Financial Results Briefing for Q3 FY2021
Key Message【 A s t r a t e g y t o m a x i m i z e f u t u r e St o c k - M o d e l r e v e n u e 】
New Normal Initiatives : Expand market share by focusing on sales and activation of payment terminals

August 11, 2021
GMO Financial Gate, Inc.
(Ticker:4051, TSE-M)

Fifth IR Presentation
https://www.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 11, 2021
Note that presentation material content is subject tochange without prior notice in response to changes inthe business environment or other unforeseen
circumstances

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2

Meeting agenda

1. Summary of Financial Results for Q3 FY2021
2. Growth Strategy and Progress
3. Financial Highlights
4. Appendix

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3

1.

Summary of Financial Results for Q3 FY2021

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4

1.1

Q3 FY2021 Summary

Overachieved revenue and profit targets even under
prolonged COVID-19. All initiatives are making solid progress
P6•

Progress（toward FY2021 forecast）：Revenue：92.2%

OP：79.1%‐ Revenue：Q3 cumulative ＋70.6% YoY

Financials/KPIs(largely surpassed original FY2021 forecast of＋30% YoY)

‐ OP
P12

•

：Q3 cumulative ＋12.0% YoY(OP increased YoY as planned by absorbing special factor in 1H of FY2020. On a full year basis, we
expect growth of +30% YoY in OP as previously disclosed)

Payment Terminal‐ No. of active terminals increased steadily with strong terminal
sales (Q2→Q3：＋14.1K)

Comments

P16•

Upwardly revised revenue forecast for FY2021：¥5,249M→¥6,500M (＋23.8％)•

Extended operating domain in IoT by expanding alliances with business partners•

Recruiting is on schedule. Making steady progress to strengthen corporate organizational
structure for FY2022 and beyond•

Announced ongoing ESG initiatives. Planning continuous enhancement andannouncement
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1.2

Summary of Financial Results

Recorded +92.2% progress toward FY2021 forecast, driven by strong
terminal sales. Profit and KPIs are also making steady growth
FY2020Q3 cumulative
actualFY2021Q3 cumulative
actualRevenue

2,834

4,837

＋70.6%

5,249

92.2％

Gross profit

1,297

1,506

＋16.1%

1,894

79.5%

Operatingprofit416

466＋12.0%

589

79.1％

Profitattributable toowners ofparent238

311+30.5%

368

84.5％(Millions of Yen)

KPIs
(YoY)

YoY (%)(announced on May 12) (announced on May 12)*cumulative basis

FY 2021
Forecast

Progress toward
FY2021 Forecast

No. of Active Terminals

TRX Volume

TRX Value(End of Q3)(Q3 only)(Q3 only)

107,182

Approx. 38.5 million

Approx. 314.1 billion(1.6x)(2.1x)(2.2x)

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6

1.3

Major Topics Regarding Financial Results

Revenue increased more than forecast due to strong terminal sales while
profit increase is on schedule due to an increase in the sales compositionof low-margin stera, but market share increased steadily
Revenue（+70.6％ YoY）

（Unit: Millions of Yen）

5,000

4,000

After considering
special factors
YoY＋78.4％【Special Factor】
Software development incashless-point business

3,000

124

◼ Revenue(＋)Initial revenue increased due to sales increase of terminals, mainly stera(＋)Stock-Model revenue increased due to acquisition of new merchants acrossmultiple industries and growing demand for IoT/Self-checkout registers
triggered by COVID-19(±)Software development related to points payments continued from FY2020◼ Gross Profit(＋)Revenue growth(－)Increase in the composition ratio of low-margin stera in Initial revenue(－)Relatively moderate growth of Spread revenue having high gross margin
ratio (because of the prolonged COVID-19 pandemic)
Gross Profit（+16.1％ YoY）

4,837

After considering
special factors
80 YoY＋23.7％

2,000

2,834

2,711

1,000
1,297

1,218

1,506

◼ Operating Profit(±)Recruiting to enhance corporate organizational
structure
Q1～Q3:+16 employees（Consolidated basis）(＋)Continuing proper cost management
Operating Profit（+12.0％ YoY）
80

416

0
Q3 FY2020
Cumulative

Q3 FY2021
Cumulative

Q3 FY2020
Cumulative

Q3 FY2021
Cumulative

336

Q3 FY2020
Cumulative

After considering
special factors
467＋38.7％ YoY

Q3 FY2021
Cumulative

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1.4

Revenue by business model

Terminal sales, mainly stera, contributed to the growth of Initial
revenue. Stock-Model revenue also grew mainly in Fee revenue
thanks to an increase in the number of active terminals
FY2020Q3 cumulative
actualFY2021Q3 cumulative
actualComposition
Ratio*cumulative basis

Initial

1,770

3,483

72.0％

+96.8％

Stock-Model

1,064

1,352

28.0%

+27.1%

Stock

356

442

9.1％

+23.9％

Fee

225

350

7.2％

+55.4％

Spread

483

560

11.6％

+16.3％

Total

2,834

4,835

100.0％+70.6％(Millions of Yen)

Amid COVID-19 crisis※Under first SOE

Amid COVID-19 crisis※ Under third SOE

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YoY (%)All Right Reserved.

