089

8,550

9,800

Gross profit

2,020

2,421

2,421

Operatingprofit589

737

Profit attributable toowners of parent

411

461

101.98111.90

ESP

*
737 *

% change

YoY（to original）＋38.2%+14.6％

1

－

－

2

－

－

461

－

－

111.90－－

Revised※No revision in ordinary profit as well
*1： Gross profit may also exceed the forecast due to an increase in net sales.
① A large percentage of sales come from sales of payment terminals with low profit margins, and even if they exceed them, they are considered
to be an increase on a limited basis.
② Re-expansion of Corona may have a negative impact on high-margin recurring revenue in 4Q
Based on the above two points, we have not corrected them.

*2： We have not revised the operating income forecast because we plan to accumulate personnel recruitment costs, internal infrastructuredevelopment costs, bonus returns, etc. for future growth from the next fiscal year onwards in SG&A expenses in excess of the full-year
forecast (¥737 million)
Copyright (C) 1999 GMO Financial Gate, Inc.

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21

3. Growth Strategy and Progress

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22

3.1 Progress of action plans for OP growth
Strategy to increase market share, starting with sales of payment terminals, is making steadyprogress towards the target. Various measures are making steady progress, and several midto long-term growth strategies are under consideration
FY2021

FY2022*Actual*ForecastOP¥0.59 billion¥0.74 billion

GMV¥1.2 trillion¥1.8 trillion

2024

2025

around 2035

Over ¥1 billion¥1.5 billion¥10 billion¥5 trillion¥30 trillion

Target◼ Mid- to long-term growth strategy (2026~)◼ Growth strategies and progress（~2025）① Acquire multi-industry/high-growth enterprises by launching next-generation multi-

1 payment terminals①

Maintain a growth curve of 25% ormore by diversifying alliance strategies(payment methods, additional
functions, customer acquisition routes)

2① Expand IoT payments by supporting contactless (tap) and unattended payments②⚫ Beverage vending machine at Expressway SA started full-scale operation. Contributing to our stock
sales.
⚫ Steadily expanding examples of the introduction of the mobility field (our center connection) such as
bus and railway.

Expand stock-model revenue by
providing FinTech/money services③

Expand profit points through the use of
IoT data⚫ Introduction of handsets to multiple industries progresses, building a business foundation that does
not depend on specific franchisees.
⚫ Steady progress in acquiring large-scale member stores and introducing handsets, steadily
expanding recurring revenue.
⚫ Established a virtuous-cycle growth model with business expansion supporting the acquisition of new
major franchisees.

3① Acquire large accounts through expansion of alliances with QR, points, etc.
⚫ Promote the development of house points at railway-related commercial facilities (department
stores, shopping centers, etc.) ⇒ Gradual expansion to railway companies nationwide.
⚫ Supporting web-based application operations from franchised stores to credit card companies.

⚫ Ongoing preparation forcontinued growth

4① Increase added value by strengthening processing center functions⚫ In addition to our internal DX, contributes to improving operational efficiency between merchants
and credit card companies.
⚫ Major retailers subscribe to the transaction inquiry web.
Copyright (C) 1999 GMO Financial Gate, Inc.

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23

Action Plan： 1

2

3

4

3.2 Payment terminals(excluding IoT)-Progress status
Steady progress in cultivating affiliated stores regardless of industry or size.
Steady Accumulation of Forecasts for the Next Fiscal Year
◼ No. of active terminals * Payment terminals (excluding IoT)
（単位：千台）End of Q4

End of Q1

End of Q2

End of Q3

End of Q4

End of Q1

End of Q2

End of Q3

QoQ

YoY

FY2021

FY2021

FY2021

FY2021

FY2022

FY2022

FY2022

(%)

(%)

36.7

45.4

56.8

68.7

83.0

95.4

111.6

（Unit :Thousands）

FY2020

Launched stera

Payment
terminals

30.3

+16.2

+54.8

(+17.0％)(+96.5%)(excluding IoT)

+6.4

+8.7

+11.4

◼ Major forecast

+11.8

+14.4

+12.4

+16.2

◼ Rough image of incremental active terminals of“Payment terminals (excluding IoT)”+
Fast food / Restaurant

Pharmacy/
Drug store+

Public service agency

+
+
+

Hotel

Shopping center / Mall+

Airport+10～15kRailway-relate
Shopping center

Baseball stadium

Accumulated at least 10～15k units of payment
terminals excluding IoT each quarter
Copyright (C) 1999 GMO Financial Gate, Inc.

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24

Action Plan： 1

2

3

4

3.3 Expansion of GMO-FG Platform ～penetrating into small amount payment domain～
Progress in cashless operations at educational institutions such as universities and highschools. Steady Expansion of Our Platform Offering Scenarios
Small amount payment

Police station/
Drivers’ license center

Small amount payment(Tokyo)City office hall

Enable to pay various fee bycashless method

Delivering across Japan

Small amount payment

Mobility domain

Store-type of merchants

Visa NFC touch payment in thescenes such as train/bus
Small amount payment

New

School/Educational institutions

Has been delivering to
the merchants withoutbias in industry and size
In addition to traditional type of register, we arealso promoting to provide cashless solutions with・Self-checkout register at ¥100 shop

Small amount payment
Delivering terminals to the stores・Mobile catering in stadiumand cafeterias in University /Our cashless platform is expanding
High school
by delivering cashless services in small amount payment field

Copyright (C) 1999 GMO Financial Gate, Inc.

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25

Action Plan： 123

3.4 Expansion of GMO-FG Platform ～Progress of mobility domain business～
In addition to a recovery in inbound demand in the future, the introduction of new bills and theholding of the Osaka Expo are expected to lead to the development of cashless operations in
the mobility field◼ Settlement Volume in the Mobility Business◼ Current Mobility Area Trial Areas(Latest Single Month)

Increase the volumeof payments*High-speed bus
companies aremarked only intheir head officelocations.

