Supplementary Information
Financial results briefing for the Q2 of FY2019

May 10, 2019
GMO Payment Gateway, Inc.
(Code: 3769, TSE-1st Section)

https://corp.gmo-pg.com/

The Growth track record: KPIs & Business results
FY2018 revenue reached ¥26.4bn and OP ¥6.5bn（unit: mil. JPY）

（unit: mil. JPY）

（unit: mil. JPY）

*1

Revenues

30,00026,41725,0009,000

Operating Profit

8,000
7,000

6,550

EBITDA

*2

7,516

8,000
7,000

+25.5％

6,000

20,000+65.9％+58.9％

6,000

5,000

5,000
4,000

4,000

3,000

IFRS

J-GAAPIFRSJ-GAAP

Operating Stores *3

TRX Volume

TRX Value

133,199

1.57 billion¥4.1 trillion

2019/9E

2018/92017/92016/92015/92014/92013/92012/92011/92010/92019/9E

2018/92017/92016/92015/92014/92019/9E

2018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/9J-GAAP

2013/90

2012/900

2011/91,000

2010/91,000

2009/92,000

2008/9

5,000

2,000

2009/93,000

10,0002008/915,000IFRS（*1）The group commenced voluntary adoption of IFRS in FY2018. The figures for the FY2017 have been re-calculated on the same basis.
（*2）EBITDA under J-GAAP is calculated as the sum total of operating profit, depreciation and amortization; and under IFRST is calculated as sum total of operating profit
and depreciation.
（*3）The number of operating stores is at the end of March 2019. Transaction Volume and transaction value are the figures of April 2018 to March 2019;transaction volume and transaction value include the figures of GMO Financial Gate Group.

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

2Three business segments
Continuing above-25% OP growth from expansion ofmainstay payment processing and its peripheral businesses
Payment enhancement
決済活性化事業
business
Online advertising service
Asia payment enhancementbusiness (MK)*and others

Sales
Breakdown
12%（Actual data as ofcumulative Q2 FY2019）

17%

18％

24％

Operating Profit
breakdown

58％

83%
Payment processing
business

Money金融関連事業
Service Business（マネーサービスビジネス）(MSB)

Online payment
Recurring payment
Card-present payment(GMO-FG)*
System development
Ginko Pay/Processing

GMO Payment after delivery
Remittance service
Transaction lending
Early payment service
Finance leaseand others

and others※MK: MACROKIOSK, GMO-FG：GMO Financial Gate GroupWe have renamed the “customer support service” to “online advertising services” effective from October 1 st 2018.

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

3

Mutually Enhancing business model
An ecosystem of the main business and the value-added
services that leads to a symbiotic growthPayment processing
demand increase

Payment processing（GP margin 85％）

PaymentProcessing
Business

Money ServiceBusiness
Payment
Enhancement
Business

Merchant growth
Main Business

Value-added services that contribute toexpanding the main business

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

4Payment Processing Business: Our Role
Connecting merchants and payment companies along thekeywords “contract”, “payment data,” and “money flow”
ConsumerMerchant133,199 stores(end of March 2019)EC
BtoB・BtoC・CtoC
Public money/Taxes
NHK, NTA, Automobile
tax, Municipalities

OnlinePC

Our Company & Service

Payment company

Merchants=Our Customers(e.g. Tokyo Met. Gov.)

Subscription
Video streaming
Software, Apparel

40+ Credit cardcompany
Convenience store
E-money
Cash on delivery
Carrier Billing
Online banking
Wallet payment
Account transfer

Service commerce
Smartphone

Digital goods, Donation,Travel, Insurance

35,628 terminals

CardPresent(end of March 2019)
Physical Store

GMO Payment
After Delivery
G lo b a l p a ym en t
BitCoin payment
Apple Pay
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

etc.