8

1.5

Revenue by business model (Quarterly)

Terminal sales accelerated. Despite prolonged COVID-19
pandemic, revenue in all business models made steady growth
QoQ through acquisition of new merchants across a variety ofindustries
SOE①(Millions of Yen)

Initial②③

FY2020Q1

FY2020Q2

FY2020Q3

FY2020Q4

FY2021Q1

FY2021Q2

FY2021
Q3

Alone

Alone

Alone

Alone

Alone

Alone

Alone

855

1,103

1,525

626

693

451

Recorded advanced
terminal sales

465
Launched stera

Stock

110

118

128

132

136

146

160

Fee

75

70

80

80

101

99

149

Spread

178

180

125

179

193

182

186

SOE

SOE

SOE

Total

990

1,061

784

856

1,286

1,531

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2,020

9

1.6

Stock-Model (Current conditions / Action plans)

Strengthen each action plan to maximize future Stock-Modelrevenue(Millions of Yen)

Apr-Jun 2020
Under first SOE

Apr-Jun 2021
Under third SOE

FY2020Q3

FY2021
Q3

Alone

Alone

YoY (%)

Current conditions• Monetization

Stock

Fee

128

80

160

149

+25.0%+85.6%

Future action plans• Further promote WEB Data

Sharing service

opportunities are
increasing due to anincrease in the No. of
active terminals• Increase the number of• Pay-as-you-go system• Maintain growth of the No.

contracts related to
Points/QR paymentof active terminals
charge and roll-paper
sales are increasing due • Acquire “small payment”
to an increase in TRX
merchants with large
volumetransaction volume• Acquire merchants in IoT• Recording steadySpread125

186

recovery despite+49.4%
prolonged COVID-19*Compared to the revenue
figures largely affected
pandemic
under the first state of
emergency

domain（Payment machines, Ticket
machines, Self-checkout registers,etc.）• Acquire merchants inclinics/medical industry

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1.7

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

TRX Value

6000

20000000
4000

15000000

10000000

Merchant

Cash only ⇒ Introduce cashless
payments

2000

5000000
0

0
N月

N+1月

N+2月

N+3月

N+4月

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

500
400

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

600

TRX Value

600000300
200200000

100

0

0
N月

N+1月

N+2月

N+3月

N+4月

◼ Merchant C（Wakayama）Monthly TRX trend
900000Consumer

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月

N+1月

N+2月

N+3月

N+4月
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1.8

Consolidated KPIs (No. of Active Terminals)

No. of active terminals, mainly stera, went up steadily. IoT also
accelerated due to the self-service/labor-saving trend. Alliancepartner sales remained flat because all order backlog was fulfilled（Unit: Thousand）

Payment
terminal

FY2020

FY2020

FY2021

FY2021

FY2021

QoQ

YoY

Q3

Q4

Q1

Q2

Q3

(%)

(%)

+11.4

+29.2

(+25.1％)(+105.5％)

+2.7

+7.5

(+8.6％)(+28.9%)

+0.0

+3.2

(+0.0％)(+23.5％)

+14.1

+39.9

(+15.1％)(+59.3％)

27.7

30.3

36.7

45.4

56.8

IoT

26.1

28.0

29.1

30.9

33.6

Alliance
partner sales

13.6

14.4

14.9

16.7

16.7

Total

67.3

72.7

80.7

93.1

107.2

(excluding IoT)

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1.9

Consolidated KPIs (Quarterly TRX volume/value)

Despite prolonged COVID-19 pandemic, TRX volume andvalue surpassed our target (+50% YoY) as we acquired
merchants in a wide variety of industries and delivered moreterminals than Q2◼ TRX Volume40

2.1x YoY

SOE◼ TRX Value（Unit : Million)