Expected to expand due to factors
such as:① Recovery in inbound demand② Introduction of new bank notes③ Osaka Expo

Spread according to
topics ① to ③ on the left

A B C D E F G H I

Expansion of
introduction
companies

J K L M N O P Q R S T U V

Company A to V: Railway companies, bus companies, etc.

Although penetration status varies, it is expected
to expand in the future
Copyright (C) 1999 GMO Financial Gate, Inc.

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26

4

3.5 Status of ESG Initiatives as a Cashless Platform Company
Started considering the determination and disclosure of supply chain CO2 emissions. Aiming tocontribute to the realization of a sustainable society through the promotion of cashless payments■Supply Chain CO2 Emissions• Framework categorized in SCOPE1 to three set out in the GHG (Greenhouse Gas) Protocol, aninternational standard for accounting and reporting CO2 emissions
Summary• Emissions that are the sum of emissions (SCOPE3) related to business activities, as well as CO2
emissions (SCOPE1 and 2) from the company's own operations as a result of electricity and fueluse

■GMO-FG Supply Chain
Upstream

GMO-FG

Scope3
Procurement, Manufacturing, Distribution
Payment terminal

Roll paper

Downstream

Scope1
Fuel
combustion

Scope2
Electricity
consumption

Not applicable

OfficeProcessing center

Scope3Use, Disposal
Use of payment
terminals

Disposal of
payment terminals

Scheduled to be disclosed in stages from those identified
Aiming to identify CO2 emissions in the terminal manufacturing and disposal processes incooperation with payment terminal manufacturers, etc.
■Schedule for Measuring Supply Chain CO2 Emissions
2022

Jul

Aug

Sep

2023

Oct

Nov

Dec

Measuring CO2 emissions based on our own standards

Jan

Feb

Mar

Apr

May

Jun

Acquisition of external certification
Copyright (C) 1999 GMO Financial Gate, Inc.

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27

4. Financial Highlights

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28

4.1

Profit & Loss

Gross profit grew at a low level compared to sales due to a higher percentage of sales from stera
handsets, which have a higher cost of sales ratio, compared to the previous 3Q. SG&A-to-sales
ratio declined due to cost management(Unit: Thousand)

Q3 FY2021
Cumulative（actual）

Q3 FY2022
Cumulative（actual）

YoY

Revenue

4,837,219

7,446,363+53.9%

COGS

3,330,792

5,511,729+65.5%

Gross profit

1,506,427

1,934,633+28.4%

SG&A

1,039,790

1,370,897+31.8%

Operating profit

466,636

563,736+20.8%

Ordinary profit

467,782

562,966+20.3%

Profit attributable to ownersof parent

311,637

358,129+14.9%

Copyright (C) 1999 GMO Financial Gate, Inc.

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29

4.2

Revenue by business model (YoY)

In the face-to-face settlement market following the lifting of the ban-prevention system, in addition
to the steady accumulation of the number of active handsets. Steady expansion of recurring
revenue contributed by recovery
Initial

Stock

Fee

SpreadStock-model revenue
2,211
Composition
708

9.5%

882

11.9%

621

8.3%

5,235

70.3%

（millions of yen）

Stock-model revenue
Stock-model revenue
Composition 1,352
11.6%
7.2%
9.1%

72.0%

560

+63.5％ YoY

350
442

3,483

Q3 FY2021
cumulative

Initial revenue+50.3％ YoY

Q3 FY2022
cumulative
Copyright (C) 1999 GMO Financial Gate, Inc.

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30

4.3

Revenue by business model (Quarterly)

Successful build-up of demand led to expansion of initial sales. In addition, unlocking theprotection is a tailwind, and stock sales are also growing
SOE①

②

③

④

4/7~5/25

1/7~3/21

4/23~6/21

7/12~9/30（millions of yen）

Q1 FY2020
standalone

Q2 FY2020
standalone

Q3 FY2020
standalone

Q4 FY2020
standalone

Q1 FY2021
standalone

Q2 FY2021
standalone

Q3 FY2021
standalone

Q4 FY2021
standalone

Q1 FY2022
standalone

Q2 FY2022
standalone

Q3 FY2022
standalone

Initial

626

693

451

465

855

1,103

1,525

1,682

1,455

1,643

2,137

430

427

495

569

687

683

841

Recorded advances Launched stera
terminal sales
367
333
391

Stockmodel

363

Stock

110

118

128

132

136

146

160

182

186

206

229

Fee

75

70

80

80

101

99

149

183

262

259

361

Spread

178

180

125

179

193

182

186

203

239

218

251

2,252

Seasonality &
COVID
2,141
2,327

2,978

1st State of Emergency

Total

990

1,061

784

856

1,286

1,531

2,020

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31

4.4

Balance sheet

Secure product inventory based on forecasts of settlement terminals. Merchandise inventory is
expected to remain at the same level in the future

End of Q3 FY2022（Thousands of yen）
Cash & Cash equivalents(36.2%)

2,231,184

Current liabilities

1,575,252
Non-current liabiliries

29,829Merchandise (Payment terminal)

1,545,066
Total equity(73.9%)
Other current assets

4,552,136

884,270◼ Comments• Merchandise: Decreased by about
1 billion yen from the end of 2Q.
Continue to implement appropriate
inventory management while
keeping an eye on sales forecasts
and procurement market
conditions• Cash and deposits: Increased byabout 600 million yen from the endof 2Q due to steady handset sales

Non-current assets

1,496,696
Asset

Debt
Copyright (C) 1999 GMO Financial Gate, Inc.