5

Revenue structure of credit card payment
Revenues determined by merchant type/size■The four revenue types■Revenues by merchant type/size

Initial (Initial revenue)①

Initial introduction fees
Coefficient: Number of new merchants acquired

Revenue: Number of new merchants acquired
× _Yen (at the time of introduction)

Municipalities
Large Enterprise① ② ③

Stock (fixed monthly revenue)②③

Customer support and maintenance fee
Coefficient: Number of merchants
Revenue：Operating merchants × _Yen

Mid to Large
Enterprises

Fee (Transaction processing revenue)① ② ③ ④

Fee based on transaction volume
Coefficient: Number of payments processed
Revenue：Number of payments processed × _YenStartups④

Spread (Merchant acquiring service revenue)

Fee based on transaction value
Coefficient: Amount of payments processed
Revenue：Amount of payments processed × _%④Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

6

Two types of contracts
We introduced a new contract system and changed the flowof sales proceeds
Direct contract

Payment
processing

Payment
processing

mainly for large companies
and municipalities

Our group
Credit cardcompany

2.8％ charge
Sales proceed

Payment company

Merchant

Representative
contract

0.5% Spread(Merchant acquiring revenue)
2.5％ charge

3.0％ charge

mainly for SME’s but covers
some large companies

Sales proceed

Our group

Sales proceed
Credit cardcompany

3.2％ charge
Merchant*Numbers are provided for illustration purposes only.

(Charge that is applied under directcontracts with payment company)

Payment company
Flow of sales proceed/charge

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

7

Revenue breakdown by business model
Aim for a balanced revenue growth（Mil. yen）

IFRS

J-GAAP

32,00030,00028,00026,000Spread24,00022,00020,00018,00016,00014,000Fee

12,00010,000
8,000
6,000

Stock

4,000
2,000

Initial0
2004/92005/92006/92007/92008/92009/92010/92011/92012/92013/92014/92015/92016/92017/92018/9 2019/9E

2008
201120132014
20152016
Launched
LaunchedLaunched Launched Revamped Launched
Early
OnlinePayment Transaction Earlyservices
PaymentAdvertising
AfterLending
Payment targeting banks
ServiceServiceDeliveryService
GMO-FG and MK*※ MK：MACROKIOSK GMO-FG：GMO Financial Gate Group
Became subsidiaries
We have renamed the “customer support service” to “online advertising services” effective from October 1 st 2018.
TSE
Listing

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

8

Summary of Segments and Business models
We disclose in 3 reporting segments and disclose 4 business models■Segments■Business model
Payment processing

Payment processing
business

Services for banks/Processing

Payment processing（MK）
Initial（Initial revenue）

System development

System development
GMO-FG
GMO payment after delivery

Payment processing (MK)Stock(Monthly revenue)

Transaction lending
Early payment service

Payment processing (MK)

Fee(Transaction
processing revenue)

Shipping service
MACRO KIOSKRemittance service

Payment processing (MK)

Online advertising service
SSL

GMO payment after delivery（Fee）

Shipping service

Finance lease

Paymentenhancementbusiness

Services for banks/Processing
Online advertising service

Remittance service
Money service
business

SSL

Spread(Merchant acquiringservice revenue )GMO payment after delivery (Spread)Transaction lending
Early payment service
Finance lease※MK：MACROKIOSK GMO-FG：GMO Financial Gate Group

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

9Growth potential of Ecommerce market in Japan
Low Ecommerce ratio and higher cash payment ratio thanother advanced countries■Ecommerce ratio

17.9（％）（2017)