3,500

35

SOE

2.2x YoY

SOE（Unit：100 Million Yen）

3,000
SOE

30

2,500
25
2,000

20
1,500

15

②

①

③

④

10

①

②

③

④

FY2021Q2

FY2021Q3

FY2021Q4

1,000

FY2020Q1

FY2020Q2

FY2020Q3

FY2020Q4

FY2021Q1

FY2021Q2

FY2021Q3

FY2021Q4

FY2020Q1

FY2020Q2

FY2020Q3

FY2020Q4

FY2021
Q1* The number of merchants installing cashless payment terminals is increasing as cashless payment is considered
as a safer payment method than cash amid the COVID-19 crisis. Despite the declaration of the third SOE, weobserved steady growth in TRX volume/value as we are successfully acquiring merchants in a wide variety ofindustries.
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1.10

Consolidated KPIs (Monthly TRX volume/value)

We experienced seasonality in Q2 but returned to growthtrend in Q3. Successfully continued to grow even undercontinued SOE◼ TRX Volume◼ TRX Value

SOE

SOE

（Unit：100 Million Yen）

（Unit : Million)

14

1,200
SOE

12

SOE

1,000

10
800
8
600

Seasonality
+
SOE

6

400

4
2

①

②

③

④

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul*TRX volume from Jan 2020 to Jun 2021

Seasonality
+
SOE

200

①

②

③

④

0
1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月 1月 2月 3月 4月 5月 6月 7月*TRX value from Jan 2020 to Jun 2021

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1.11

Comparison of growth (Market vs GMO FG)

With overall TRX value in Apr & May of FY2020 being at a low level due
to 1st SOE, all industries secured high YoY growth (＋10～30%) in
FY2021. GMO FG maintained higher growth than the industry average
Left Axis ：TRX Value YoY
Right Axis：GMO FG TRX Value (Monthly)
400（Unit：%）GMO FGAll

Other retailers

Restaurants

SOE①

Hotels/Inns（Unit : 100 million Yen)
1,200

SOE③

SOE②

1,000
300
800

260
216

215

234

193

216

211

200
186

186

108

183

192

153
160

100

203

202

148
110

111

113

113

97

102

91

82

84

143
130
122

93

98

101

400

124
110

97

600

136
140

96

99

176

173

190

194

91

200

0

0
Oct

Nov

2019～

Dec

Jan

Feb

2020～

Mar

Apr

Mar

Jun

Jul

Aug

Sep

Oct

Nov

Source: Ministry of Economy, Trade and Industry

Dec

Jan

Feb

2021～

Mar

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May

Jun

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1.12

Upward Revision to FY2021 Revenue Forecast(no revision to profit forecast)

Revenue：¥6,500M（Progress toward previous forecast:92％. Reflected business forecast for 4Q）
Profit：No Revision（Considering ①Increase in ratio of stera to total revenue, ②COVID-19
impact, ③Future investment）（Millions of Yen）

FY2020
Full year
actualFY2020
Full year
forecast(Before revision)

FY2020
Full year
forecast(After revision)

YoY(After revision)% Change(Vs. before
revision)

Revenue

3,691

5,249

6,500

＋76.1%

Gross profit

1,617

1,894

1,894

－

Operatingprofit

452

589

589

－

－

Profitattributable toowners ofparent

291

368

368

－

－

Earnings per
share¥79.84¥91.27¥91.22－－

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+23.8％
RevisedAll Right Reserved.

－

16

2.

Growth Strategy and Progress

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2.1

Assessment of Action Plans for OP Growth

Making steady progress in line with our action plans towardachieving our target (operating profit of over ¥1 billion in
FY2024) while maintaining CAGR of over 25%
around*Actual*J-GAAP
TargetFY2020*Forecast

FY2021OP¥0.45 billion ¥0.59 billion

GMV¥0.6 trillion¥1.0 trillion

FY2024FY2025

FY2035Over¥1 billion¥1.5 billion¥10 billion¥5 trillion¥30 trillion◼ Mid-to long-term strategy (2025～)◼ Action Plans and Progress（assessment of action plans）
1① Acquire high-growth participating merchants across various industries by delivering
the next generation models of multi-payment terminals⚫ Steady installations and activations of payment terminals⚫ Accumulating orders of terminal sales steadily for FY2022⚫ Launched stera mobile. Plan to release another new model in near future①

Maintain YoY growth of over 25%
in revenue and operating profit
through diversified alliances (interms of payment methods,
functions, and merchant acquisition
channels)②

Increase Stock-Model revenue by
focusing on finance-related
businesses③

Expand monetization of points by
utilizing data from the
IoT/Unattended business

2① Expand IoT/Unattended business by promoting contactless payment (touch payment)
and unattended⚫ Enhancing alliance and development with vendors of parking lot checkout machines⚫ Projects with dollar store chains for self-checkout registers and with major vending
machine manufacturers are in progress