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32

4.5

Consolidated KPIs（No. of Active Terminals）

Settlement terminals (excluding IoT) drove growth. Steady expansion of affiliates by cancelling
Man Prevention(Unit:FY2020

FY2020

FY2021

FY2021

FY2021

FY2021

FY2022

FY2022

FY2022

QoQ

YoY

Thousand)

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

(%)

(%)

27.7

30.3

36.7

45.4

56.8

68.7

83.0

95.4

111.6

+16.2

+54.8

(+17.0％)(+96.5％)

26.1

28.0

29.1

30.9

33.6

39.8

42.3

43.2

44.6

+1.4

+11.0

(+3.2％)(+32.7%)

13.6

14.4

14.9

16.7

16.7

16.4

17.9

17.7

18.0

+0.3

+1.3

(+1.7％)(+7.8%)

67.3

72.7

80.7

93.1

107.2

124.9

143.2

156.3

174.2

+17.9

+67.0

(+11.5％)(+62.6%)

Payment
terminal(excluding IoT)

IoT

Alliance
partner sales

Total

Copyright (C) 1999 GMO Financial Gate, Inc.

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33

5.

Appendix

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34

Business Model

GMO-FG Business Domain
GMO-FG is focusing on offline payment（リアル店舗決済 ＋ IoT決済）

Company nameBusiness
Domain

GMO Financial Gate
(Payment at Brick & Mortar + IoT)

GMO Payment Gateway(EC)

Payment by passing card/QR code over
the reader

Payment by entering credit card
information in PC / mobile phone

Payment
methodMediumEC (terminal is unnecessary)

Payment terminal• Physical hardware network• Proprietary programming code specifications• Regulation

Copyright (C) 1999 GMO Financial Gate, Inc.

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35

Business Model

Rev Models: Financial Gate vs. Payment Gateway
Initial revenue in offline payment is tend to be fluctuate because of its seasonality of terminal
delivery

PG

FG
Revenue

Revenue

N

N+1

N+2

N+3

N+4

Time

Time
N

N+1

N+2

N+3

N+4

Initial Revenue（Terminal Sales・Software Development）

Initial Revenue（Initial Set up Fee, etc…）

Stock, Fee, Spread Revenue

Stock, Fee, Spread Revenue

Copyright (C) 1999 GMO Financial Gate, Inc.

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36

Business Model

Three Biz Models Over a Single, One-Stop Platform
One-stop platform covering all settlement processes between merchants and acquirers
Consumer

Merchants

FG

Various
Payment
Methods

Terminals

1
Payment
Terminal

Various Payment
Methods

Acquirers

Terminal Sales
Business

Credit Card
IssuerFlow Revenue

Bank

Payment
Terminals

Payment
Scene

RetailRestaurants

Service

Mobilityetc

2
Payment
Processing

Metered Parking
EV Meter
etc

E-Money Vendors

Points Vendors

Vending Machines/
Coffee Machines
Checkout Machines(Country Club/
Hotel)

Payment
Processing

Stock Revenue

IoT

Purchase

Payment Processing
Business

3
Comprehensive
Clearing

Acquiring
Business

Clearing

QR CodePayment
Vendors

Stock Revenue

Copyright (C) 1999 GMO Financial Gate, Inc.

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37

Business Model

Stock Revenue Expansion Originating From Terminal Sales
Stock revenue grows with flow model revenue which is mainly coming form the sales of payment
terminals%

Revenue Model

3 Business

4 Types of Revenue

Flow Model Rev① Terminal Sales
Business

Initial

70.3％

Stock

8.3％

Fee

11.9％

Spread9.5％(Q3 FY2022 cumulative)② Payment
Processing
Business

Stock Model Rev③ Acquiring
Business

Copyright (C) 1999 GMO Financial Gate, Inc.

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38

Business Model

Players in offline cashless payment setting
Sales activity to merchants/Clearing of merchant transaction
offlinePayment Processing
CenterMerchants

Offline market
POS vendor

Terminal manufacturer
Domestic makerOverseas maker

Processing center (CCT)

Payment
Network

Domestic network

Acquirer

International network

Card company
Bank etc

Legacy POS
Mobile POS

Vending machine manufacturers /Self checkout register manufacturers

Financial
Institutions

Payment Brand
ASP center (POS)
E-money center

Code payment gateway

Int’l card brandE-money
Domestic code payment
Foreign code payment

Acquiring Partner
Mobile POS

Our monetization points
Initial Revenue
Stock Revenue※Activation of payment terminals～Connect to our processing center

Alliance partner

Fee Revenue※Booked in stock revenue occasionally depending on contract type※Excluding roll paper sales
Copyright (C) 1999 GMO Financial Gate, Inc.

Spread Revenue
All Right Reserved.

39

Business Model

Image of rise in Rev & OP
Phase1: Focus on sales/activation of payment terminals and revenue will be fluctuated.
Phase2: Expansion of Stock-Model revenue
Phase 1

Phase 2

Increase of Market Share (approx. up to 2025)

Revenue: Increase at a CAGR of 25% or more, although the extent of increase willvary from period to period

16,00014,000Rise in Profit Margin

RevenueOP

12,00010,000

Sales may fluctuate significantly fromperiod to period

8,000

6,000

Operating income: Continue to grow 25% or more
every fiscal year

4,000

2,000

0

Copyright (C) 1999 GMO Financial Gate, Inc.