Credit Card
usage rate

Debit card

Credit+Debit *usage to private
final consumption
expenditure rate

South Korea

76 ％

19 ％

95 ％

UK12 ％

55 ％67 ％Australia

30 ％25 ％

55 ％

US

26 ％

20 ％

46 ％

18％

-18 ％

16.2

UKUS

15.0

■Card usage to private final consumption expenditure

14.5

Japan

12.5
11.3
10.4

7.0

7.6

8.2

3.6
1.8

4.1

2.1

4.6

2.5

8.2

8.8

7.3

6.0
5.0

9.7

9.2

10.0

5.0

2.8

5.4

5.8

6.4

4.4
3.1

4.8

5.4

5.8

3.7

（2016）

Japan（2016年）

0.0
2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

References：METI. “FY2017 Building infrastructure for information- and serviceoriented Japanese economy and society (Ecommerce market survey)”
U.S. Bureau of the Census. “The 4th Quarter 2018 Retail E-Commerce Sales Report”;
Office for National Statistics ”Retail Sales Index internet sales, March 2019”*Rate = (Amount handled by CC or DC) / Private finalconsumption expenditure* GMO-PG Estimates by referencing CPSS Red Book “Statistics on payment, clearingand settlement systems in the CPMI countries - Figures for 2017”
THE WORLD BANK ”Household final consumption expenditure (current USD)”

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

10

Expanding Scope of Cashless Payment
Cashless payment trends in Japan is our growth accelerator
B2B

B2C

C2C

Enormous market
potential¥1,000 trillion

Narrowly-defined
B2C EC market

Developing market¥1 trillion¥16.5 trillion
EC ratio: 5.8%
（10% CAGR）

OnlineMerchandising

Payment via
internet, etc.

2017
EC rate
5.8%
Market size ¥16.5T

Offline(card-present)

B2B
Credit cardpayment

Service commerce
Digital content

Payment via aterminal in aphysical store

Flea market
app

2020E
2025E
7-8%
15-20%¥22-24T ¥45-50T

Public fund・utility fee
・Local tax¥40 trillion
・National tax ¥66 trillion

Consumer spending¥300 trillion

Flea market*References：METI. “FY2017 Building infrastructure for information- and service-oriented Japanese economy and society (Ecommerce market survey)”. Figures 2020 and after are our estimates.
*MIC “Breakdown of national tax and local tax revenue (FY2018 Budget and Local Government Finance Plan)”*THE WORLD BANK ”Household final consumption expenditure (current USD)”

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

11

Payment processing: Public due & utility payments
We have been cultivating card payments in this field since
the revision of the Local Autonomy Law in 2006
Sapporocity：Local Taxes (Automobile tax, light vehicle tax,Local
governments fixed assets tax, etc.)
Water bill, gas bill, hometown taxetc.
National tax credit card payment website

NHK：National broadcasting subscription fee
End-FY2017 credit card usage: 14.9%（up 1.2％ YoY）

Expansion expected to continue
Building maintenance fee, cram school tuitionfee, parking fee, school meal charge, etc.

Fukuokacity

Tokyo
Aichi pref.
Osaka pref./city*Japan Broadcasting Corporation “Business Report for FY2017”

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

12

Payment processing business: card-present payment market

Rollout of IoT services by incorporating cashless & inbound demand■Card Present payment
GMO Financial Gate delivers payment terminals for physical store payments
Embedded EMV terminals *Amendment of Installment Sales Act:
Replacement demand for IC chip equipped
terminals from the conventional magnetic strips
Tokyo 2020 Olympics:
Cashless payment demands to surge as more
foreign visitors come to Japan

with PIN

with PIN

with PIN

without PIN*EMV: Unified standard for credit cards with IC chip determined by Visa andMasterCard

Future target and potential
Vending machine(Drink/food)

Ticket vendingmachine(Railway company)

Auto payment
machine(Parking, hotel, hospital)

Office coffeemachine

Self check out, EVcharger, goods sellingmachine, laundromat,
touch pad for orders*These illustrations do not necessarily imply plans for future implementations.