3① Acquire major participating merchants by promoting alliances with QR businesses/② e-point issuers⚫ Increasing the number of new alliances related to e-wallet/e-point payments⚫ Preparation for the promotion of QR payment services in IoT domain is underway

4① Reinforcement of payment processing center functions⚫ Expanding and improving payment data sharing services⚫ Upgrading back-office functions (billing and payments, etc.)⚫ Providing alliance partners with DX services⚫ Ongoing preparation forcontinued growth
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2.2

Image of rise in Rev & OP

Increase of Market Share：Focus on terminal sales/activation
Rise in Profit Margin：Increase of Stock-Model revenue
Phase 1

Phase 2
Increase of Market Share

Rise in Profit Margin

16,00014,000

RevenueOP

12,000

Revenue may fluctuate from year to year
10,000depending on terminal sales, etc.
8,000

6,000

4,000

2,000

0

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19

2.3

Strategy to Maximize TRX Value

Action Plan:

1

2

3

4

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

Vending
Machines
MeteredParking/
EV Meters

New GMO FG
RouteServices

New Terminal
Modeletc.・・・

Reduced costs toparticipating
merchants

Major Cost Reductions

CreditCard
IssuerBank

compared to conventional route

gateway
Global payment network

Reduced costs toacquirers◼ Cost savings via new route leads toimproved competitive capability of alliance partners
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Action Plan： 1

2.4

2

Global Payment Network Progress

3

4

Achieved terminal sales target in FY2020. Visible forecast in
Q4 is around 10K. Accumulating backlog FY2021 as well
◼ No. of active terminals *Payment terminals (excluding IoT)
（単位：千台）（Unit : Thousands）

FY2020

FY2020

FY2021

FY2021

FY2021QoQ

YoY

End of Q3

End of Q4

End of Q1

End of Q2

End of Q3

(%)

(%)

36.7

45.4

56.8

+11.4

+29.2

(+25.1％)(+105.5％)

Payment
terminals

Launched stera

27.7

30.3

(excluding IoT)

+2.6

+6.4

◼ Backlog forecast in Q4

+8.7

+11.4

Accumulating backlog beginning in thenext fiscal year and onward

14000
12000
10000
8000

•

Accumulating backlog across a variety ofindustries•

In addition to new type of business in the longtail, released new type of mobile terminal andwiden our products lineup

6000
4000
2000
0

Q1（actual）

Q2（actual）

Q3（actual）

Q4（forecast）

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Action Plan:

2.5 Expansion of stera lineup (stera mobile)

1

2

3

4

Launched mobile type of stera to enable payments at such
wireless settings as on the doorstep of consumers or at tables
in stores. This type of mobile terminals are needed nowadays
to avoid contact with others especially under the COVID-19
pandemic■stera mobile
stera mobile is ALL in ONE payment terminal that allows us toenjoy the functionality of stera terminal. This is portal/mobile
payment terminal which satisfies the needs of merchants byproviding wireless (LTE) function■Usage scenes
Payment at tables in restaurants, payment at apparel boutiques
while attending a customer, payment on the doorstep ofcustomers, etc.
ALL in ONE payment terminal「stera mobile」

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22

2.6

IoT/Unattended Market Growth

Action Plan:

1

2

3

4

The number of machines in the unattended market (e.g., vending
machines, service machines) exceeds that of the offline market.
The unattended market is expanding rapidly due following factors:

4.5 million
Unattended
Market*Number of vending
machines, ticket machines, etc.

Goods/
commodities

CoffeeOfflineMarket◼ Factors that accelerate
IoT/Unattended

Tickets

Beverages/
sweet treats

Metered parking/ Self-checkout
EV chargers
register

4 million

Self-checkoutmachine(Golf/Hotel)

・Decline in labor force
・Push for unattended
systems
・Inbound demand
・In-office vending
machines becoming
more popular
・Amendments to theSales Act・COVID-19◼ No of active IoT terminals

Steady growth
+0.3

3.4

3.1

（Unit：10 thousand）

2.9
2.8
2.6
2.2
1.4

Coin-operated
washing machines

Q1

Q2

Q3

Q4

Q1

Q2

Q3

FY2020

FY2020

FY2020

FY2020

FY2021

FY2021

FY2021*Number of registers,
terminals, etc.
Source: The Japan Vending System Manufacturers Association, Japan Ministry of Health Labor and Welfare, Yano Research Institute Ltd.