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40

Business Model

Leveraged Growth Model
Fee and spread revenue are expanding with the market /growth in membership merchants

Leveraged Growth
N＋1
Stock revenue

N
Stock revenue

Stock-Model Revenue
SpreadLinking with the growth of
TAM / membership merchants

Fee
Stock revenue
before N-1

Stock
Q1
1Q

Q2
2Q

Q3
3Q

N期

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

N+1期

Q4
4Q

Q1
1Q

Q2
2Q

Q3
3Q

Linking with the number ofaffiliated merchants

Q4
4Q

N+2期

N-1期（ストック）
Stock

Fee
N-1期（フィー）SpreadN-1期（スプレッド）

N期（ストック）
Stock

Fee
N期（フィー）

SpreadN期（スプレッド）Stock
N+1期（ストック）

Fee
N+1期（フィー）SpreadN+1期（スプレッド）
Copyright (C) 1999 GMO Financial Gate, Inc.

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41

Business Model

Details on each revenue ①
InitialContent

Payment
terminal sales

This is a sales revenue of payment terminals from merchants or credit cardcompanies.
All of first, we purchase hardware from manufactures. And confirm certain
measures of payment methods that each merchant needs to accept. Then
make these methods to connect to our processing center（Occasionally, we
put some customization to these terminals)

Softwaredevelopment

It is a type of development that meets customers needs such as widening
acceptable payment measures and adding point-payment functionality

Stock

Rev Model

Content✓ Since software development is tailor
made type revenue, deal size and margin
vary from time to time

Rev Model

It is a service that provides merchants with their daily sales data that go
through our processing center. We charge it as monthly fixed fee

Points＆QR

It is a service to add point/QR payment app to the terminals merchants have.
We charge it as monthly fixed fee• No. of contracts × Service Price

Rental(Mobileterminal)

It is a service to rent mobile type terminals that enable merchants to usethem in wireless setting. We charge it as monthly fixed fee

Mobile SIM

It is a SIM card fee to use mobile type terminals. We charge it as monthly
fixed fee(Monthly fixed fee
model)✓ There’re around 10 types of terminals✓ Price range is from about ¥20K up to¥100K• No. of Deals × Ordered value

Data sharing

Processing• Terminal Selling Price × Units Sold

✓ Service price is around ¥500 to ¥1K
per terminal per month• No. of contracts × Monthly FixedFee

It is a processing fee based on monthly fixed rate
*Basically, it is defined as “Fee” revenue when it comes to the case we charge as Pay As You Go billing, not fixed rate

✓ Monthly fixed fee will vary depending on
the size of contract etc..

Generally, the economics of services above vary depend on merchants. And there are services that some merchants do not apply
Copyright (C) 1999 GMO Financial Gate, Inc.

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42

Business Model

Details on each revenue ②
Fee

Content

Processing

It is a fee we charge toward monthly transaction volume based on the rate pertransaction

Sales ofroll paper

This is a sales of roll paper that is used with payment terminals at stores

SpreadAcquiring（Settlement
agent）

Rev Model• TRX Volume× Processing Fee✓ Processing fee is about ¥2 to ¥3 pertransaction• No. of Order × Price of Roll Paper

content✓ The price range of roll paper is about¥130 to ¥200.

Rev Model

We charge spread fee (α) towards clearing amount tomerchants
We received indicator rate (N) from acquirers, then we acquire
merchants instead of acquirers with the new rate (N+α＝merchant fee)

GMV of Agent Contract
×
Spread fee we charge (about 0.3～0.4%)

Copyright (C) 1999 GMO Financial Gate, Inc.

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43

Business Model

Relationship Between Spread Revenue and GMV
We do not necessarily generate spread revenue for every transaction. This is due to the fact thatcredit card companies have historically acquired major participating merchants on their own.
Therefore, we calculate spread revenue as GMV × Take Rate × Contribution Ratio◼ Direct Contract

Enjoyable Revenue
Payment Processing

Payment Processing

InitialMerchant Fee

Stock

Clearing

Fee

Merchant

Acquirer◼ Agent Contract（*Clearing amount for Agent Contract ÷ GMV＝Contribution Ratio）
Payment Processing

Spread Revenue (B)Payment Processing

InitialStock

Remittance (A-B)

Clearing Amount (A)Fee

Merchant Fee

Merchant（In cases where participating merchants pay
membership fee to acquirers directly）

SpreadAcquirer

Copyright (C) 1999 GMO Financial Gate, Inc.

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44

Business Model

Relationship between number of active terminals & stock rev.
In addition to the increase in the number of active terminals, revenue opportunities for Stockrevenue will increase, but the status of subscriptions to paid services will differ depending on
the needs/demand of merchants
Merchants（Acquisition opportunity image of Stock revenue）

Terminals we offer

Stock Revenue
Non-Stock Revenue
Floor-Standing Model

Mobile Modelmerchant B
merchant A

Embedded Model

POS Model

merchant C

The status of subscriptions to paid
services that contribute to Stockrevenue varies depending on the typeof merchants and terminals.

merchant D

merchant F
merchant E
Copyright (C) 1999 GMO Financial Gate, Inc.

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45

Business Model

Monetization by Payment Method
We operate different business models according to payment method as a cashless platformer.
Growth in each payment method contributes to our growth as well
Flow model revenue① Initial

Stock model revenue➁ Stock③ Fee④ Spread

Credit・China Union Pay・J-debit

E-moneyー

QR code

ー

Point

ー

ー

House point・House E-money

ーー

Duty exemptionーー

Copyright (C) 1999 GMO Financial Gate, Inc.