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

13

Payment processing business: Ginko Pay
We aim to increase sign-ups by banks/companies, interconnect and create an infrastructure■Ginko Pay
A service targeting financial institutions; Ginko Pay is a smartphone app systemthat allows for immediate & direct debit from the bank account.
Resona GroupThe Hokuriku Bank

The Hokkaido BankJapan Post Bank

Tokyu Corporation, The Bank of Yokohamaand GMO-PG to develop a cash out service
at ticket vending machines available attrain stations (Started May 8 th 2019）
Tokyu Corporation

The Bank of Fukuoka
The Bank of Yokohama

Ginko Pay
Bank of Okinawa
w/draw cash

The Shinwa Bank

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

14

Definition of Money Service Business (MSB)
Financial service that only payment service providers can deliver
Services

Revenue types

MSB-related assets（Breakdown of operating andother receivables are as follows）

Remittanceservice

Efficient and secure refund and remittanceprocessing for Ecommerce operator

FeeーTransaction
lending

Handles daily transaction

SpreadShort-term loans

Early payment
service

Improves cash flows by moving up
the date of payment to merchantSpreadAdvance payments-trade

Payment afterdelivery

Pays sales proceed without waitingfor deposit from consumer

SpreadFee

Accounts receivable-otherCopyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15

MSB: GMO Payment after delivery
Provided by subsidiary GMO Payment Service■Market size of deferred payment■GMO Payment After Delivery
Buyer can pay at the post office or CVS after receiving thegoods. Payment term is 2 weeks.

Annual growth rate of 40% or more
Market size for 2017: ¥420 billion (expected)¥420 bil（projected）

EC site＋44.8％②Credit check③Goods delivery / receipt⑤Deposit①Order④Mailing invoice/payment slip
Convenience store
Post office, bank

⑥PaymentConsumer

Payment services with 2weeks+
payment terms are also delivered.

FY2013

FY2014FY2015FY2016FY2017※ Source: “Current situation and future forecast of online
payment service providers 2018” issued by Yano ResearchInstitute Ltd.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

16

Payment Enhancement: Overseas strategy
Expand customer footprint through strategic investments andassisting JPN companies foray into the Asian market■Investment target
Asia: Top payment-related company■Payment processing business
Providing payment services toJapanese companies that entered
Asian market (Z.com Payment)

US: Innovation capital

Portfolios of Investments by GMO-PG and GMO Global Payment Fund

＋67％
YoY

Japan’s first Fintech fund targeting
payment-related startups in Asia
(JPY 2 billion fund)US
HongKong
TaiwanIndia

ThailandInvest in Fintech-related or
cutting-edge payment
service companies

BietnamPhilippines

Malaysia
Singapore

GDPApprox.¥250T
5-6% CAR

Indonesia
FY2015FY2016FY2017FY2018Transaction value in Asia surging
GMO-PG overseas offices

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

17

Payment enhancement: Mobile payment andauthentication

Focus on investment in MACROKIOSK, Asian banks and large enterprises
Strategy: Build Scale First, Then Profit

Company name Macro Kiosk Berhad
Location

Malaysia and 11 other countries in Asia

Headcount253<Specific actions>①Payment-related businessSet up sales teams in India and Europe②Business expansion in new countries
Provide payment service, collaborating with 2C2P, ourequity method affiliate③Development of new products

Financial results Revenue ¥4,563 million
GMO-PG’s stake 70％④Entry into new areas by M&AAcquisition cost Approx. 1,121 million yenBusinessOverview

SMS mobile solution (composition≒90％)
delivered to 95％ of Malaysian banks

Carrier billing gateway (composition≒10％)

Guangzhou

delivered to 50+ major carriers in 12 countries
Bangkok

Makau
Hong KongTaichungManiraHo chi minh

Kuala Lumpur
Singapore
Jakarta(as of the end of September 2018)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

GMO-PG Group
GMO Payment Gateway’s subsidiaries and equity affiliates
GMO Payment Gateway, Inc.
＜ Consolidated subsidiary＞
Multi payment（targets small-sized merchant）（Financial results of FY2018）
Revenue：3,142 million yen, Ordinary income：2,145 million yen (J-GAAP)GMO Epsilon, Inc.