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23

2.7

Action Plan:

Progress of IoT/Unattended

1

2

3

4

Launched projects with several parking lot checkout machine
vendors. The project with major beverage vending machine
vendors for the next generation terminal is expanding inapplication mainly in merchandise vending machines
In progress

Rev ModelMar

To be launched

Hotels/Golf courses

Flow
Stock

Parking lot
checkout machines

Flow
Stock

Ticket machines

Flow
Stock

Self-checkout registers

Beverage vending
machines/coffee machines

2022

2021

Jun

Sep

Dec

StatusMar

Delivered approximately 40K terminals
Fee revenue from active terminals
Expanding to agent contract businessStarted installation of terminals at a major parking lot
operator
Stock, fee and spread revenue from active terminals
DX
DX: Digitalize parking tickets and integrate
online reservation & payment
Demand is expanding due to new normal policies under
COVID-19 promoted by Japanese government
Stock revenue is growing with new functions madeavailable to all e-money brands
QR codeFlow

payment
Started installation of terminals at major restaurant chains,grocery store chains

Stock

Securing stock and fee revenue from active terminals*No change fromprevious status*No change fromprevious status

Stock

Started installation of terminals at major operators(settlement/maintenance of vending machines)
Securing stock and spread revenue from active terminals
DX
DX: Optimize stock delivery route and merchandise mix

New Topic

Making solid progress in the
project with a major parking
lot operator. Also promoting
collaboration with otherparking lot operators

Making solid progress ininstallation of terminals at
highway service areas in
Kansai region. Launch of QR
code payment will be
postponed until after Dec*No change fromprevious status 2021

New Topic

Started full-scale installationof self-checkout machines at
a dollar store chain. Plan tooffer new services forunattended stores in*No change from workplace
previous status

Flow

Making solid progress in newagent contract business forhotel checkout machines.
Plan to accelerate installation
both at new and existing
merchants

New Topic

Application of next generation
terminals developed with major
beverage vending machine
vendors is expanding mainly inmerchandise vending machines(new domains such as noodle /*Previous status : 〇 dumplings)

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24

3.

Financial Highlights

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25

3.1

Action Plan： 1

Profit & Loss

2

3

The sales of stera terminal increased steadily in Q3. Q3 COGS ratio
increased due to revenue increase and higher stera terminal sales.
SG&A growth was lower in comparison to sales growth due to costmanagement measures◼ Q3(stand-alone)◼ Q3(cumulative)

Q3
FY2020Q3
FY2021Q3
FY2020Q3
FY2021(Stand-alone）(Stand-alone）(cumulative）(cumulative）

Revenue

784,131

Revenue

2,834,885

4,837,219+70.6%

COGS+264.4%

COGS

1,537,238

3,330,792+116.7%

526,819+40.8%

Gross profit

1,297,646

1,506,427+16.1%

303,107379,095+25.1%

SG&A

881,176

1,039,790+18.0%

Operating profit

70,997

147,724+108.1%

Operating profit

416,469

466,636+12.0%

Ordinary profit

64,734

148,233+129.0%Ordinary profit

400,084

467,782+16.9%

Profit attributableto owners ofparent41,221

100,001+142.6%

Profit attributableto owners ofparent

238,834

311,637+30.5%%
change(Thousands of Yen)

2,020,904+157.7%410,027

1,494,086

Gross profit

374,104

SG&A(Thousands of Yen)

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4

3.2

Balance sheet

Holding adequate cash by stable cash flow.
Total equity is over 60% out of total assets. Financial status is stable
Q3 FY2021（Thousands of Yen）

Cash & Cash equivalents(54%)

3,594,441

Current liabilities

2,368,388
Non-current liabilities

43,423

Other current assets

Total equity (64%)

1,853,948

4,262,134◼ Highlighted Points• Holding approximately ¥3.6 billionof Cash & Cash equivalents eventhough there is 1.2 Deposits
Payable in Current liabilities• Securing adequate stock of stera
terminal towards its sales forecast(Terminal Stock: ¥1.1 billion out of
Other current assets)

Non-current assets

1,225,558
Asset

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

All Right Reserved.

27

3.3

Revenue by Business Model (YoY)

Revenue grew YoY＋70.6％. Terminal sales mainly stera led initial
revenue Q3. Stock-Model revenue well-balanced grew tied with
the increase of the number of active terminals
6,000（Millions of Yen）

◼ Highlighted Points
5,000+70.6％

4,000

561
349
442

11.6%
7.2%
9.1%

3,000

2,000

1,000

483
225
356
1,770

17.0%
7.9%
12.6%

3,483

62.5%

0

Q3 cumulative
FY2020InitialStock

Q3 cumulative
FY2021
Fee

72.0%• The component % of Initial went up
to 9.5%. Initial revenue was drove
up by terminal sales mainly stera• Though the component % of
Stock-Model revenue (Stock, Fee,
Spread) dropped down, absolutevalue itself grew steadily due to theincrease of the number of active
terminals as well as transactions• As for Spread revenue, continuing
New Normal Initiatives and now
successfully recovering to the level
as it was before

SpreadCopyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

28

4. Appendix

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

29

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
methodMediumPayment terminalEC（terminal is unnecessary）

・Physical hardware network
・Proprietary programming code specifications
・Regulation

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

30

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

PG

FG
Revenue

Q1

Revenue

Q2

Q3

Q4

Q1

Time

Q1

Q2

Q3

Q4

Q1

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.