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46

Business Model

Revenue Model by Merchant Size
We mainly acquire medium- to large-sized merchants through alliances with major financial
institutions. We mainly acquire small merchants (=long tail segment) through our subsidiaries◼ Four types of revenue model① Initial

Terminal sales, Softwaredevelopment, Initial
registration fee, etc…

➁ Stock

Monthly recurring revenue,
communication fee of terminals,
etc…

③ Fee

Processing revenue related to
TRX volume, Receipt paper
sales, etc…

④ Spread

Commission fee based on TRX
value◼ Revenue model related to the size of merchant

Large

①

➁

③

④

Medium

①

➁

③

④

Small

①

➁

③

④

Copyright (C) 1999 GMO Financial Gate, Inc.

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47

Business Model

Medium-Term Strategy Acquiring major merchants by focusing on alliances
Meeting customer needs through enhanced credit payment functions and alliances with QR /points vendors

CreditE-money

QR

J-debit

Point

House point/House E-money

Duty exemption

Terminals we offer

Floor-Standing Model

Mobile Model

Embedded Model

POS Model*Alliance partner terminals

Cashless Platform

Copyright (C) 1999 GMO Financial Gate, Inc.

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48

Business Model

TRX-increase through cashless penetration
TRX volume & value tend to go up in a few months to six months after the merchants
introduced cashless payment for the first time

◼ Merchant A（Tokyo） Monthly TRX trend

25000000

TRX Volume

6000

TRX Value

20000000
4000

15000000
10000000

Merchant

Cash only ⇒ Introduce cashless
payments

2000

5000000
0

N

N月

N+1

N+1月

N+2

N+3

N+2月

N+3月

N+4

N+4月

N+5

◼ Merchant B（Miyagi）Monthly TRX trend
800000TRX Volume

Consumer

500

400

400000Recognize convenience（Successful experience⇒change in payment method）

600

TRX Value

600000300
200200000

100

0

0
N

N月

N+1

N+1月

N+2

N+2月

N+3

N+3月

N+4

N+4月

◼ Merchant C（Wakayama）Monthly TRX trend
9000000

N+5月

TRX Volume

Merchant

TRX volume/value
per terminal will increase

500

TRX Value

400
300

700000200
500000Stock-Model revenue will increase

100

300000

0
N

N月

N+1

N+1月

N+2

N+2月

N+3

N+3月

N+4

N+4月
Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

49

Market Environment

TAM (Total Addressable Market)
Transaction Value of cashless (face-to-face) payment is expanding rapidly, as the value of IoT /Unattended◼ Offline TRX value in Japan
Private sector final
consumption
expenditure in
Japan (includes
cash payments)◼ Potential market value of IoT/Unattended
Potential market size for
IoT/Unattended (ourprediction)¥278 trillion*2(2020)* Due to the spread of coronavirus infection
Dropped to the same level as during the Lehman shock¥30 trillion*3(2020)¥128 trillion*1(2025)¥0.1
trillion¥95 trillion*1(2022)GMO Financial Gate TRX value
in IoT/Unattended business¥1.2
trillion

Market foroffline cashless(face-to- face) payments

GMO Financial Gate TRX value(FY2021 Actual)◼ To achieve ¥1.5 billion in operating profit for FY2024：
Expand IoT/Unattended business driven bycontactless payment (touch payment) and unattended
registers(*1) Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Current Status and Future Forecasts for Online Payment Service Providers, 2018, Yano Research Institute Ltd.
(*2) Source: Cabinet Office, Government of Japan(*3) GMO Financial Gate internal forecast based on statistical data published by the Cabinet Office, Government of Japan, the Japan Vending System Manufacturers Association, and the Japan Parking Business Association(*4) Source: Japan Ministry of Economy, Trade and Industry

Copyright (C) 1999 GMO Financial Gate, Inc.

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50

Market Environment

Growth trend of domestic offline cashless market
The market for offline cashless payments is currently ¥92 trillion, six times larger than the
online market. Cashless penetration is expected to rise to as much as 80%, driven by
government-led cashless policies（Unit : trillion yen）
Offline cashless market size (Left axis)
140

80%

Online cashless market size (Left axis)

80％

Cashless penetration rate (Right axis)
127.7

70%

Long-term

116.3

120

60%

105.7

94.5

100

50%
80

83.4

79.3

40％

40%

32.5%

60

30%
29.7%

40

20

20%
19.3

20.8

21.8

23.0

24.3

25.7
10%

0

0%
2020(A)

2021(E)

2022(E)

2023(E)

2024(E)

2025(E)

Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Yano Research Institute Ltd.

Copyright (C) 1999 GMO Financial Gate, Inc.

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51

Market Environment

Composition Ratio of Domestic Cashless Payment Methods
Even in an environment of significant growth in the proportion of QR codes, transaction value
and volume of credit continue to growTransaction Value
Composition

Transaction Volume
2019

2020

2021

Credit

89.7%

86.8%

85.3%

Debit

2.1%

2.5%

E-money

7.0%

QR code

1.2%

2019

2020

2021

Credit

60.7%

58.2%

55.3%

2.8%

Debit

1.8%

2.3%

2.5%

7.0%

6.3%

E-money

33.1%

27.1%

22.8%

3.7%

5.6%

QR code

4.3%

12.4%

19.4%

(trillions of yen)(100 million)

Transaction value

120
CreditE-money

Debit

1.0
1.7
5.8

3.2
2.1
6.1

CreditQR code

5.3
2.7
6.0

60

40

73.8

74.9

Transaction volume

30

100

80

Composition

81.4

20

E-moneyDebit

QR code

25
4.9
20

0.8
0.4

15

6.2

2.7
0.5
5.9

0.7
5.7

10

5

11.4

12.7

13.9

2019

2020

2021

0

0
2019

2020

2021

Source: Cashless Roadmap 2022, Cabinet Office of Japan

Copyright (C) 1999 GMO Financial Gate, Inc.