GMO Medical Reservations Technology Co., Ltd.
Payment after delivery

GMO Payment Service, Inc.

（Financial results of FY2018）
Revenue：4,472 million yen, Ordinary income： 847 million yen (J-GAAP)

Card-present payment

GMO Financial Gate, Inc.

（As of end of Sep. 2018）65.0％ stake

Global Card System
Overseas

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.

（Singapore）

GMO-Z.com PAYMENT GATEWAY HONG KONG LIMITED（Hong Kong headquarters, Taiwan branch）

GMO Z COM PAYMENT GATEWAY MALAYSIA SDN.BHD.

（Malaysia）

GMO-Z.com PAYMENT GATEWAY (THAILAND) CO., LTD.

（Thailand）

Overseas

Macro Kiosk Berhad< Equity method affiliate >（As of end of Sep. 2018）70.0％ stake（Finanvial results of FY2018）
Revenue：4,563 million yen, Profit attributable to owners of parent：24 million yen (IFRS)Multiple payment

SMBC GMO PAYMENT（As of end of Sep. 2018）49.0％ stake

Overseas

2C2P Pte. Ltd.

（As of end of Sep. 2018）33.0％ stake

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

19

Company outline■Name

GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange 1st section)■Date of establishment

March 1995

■Location

Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku, Tokyo Japan■Capital stock

4,712 million yen■Major shareholders

GMO Internet, Inc., Sumitomo Mitsui Banking Corporation, Issei Ainoura ,etc

■Management team

■Auditor

Chairman & Director
President & Chief Executive Officer
Director, Executive Vice President
Director, Executive Vice President
Senior Managing Director
Director
Director
Director
Director
External Director
External Director
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
AuditorExternal Auditor
External Auditor
External Auditor
Deloitte Touche Tohmatsu LLC■Consolidated subsidiaries

GMO Epsilon, Inc., GMO Payment Service, Inc., GMO Financial Gate, Inc.,

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Yuichi Hisada
Masashi Yasuda
Takehito Kaneko
Hiroyuki Nishiyama
Hirofumi YamashitaMasaya Onagi
Akio Sato
Tomoyuki Murakami
Shinichi Sugiyama
Yusuke Arai
Masaru Yoshioka
Takeshi Yoshii
Takashi Mitani
Katsunari Mukai
Yoshikazu Yanagishima
Kazunari Taguchi
Tatsuhito Muramatsu
Kiyonobu Inayama
Shingo Ito
Yoshinori Inoguchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Takashi Iinuma
Kazutaka Yoshida
Kazuhiko Okamoto
Yumi Hokazono

GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), Macro Kiosk Berhad, etc.
■Equity affiliates

SMBC GMO Payment, Inc., 2C2P Pte. Ltd., etc.

（As of end of January 2019）

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

20

Business outline of payment processing company (1)Problems with online credit card payment in the early days ofEcommerce
Consumer

Paymentcompany

Merchant①order taking

Authorization（get approval number）②Enter each
into theCAT terminal③Make sales report to eachcredit card company（sales processing）

 Duplicate Order entry into CAT terminal and inhouse system⑤Check whether payment
has been received

network④Mail sales report
to each credit
card company

Credit card company

Large volume of sales slips

Issues for merchants

 Sorting documents for each credit card company

Payment

 Insufficient check on incoming payment
 Human error
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

Business outline of payment processing company (2)Payment processing service adds operational efficiency to credit card
payment
Consumer

Paymentcompany

Payment
Processingcompany

Merchants①Order taking

Updatecard data
Real-time credit decision

NetworkSend
sales data

②Check whether
payment has been
received(data collation)

Sales processing

PaymentCredit card company

Credit・sales

In the early days of Ecommerce, credit card payment was processed offline between
merchant and credit card company, a burden for both sides.
Payment processing companies were established to eliminate the burden for both theparties.

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

22