Time

All Right Reserved.

31

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

Various Payment
Methods

Acquirers

Terminal Sales
Business

Payment
Terminal

Credit Card
IssuerFlow Revenue

Bank

Payment
Terminals

2

Retail Restaurants

Payment
Scene

Service

Mobility
etc

Payment
Processing

IoT

Purchase

Payment
Processing

E-Money
Vendors
PointsVendors

Stock Revenue

Vending Machines/
Coffee Machines

3

Checkout Machines(Country Club/
Comprehensive
Hotel)
Clearing
Metered Parking
EV Meteretc

Payment
Processing
Business

Acquiring
Business

Clearing

QR CodePayment
Vendors

Stock Revenue

Copyright (C) 1999 GMO Financial Gate, Inc.

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32

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

3 Businesses① Terminal
Sales
Business

4 Types of Revenue
InitialOne-time revenue via
terminal sales

Stock

Monthly recurring revenue
via active terminals

Fee

Processing revenue via
transaction volume

SpreadSpread revenue via
transaction value② Payment
Processing
Business

Stock Model Rev③ Acquiring
Business

Copyright (C) 1999 GMO Financial Gate, Inc.

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33

Leveraged Growth Model
Fee and spread revenue are expanding with the market /growthin participating merchants
Leveraged Growth
N＋1
Stock revenue

N
Stock revenue

SpreadExpanding stock revenue
with the market/growthin participating merchants

Fee
Stock revenue
before N-1

Stock
1Q

2Q

3Q

N期

4Q

1Q

2Q

3Q

N+1期

4Q

1Q

2Q

3Q

4Q

Stock revenue linked withaffiliated stores

N+2期

N-1期（ストック）

N-1期（フィー）N-1期（スプレッド）

N期（ストック）

N期（フィー）

N期（スプレッド）N+1期（ストック）

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

All Right Reserved.

34

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

Content

Data sharing

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

Rental(Mobile terminal)

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

Processing

It is a processing fee based on monthly fixed rate

(Monthly fixed fee model)*Basically, it is defined as “Fee” revenue when it comes to the case we charge as Pay As You Go billing, not fixed rate

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.

All Right Reserved.

35

Details on each revenue ②
Fee

Content

Processing

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

Sales ofroll paper

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

SpreadAcquiring（Settlement agent）

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

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

36

Relationship Between Spread Revenue and GMV
We do not necessarily generate spread revenue for every transaction.
This is due to the fact that credit card companies have historicallyacquired 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.

All Right Reserved.

37

TAM (Total Addressable Market)
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)¥111 trillion*1(2025)

TRX value ofvending machines¥73B*4(2020)¥92 trillion*1¥18B(2021)GMO Financial Gate TRX value
in IoT/Unattended business¥1.0
trillion

Market foroffline cashless(face-to- face) payments

GMO Financial Gate TRX value(FY2021)◼ To achieve ¥1.5 billion in operating profit for FY2024：
Expand IoT/Unattended business driven by contactless
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.

All Right Reserved.

38

Market Growth of Offline Cashless (face-to-face payments)
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
80％

¥222
trillion

120

100（Unit：trillion yen）

96.7

50.0%

91.9
86.3
81.6

80

40.0%

73.8
64.5

60

Long-term
vision

60.0%

32.5%

59.6

30.0%
29.7%

Around 2025

30.9%
20.0%

21.3%

20.0%

¥111
trillion

26.8%

24.1%
40

40％

20

10.0%

0

0.0%
2016

2017

2018
Offline Cashless TAM

2019

2020

2021（E）

2022（E）

Offline Cashless Penetration

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

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

39

Composition of Cashless Payment Methods
While cashless payments have become more diversified, credit
card use is still high E-commerce composition ratio declined,
QR code increased◼ TRX value of cashless payment◼ Credit card brand share in Japan (2020)（Unit：trillion yen）