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52

Market Environment

IoT/Unattended Market Growth
The number of terminals is expected to be equal to or greater than the market for payment
terminals in real stores. Unattended market (= general term for vending/service machine
market) is expected to expand further due to changes in the external environment such as adecrease in the working population◼ No of active IoT terminals

4.5 million

Grew slightly due to the time-lag between terminal
sales and activation even though the terminal
sales stays solid◼ Push factors associated with changes inthe external environment• Declining workforce• Labor-saving support
Unattended

Goods/
commodities

Tickets

Beverages/
sweet treats

MarketSelf-checkoutmachine(Golf/Hotel)

39.8（Unit : Thousands）• Obtaining inbound demand• Retailers moving into offices• Revision of the Pro-Sales Act• COVID-19

CoffeeMetered parking/
EV chargers

Self-checkout
register

26.1

28.0 29.1

30.9

42.3 43.2

44.6

33.6

21.5

14.1

Coin-operated
washing
machines

Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022

OfflineMarket

4 million
Source: The Japan Vending System Manufacturers Association, Japan Ministry of Health Labor and Welfare, Yano Research Institute Ltd.

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

53

Market Environment

Trends in the number of foreign visitors to JapanThe number of foreign visitors to Japan decreased sharply due to the Corona, but we are also
focusing on preparations for a recovery in demand（10 thousand）
6,000
訪日外国人数The number of foreign visitors

6,000
Government’s target
by 2030

5,000

Hotel/Travel

Drug store(medicine/cosmetics)

High-end
retail/Department
store

One dollar
shopService/
LeisurePublictransportation(Train/bus etc.)

4,000

3,000
Achieved back in 2018

3,000

2,000

Medical / Clinic

1,000

2030年
2030

2022
2022年

2021年
2021

2020
2020年

2019
2019年

2018年
2018

2017
2017年

2016
2016年

2015年
2015

0

Aggressively acquiring inbound-related merchants
aiming to enjoy the demand after COVID
Source: JNTO

Copyright (C) 1999 GMO Financial Gate, Inc.

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54

Growth Strategy

Strategy to Maximize TRX Value
We created a new payment processing route with alliance partners. This route increases GMV,
as the route reduces costs to participating merchants and acquirers

RetailRestaurants

Acquirers

Conventional
RouteMerchants
Competitor/Peer
Terminals
Processing
Center

Payment
Network

1

2
Credit Card
IssuerVending
Machines
MeteredParking/
EV Meters

New GMO FG
RouteServices

New Terminal
Modeletc.・・・

Reduced costs toparticipating
merchants

Cost Reduction

Bank

compared to conventional route

gateway
Global payment network◼ Cost savings via new route leads to

Reduced costs to acquirers

improved competitive capability of alliance partners
Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

55

Growth Strategy

Strategy to Maximize TRX Value
Maximize GMV through a new processing network and by pursuing B-to-B alliances(*1)

Offline Cashless (face-to-face)Market (2025 E)

TRX value: ¥111 trillion/year

Offline Cashless (face-to-face)Market (2021 E)

TRX value: ¥92 trillion/year

Continuous Growth

Aim to achieve
more than

18x+α TRX

Alliance partner
VJA (Visa Japan) Group,
including Sumitomo Mitsui
Card Company, Limited

TRX value：¥22 trillion/year

GMO-FG

TRX value：¥1.2 trillion/year

value in 10 to 15
years

(*2)

approx.

18x

2021

2030～2035(*1) Source: Cashless Roadmap 2019, PAYMENTS JAPAN; Current Status and Future Forecasts for Online Payment Service Providers, 2018, Yano Research Institute Ltd.
(*2) Source: VJA

Copyright (C) 1999 GMO Financial Gate, Inc.

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56

Growth Strategy

Growth Strategies for 2025 and Beyond
For 2025 and beyond, we aim to grow stock-model revenue in the payment-related field.
Aim at a continuous 25% growth in OP through business diversification：High inbound tourism demand

Image of service expansion

Area of focus

OP (100 million yen)

Money services / Payment related New Biz• Fintech (Lending / Factoring / BNPL etc.)

Profitability increase phase100
Data service• DX/marketing support using payment data

OP of 25% or more
Continuation of growth curve
Money services/Payment related New Biz

Diversification of alliancestrategies

IoT (Mobility)• Contactless payment processing fortransportation systems (trains, buses, etc.)

Data service

IoT (Vending / checkout machines)

Stock-Model Revenue

Market share increasephase• With & post COVID-19 / labor-saving / selfservice support

IoT (Mobility)

Payment terminals (excluding IoT) / Payment processing / Acquiring

15
Payment Center• Continue to acquire a balanced
member merchant base, regardless of
size or industry, as our businessfoundation

Payment terminals(excluding IoT)

Payment terminals (excluding IoT) / Payment
processing / Acquiring

Initial & Stock-Model

IoT (Vending /checkout machines)

Time
2021

2025

2035

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

57

Growth Strategy

Data Services in the IoT Domain
Started providing payment data service for merchandise vending machines, contributing tostock-model revenue. Supporting merchants' operational efficiency improvement andsophistication (DX) using data
Appropriate stock replenishment and cash
collection

Vending machine operator

IoT
Payment
terminals

payment processing

Start providing data sharing service to merchandise
vending machines for food service (ramen, gyoza, etc.)⇒Contribution to stock-model
revenueAchieve efficient staffing andfood loss reduction

Vending
machinemanufacturer

DX Support

Provide payment data (sales
information)

Image of introduction

phase ２DX in member merchants

New

Provide payment data (sales information) to alliance partners⇒Strengthen marketing and increase revenue by using sales
information (product, season, region, etc.)