100

Credit card

Debt card

E-money

QR codeCashless penetration（Right axis）

80
60
40
20

0.2
5.5
5.1

4.2

1.1
5.8

5.2
24.1%

26.8%

50.0%

6.0

40.0%

29.7%

30.0%

3.1 0.3 0.1

20.0%

20.0%

21.3%

53.7

58.2

66.8

73.0

73.8

2016

2017

2018

2019

2020

0

17.8

10.0%
0.0%

50.8

28.0

◼ Composition of cashless payment methods
100.0%

8.5%

8.0%

0.2％

1.4％

4.9％

7.4%

7.1%

7.0%

80.0%
60.0%

40.0%

90.0%

90.5%

90.3%

89.5%

85.5%

VISA
Master
DinersJCB
AMERICAN・EXPRESS
UnionPay

20.0%
0.0%

2016

2017
Credit card

2018
Debt card

2019
E-money

2020
QR code*Source: Ipsos Financial Service*Source: Ministry of Economy, Trade and industry

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

40

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

22x+αAlliance partner
VJA (Visa Japan) Group,
including Sumitomo Mitsui
Card Company, Limited

TRX value in 10
to 15 years(*2)

TRX value：¥22 trillion/year

approx.

GMO-FG

22x

TRX value：¥1.0 trillion/year

2021

2030年～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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41

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
Events4/2018

Our BusinessAnnouncement 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

Present

7～9/2021

Tokyo Olympic/Paralympic

9/2024Issuance of new bank notes

4/2025

Osaka Expo

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

Payment processing expands in
response to Cashless Consumer
Returns Policy

Demand for cashless terminals
increases due to expanding
inbound consumption growth

Demand for cashless terminals
to increase due to the cost of
new bank note issuance

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

42

Unique Positioning
End-to-end solutions via one-stop platform allows us tocreate 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ーー

ワーク事業者

R
R社

Major operating
大手事業会社
company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.

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43

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 more diversified, thebarriers to entry become more challenging
E-money
Regulation

Law
Modified Partial
Revision of the
Installment Sales Act

Brand Test

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
CenterCredit Card
Regulation

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.

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44

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.

All Right Reserved.

45

Revenue Model by Merchant Size
We mainly acquire medium- to large-sized merchants throughalliances 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 ofterminals, etc…

◼ Revenue model related to the size of merchant

Large

①

➁

③

④

Medium
③ FeeProcessing revenue related
to TRX volume, Receipt
paper sales, etc…

④ Spread

Commission fee based on
TRX value

①

➁

③

④

Small

①

④

Copyright (C) 1999 GMO Financial Gate, Inc.

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46

Medium-Term Strategy

Acquiring major participating 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

Duty exemption

House point/House E-money

Terminals we offer

Floor-Standing
Model

Mobile Model

Embedded Model

POS Model*Alliance partner
terminals

Cashless Platform

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

47

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

Alliance Partners

Payment/
Financial
Institutions

Unattended
Terminal
Manufacturers

POS
Manufacturers

GMO Group
Synergies

Copyright (C) 1999 GMO Financial Gate, Inc.

Vending Machines

Metered Parking
EV Meters

Laundries

Entertainment

TravelWholesalers

Real Estate

Occupation/
Vocational Schools

Healthcare/Welfare

Hotels/Inns

Bus/Train

Restaurants

Retail Stores

Merchants

All Right Reserved.

48

Accelerating business in mobility
We are entering into the mobility domain (smaller payments than othertypes of consumption), offering Cashless Platform x Touch Payments
April 2021～◼ Fukuoka City Transportation Bureau Launched trial ofticket buying service via VISA touch payment（Partners: SMCC,
Aquabit Spirals, QUARDRAC, Toppan Printing, VISA, THE BANK OFFUKUOKA, GMO-PG）Source: GMO-FG HP
April 2021～◼ Nankai Electric Railway Began accepting VISA touch payment.
Trial started in limited area!（Partners: Nankai Electric Railway、
SMCC、QUADRAC、VISA）Source: Nankai Electric Railway HP

April 2021～◼ HOKUTO KOTSU First adoption of Visa touch-payment in public
transportation in Hokkaido (Partners: SMCC, QUADRAC, ODAWARA
AUTO-MACHINE MFG, Hokkaido Atlas, Visa Worldwide Japan) Source:
HOKUTO KOTSU HP
December 2020～◼ Fasstap (allied with Soft Space) Started providing NFC
payment without terminals Source: GMO-FG HP

November 2020～◼ Kyoto Tango Railway (managed by WILLER) First time in Japan!
Adoption of Visa touch-payment in railway ～Ride with a simple touch!
More convenient fare payments (Partners: SMCC, QUADRAC, Visa Worldwide Japan,
SMBC) source: WILLER HP

July 2020～◼ Ibaraki Kotsu (managed by Michinori HD) Cashless payments
on highway buses for the first time in Japan! Adoption of Visa
touch-payment in buses (Partners: SMCC, Visa Worldwide Japan, ODAWARA
AUTO-MACHINE MFG)

Cashless Platform

Source: Michinori HD HP

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

49

stera Network Real-World Implementations(November 20, 2020)(July 21, 2020)

First adoption of Visa Touch for public
transportation in Japan (highway bus operated by
Ibaraki Kotsu)

First adoption of Visa Touch in railways. Ride
with a simple touch! Kyoto Tango Railway is
Earliest Adopter◼ First-ever adoption of Visa Touch payment for public
transportation in Japan (Katsuta Tokai-Tokyo Line highway
bus operated by Ibaraki Kotsu).

◼ WILLER, SMCC, QUADRAC, Visa Worldwide Japan and
SMBC launched a cashless payment service offering Visa
Touch readers for use in railways for the first time in Japan.
Kyoto Tango Railway became the first company to adopt
this service◼ Pay bus fare by simply touching eligible credit cards or
smartphones on readers. New system provided by SMCC
and Visa Worldwide Japan utilizing the stera platform
offered by SMCC
◼ Visa Touch payment expected to be used in more than 500
cities worldwide in the future. Already implemented in New
York, London, Singapore, and Sydney. More recently, public
transportation in Brussels, Bratislava, Bucharest, Hong Kong,
Sant Domingo, and Torino have started to accept Visa Touch*Source: Impress Watch◼ This Visa Touch system, commonly used overseas, is now
available for Japanese railways, offering rapid payment
processing of the type in high demand for speedy
payments in Japan◼ The service allows daily commuters and visitors from othercountries to pay with credit cards, eliminating the need tobuy train tickets. With wider adoption, public
transportation will become much more convenient for all*Source: WILLER Inc. HP

Copyright (C) 1999 GMO Financial Gate, Inc.

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50

Affiliated Companies
GMO-FG serves in offline face to face payment market as aconsolidated subsidiary of GMO-PG
GMO INTERNET GROUP（Internet infrastructure business）

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

GMO EPSILON

100%（Online payment/Longtail）

GMO PAYMENT SERVICE

100%
Equitymethod65%

Consolidated

Consolidated

40%（Online payment/Deferred payment）
Consolidated subsidiary

SMBC GMO PAYMENT（Online/Offline payment/）

GMO FINNCIAL GATE

（Offline payment）

100%

Global Card System*

Sumitomo Mitsui Credit Card

（Offline payment/Longtail）*Corporate name will be changed as “GMO Card System on Oct 1st 2021

51%

GMO DATA（Payment processing center）

49%

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

51

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

Announced
on Jul 15th

Environment
Creating an eco-friendly society

・Use of recycled paper as receipts
・Use of recycled paper as receipts
・Promoting paperless etc…

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

・Providing a variety of vocational training programs
・Preparing sufficient welfare programs
・Promoting work-style reform etc…

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.

52

New topic of credit card industry
METI requires fee among credit card companies. Thoughmerchant fee would be lower going forward, the impact
towards our business would be immaterial
METI requires fee among credit card companies
Fee among credit card companies is
actually paid by merchants
Brand fee
Brand fee
International
BrandsFee among card companies(Interchange fee)

2.3%

Card
company(Acquiring)

Card
company(Issuing)

Billing

Reimbursing

Merchant fee
Billing
Rate in longtail
could be higher
than thisPayment

Reimbursing

Billing

Goods/Services

Merchants

Consumers

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

53

Company Profile■Company

GMO Financial Gate, Inc.（TSE Mothers■Foundation■Address■Stock Capital■Major Shareholder■Board Member

September 1999
Humax Shibuya Building 7F, Shibuya Dogenzaka 1-14-6, Tokyo¥1,594 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 Fukunaga（System Division Executive Manager）
Director
Masaru Yoshioka（GMO Payment Gateway, Inc. Executive Officer）
External Director
Nao Shimamura
External Auditor
Takayoshi Nagasawa
External Auditor
Satoru Ozawa
AuditorTakashi Iinuma （CPA)■Auditing Firm
■Subsidiary

Deloitte Touche Tohmatsu LLC
Global Card System, Inc. shareholding ratio:100％ Scheduled to change trade name to GMO Card System Co., Ltd. on October 1, 2021

GMO DATA, Inc.
■Business

Ticker:4051）

shareholding 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（As of August 11, 2021）

Copyright (C) 1999 GMO Financial Gate, Inc.

All Right Reserved.

54

T h a n k

Y o u

GMO Financial Gate, Inc(Tokyo Stock Exchange Mothers
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.