Provision of payment data (sales information) to vending machine
manufacturers⇒Improve operational efficiency by remotely managing inventory at an
appropriate level

phase 1
IoT payment/acquiring

Payment terminals (IoT)

Provision of IoT platform

Initial &Stock-Model

Payment Center

Stock-Model
Revenue

Present

phase ３
DX in member merchants(sales improvement)

Time
Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

58

Growth Strategy

Alliance Overview
Working with alliance partners allows us to secure participating merchants consistently andsteadily

Alliance Partners

Payment/
Financial
Institutions

Unattended
Terminal
Manufacturers

POS
Manufacturers

GMO Group
Synergies

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

Vending Machines

Metered Parking
EV Meters

Laundries

Entertainment

TravelWholesalers

Real Estate

Occupation/
Vocational Schools

Healthcare/Welfare

Hotels/Inns

Bus/Train

Restaurants

Retail Stores

Merchants

59

Competitive Advantage

Unique Positioning
End-to-end solutions via one-stop platform allows us to create alliances with many players in
the market◼ Solutions in Offline Payment Market
Customization(Customize Payment
Methods)

Adaptation of
Top-End POS
Register Models

Terminal
Settlement

ーー

Payment
Processing

Clearing/
Adjustment

Maintenance/
Support

FG

N
N社

Leading payment

大手決済ネット
network player
ワーク事業者

R
R社

Major operating
大手事業会社
companyーーーー
Using their own registers only

P
P社

Leading payment
大手決済事業者
vendorーーーー

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

60

Competitive Advantage

Barriers to Entry （Regulations to be Followed）

Many kinds of regulations exist in the face-to-face payment market depending on the payment
method, and the number of regulations are increasing. As payment methods become morediversified, the barriers to entry become more challenging

Law

E-money
Regulation

Modified Partial
Revision of the
Installment Sales Act

Brand Test

Credit Card
Regulation

Security Standard

PCI DSS
Global security standard in credit card
industry created by international big 5 credit
card brand, Visa, Mastercard, JCB, American
Express and Discover

Payment Center
Regulation

JCCA Certified
Center

EMV Test
International standard of IC Card created by
Europay, Mastercard and Visa

JCCA：Japan Credit Card Association

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

61

Industry Topics

Government Promotion of Cashless Payments
METI* announced its Cashless Vision policy to encourage cashless payments. We expect
the Japanese cashless market to expand rapidly in response
Events

Impact on our business

4/2018

Announcement of Cashless Vision（by METI）

6/2018

Enforcement of Revised Installment Sales Act

3/2019Implementation plan announced for the security of credit
transactions (by the Council for credit Transaction Security)

10/2019

Cashless Consumer Returns Policy

7/2020

Go To Campaign

9/2020My Number Point

7~9/2021

1/2022

Tokyo Olympic/Paralympic

Demand for cashless terminals
increases as business owners areforced to adopt cashless payment
systems

Payment processing expands in
response to Cashless Consumer
Returns Policy

Demand for cashless terminals
increases due to expanding inboundconsumption growth

My number point, Go To Campaign

Present

9/2024Issuance of new bank notes

4/2025

Osaka Expo

Demand for cashless terminals toincrease due to the cost of new banknote issuance

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

62

Industry Topics

New topic of credit card industry
METI requires fee among credit card companies. Though merchant fee would be lower going
forward, the impact towards our business would be immaterial
Breakdown of MDR（model case：AOV ¥5K SME merchant）

METI requires fee among credit card companies
3.5

Fee among credit card companies is
actually paid by merchants

Brand fee

International
Brands①Brand fee
0.05

Brand fee3

Fee among card companies(Interchange fee)

2.5

2.3%

Card
company(Acquiring)

Card
company(Issuing)

Billing

Reimbursing

Merchant fee

Billing
Rate inlongtail
could behigherthan this②IRF

Reimbursing

1.5

Payment

2.30

2

3.25

Billing

Our monetization points

1

0.16

Goods/Services

Merchants

Consumers➂Remittance fee④Network fee
0.14

0.5

0.3

➄Acquiring fee⑥Others
0.3

0Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

63

Industry Topics

Japan Post Bank started charging on depositing coins
On January 17, 2022, the introduction of a fee-based checkout service for coins began.
Advancing the trend toward cashless operations by headwinds for businesses that handle
large volumes of coins

Coins may disappear Japan Post Bank「Charging-shock」(March 4, 2022 Sankei News paper)https://www.sankei.com/article/20220304-ZTSR67LNFFLLTITPJFJL6D3TZQ/ATMCounterNumber of coin deposit

Cost

Number of coin deposit

Cost

1～25

¥110

1～50

Free

26～50

¥220

51～100¥550

51～100^330

101～500

¥825

ー

ー

501～1,000¥1,100After above、every 500¥550

Limitation : 100 (in each time)

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

64

Industry Topics

Situation of the new case of COVID
Q3 is recovering following the lifting of the goodwill prevention order issued in Q3. The current
seventh spike of infections is the largest ever, and we will closely monitor the impact.
The number of daily test positive case of COVID

Seventhspike

250,000

200,000

150,000

Q2

Q3

Q4

100,000

50,000

22/07

22/06

22/05

22/04

22/03

22/02

22/01

21/12

21/11

21/10

21/09

21/08

21/07

21/06

21/05

21/04

21/03

21/02

21/01

20/12

20/11

20/10

20/09

20/08

20/07

20/06

20/05

20/04

20/03

20/02

20/01

0

Source : Ministry of Health, Labor and Welfare
Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

65

Industry Topics

Initiatives for terminal-less payments

Implemented various measures to prepare for future handset-less payments. Strengthening
Initiatives in the Mobility Domain and Beverage Vending Machines.
Status of Our Efforts
Tap to Phone

Dec 2021～ NewStarted handling touch settlement of JCB at Nagaden-bus

NFC tagging touch payment

Planning to launch in FY2022

Aiming to provide services with major food manufacturers

NFC tag on vending machines

Dec 2020～

New

Terminal-less

Automatic connection
to the internet byholding a smartphone

Select productNo app is needed

Launched handset-less NFC-touch payment service with Soft Space

Pay with biometrics
Merchandise receipts

Settlement completed(Apple Pay, Google Pay)

High Security
Tap to Phone: Mobile payment service where merchants do not need to prepare cash registers and terminals for payments, and NFC-enabled devices can be used as payment reception terminals.
NFC: An abbreviation for Near Field Communication, a communication standard that can be communicated using contactless IC chips and simply by holding them over.
NFC tag: Tags that allow NFC-enabled devices and devices to perform various operations simply by holding up an NFC-enabled smartphone.

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

66

Share holder Structure

Share holder structure
Maintain the ratio of institutional investors both overseas and domestic, even when stock
prices adjust from the end of 2021
Shareholder Composition
100.00%80.00%

60.00%

22.20%

21.87%

1.65%
6.93%

1.54%
6.35%

11.84%

13.19%

Shareholder composition excluding
GMO Payment Gateway

30.7%

50.9%

14.8%

40.00%
3.6%
57.38%

57.05%

20.00%

Retail Investors
個人投資家・その他

Domestic
国内機関投資家
Institutional
Investors

Other
その他法人
enterprise

Foreign Institutional
海外機関投資家
Investors

0.00%

End
of Sep 2021
2021年9月30日時点

End
of Mar 2022
2022年3月31日時点

GMOペイメントゲートウェイ
GMO Payment Gateway

個人投資家・その他
Retail Investors

その他の法人Other enterprise

海外機関投資家
Foreign Institutional Investors

国内機関投資家
Domestic Institutional Investors

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

67

Governance / ESG

ESG Initiatives
Announced ESG initiatives to improve our social activities. We are planning to strengthen our
initiatives and announcement

Disclosure contents

SDGs items

ESG
Initiatives

Environment

・Use of recycled paper as receipts

・Use of recycled paper as receipts
・Promoting paperless
・Appropriate inventory management through the use of payment
data (reduction of food loss)

Announced on Creating an eco-friendly society
Jul 15thSocial・Providing a variety of vocational training programs
・Preparing sufficient welfare programs
・Promoting work-style reform etc…

Human Resources, Vocational Training/Welfare Program, Work-style Reform

Governance

Planning to enforce
corporate governance onward

Basic Principles, Board of Directors, Executive
Officer Meeting, Audit and Supervisory Board,
Director Compensation, Investor Relations
Reference URL https://gmo-fg.com/news/8d448cfaba24ece540af1ae2a83d95c2.pdf

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

68Governance / ESG

ESG Initiatives
Appointed a new external director and established Nomination and Compensation Committee
to provide a skill matrix for our executives. Continuously work to strengthen the governancesystemNomination and Compensation Committee

Skill matrix

https://gmo-fg.com/ir/153d49bfef329b9dfa8e005c510a3475.pdf

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

69

Company Profile

Affiliated Companies
GMO-FG serves in offline face to face payment market as a consolidated subsidiary of GMO-PG.

GMO INTERNET GROUP（Internet infrastructure business）

GMO PAYMENT GATEWAY（Online payment/Payment section of GMO internet group）

Consolidated

GMO EPSILON100%

GMO PAYMENT SERVICE

100%
Equitymethod40%

57.3%（Online payment/Longtail）（Online payment/Deferred payment）

SMBC GMO PAYMENT（Online/Offline payment/）

GMO FINNCIAL GATE

（Offline payment）

Consolidated

100%

51%

GMO CARDSYSTEMGMO DATA

Consolidated subsidiary

Sumitomo Mitsui Credit Card

（Offline payment/Longtail）（Payment processing center）

49%

Copyright (C) 1999 GMO Financial Gate, Inc.

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70

Company Profile

Company Profile■Company

GMO Financial Gate, Inc.（TSE Growth Ticker:4051）■Foundation■Address■Stock Capital■Major Shareholder■Board Member

September 1999
Humax Shibuya Building 7F, Shibuya Dogenzaka 1-14-6, Tokyo¥1,618 Million
GMO Payment Gateway, Inc.
Representative Director, President
Kentaro Sugiyama
Director, Chairman
Akira Takano
Director
Akio Aoyama（Sales Division Executive Manager）
Director
Masamitsu Ikezawa（Administrative Division Executive Manager）
Director
Tomonaga Fukuda（System Division Executive Manager）
Director
Tatsuya Koide（GMO Payment Gateway, Inc. Chief Managing Executive Officer）
External Director
Nao Shimamura
External Director
Rie Asayama
External Auditor
Takayoshi Nagasawa
External Auditor
Satoru Ozawa
AuditorTakashi Iinuma（CPA)■Auditing Firm
■Subsidiary

Ernst & Young ShinNihon LLC
GMO CARD SYSTEM, Inc. shareholding ratio:100％
GMO DATA, Inc.

■Businessshareholding ratio: 51.0% (Mitsui Card Company, Limited:49.0％）

Cashless payment infrastructure service (credit card, debit card, e-money etc.)

Floor-Standing Model

Mobile Model

Embedded Model

POS Model

Copyright (C) 1999 GMO Financial Gate, Inc.

（As of August 9, 2022）

All Right Reserved.

71

T h a n k

Y o u

GMO Financial Gate, Inc(Tokyo Stock Exchange Growth
IR website

4051)

https://www.gmo-fg.com/ir/

Contact:
TEL：+81-3-6416-3881
E-mail：irpr@mail.gmo-fg.com

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.