Supplementary Information
Financial results briefing for the Q1 of FY2020

February 13, 2020
GMO Payment Gateway, Inc.
(3769; Tokyo Stock Exchange First Section)

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

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

Our Track Record of Growth
FY2020 Revenue guidance of ¥36.6bn, OP guidance of ¥10.3bn(Mil. Yen)
35,000

Revenue

36,618 (Mil. Yen)

※1

10,000+14.0％

10,376(Mil. Yen)
12,000+25.0%

32,121

30,000Operating Profit

※1

8,000

EBITDA

12,188※1※2+30.3%

10,000

8,301

9,351

25,000

8,000
6,000

20,0006,000

15,000

4,000
4,000

10,000
2,000

2,000

5,000

IFRS

Operating Stores

121,700

J-GAAP※3,4

IFRS

J-GAAP

TRX Volume

TRX Value

1.93bn¥4.9 trillion

2020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/92019/92020/9E

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

2008/9

0

0

0

IFRS

（※1）Voluntary adoption of IFRS accounting started on FY2018, and figures for FY2017 are restated on the same basis. FY2020 figures are based on GMO-PG consolidated guidance.
（※2）EBITDA under J-GAAP is calculated as the sum total of operating profit, depreciation and amortization; and EBITDA under IFRS is calculated as sum total of operating profit
and depreciation.
（※3）The number of operating stores is at the end of December 2019. Transaction volume and transaction value are the figures from January 2019 to December 2019; transaction
volume and transaction value include the figures of GMO Financial Gate Group.
（※4）Figures exclude a significant increase in operating stores from a specific merchant. If included, the number of operating stores is 254,261 stores as of end of December 2019.

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

2

Three business segments
Sustain an over 25% OP growth from the expansion of mainstay
payment processing business and its peripheral businesses(Actual data for Q1 FY2020)

Payment Enhancement
Business

Revenuebreakdown

Asia Payment Enhancement
Business (MK)※
Online Advertising Service
SSL Service
Delivery Service

Operating Profit
breakdown

17％

12%

etc.

23％

60％

88%

Money Service Business(MSB)

Payment Processing
Business

GMO Payment after Delivery
Remittance Service
Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending

Online Payment ※※Offline Payment (GMO-FG)
Ginko Pay/Processing
System Development
etc.

etc.
※ Online payment includes pay-as-you-go and recurring payment and, Z.com Payment (overseas payment service)
GMO-FG stands for GMO Financial Gate consolidated subsidiaries, MK stands for MACRO KIOSK

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

3

Our Business Eco-system
An eco-system of our value-added services complementing our main
business to achieve mutual growth

Increase in TRX processing

Payment processing(Gross margin 85％)

Payment
Processing
Business

Money Service
Business

Payment
Enhancement
Business
Customer growth

Main Business

Value-added business that contributeto growth of the main business

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

4

Payment Processing Business: Business scope of the
major consolidated subsidiaries
Connecting merchants and payment companies through‘contracts,’ ‘payment information,’ and ‘money flow’.
Consumer

Merchant※

121,700 stores(End of December 2019)

EC
B2B・B2C・C2C
PC

OnlinePayment

Smartphone

OfflinePayment

Taxes, Dues, Utility
NHK
NTA, Automobile Tax
Municipalities (e.g. Tokyo)

Payment Service
Providers
40+ Credit cardcompanies
Convenience store
Account Transfer
Multi-currency
Carrier billing

Subscription
Video streaming
Software, ApparelE-moneyService/Commerce
Digital content
Donation, Travel,
Insurance

Cash on Delivery

39,318terminals(End of December 2019)

Payment Terminal

GMO-PG consolidated
subsidiaries

Pre-paid

Bank transfer

GMO Payment
After Delivery
Mobile payment
QR code※ Figures exclude a significant increase in operating stores from a specific merchant. If included, the number of operating stores is 254,261 stores as of end of December 2019.

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

5

etc.

Payment Processing Business:
Revenue model of credit card payment processing
Revenue model determined by merchant size and type
■ Four Revenue Streams (i.e. Business Models)Initial (Initial revenue)

①

②

③

Initial introduction fees
Coefficient: Number of new merchants acquired
Revenue: Number of new merchants acquired
× _Yen (paid once at acquisition)

Municipalities
Enterprise① ② ③

Stock (Fixed revenue)
Fixed Monthly Revenue
Coefficient: Number of merchants
Revenue： Operating merchants × _Yen

Fee (Transaction processing revenue)

Middle-sized
merchants① ② ③ ④

Fee based on transaction volume
Coefficient: Number of payments processed
Revenue： Number of payments processed× _YenSpread (Merchant acquiring service revenue)④■Revenues by merchant type/size

Fee based on transaction value
Coefficient: Amount of payments processed
Revenue： Amount of payments processed× _%Start-ups④

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

6

Payment Processing: Two types of merchant contracts
Created the Representative Contract and effectively changed
the flow of revenue proceeds
Direct contract
Applies to some large companies
and municipalities

Payment
Processing

Payment
Processing
GMO-PG consolidated
subsidiaries

2.8% Merchant Discount Rate (MDR)

Merchant

Revenue proceeds

CreditCard
Company

Payment
Company

0.5％ Spread(Merchant acquiring revenue)
Representative
contract

2.5％ charge

3.0％ charge

Mainly for SME’s but also
covers some large companies

GMO-PG consolidated
subsidiaries

3.2% MDR
Merchant※ Figures included are for illustration purposes only.

(MDR applied for direct contract withpayment company)

CreditCard
Company

Payment
Company
Flow of Revenue and charges

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

7

Revenue breakdown by business model
Aiming for a balanced revenue growth(Mil. Yen)J-GAAP

38,000IFRS

36,00034,00032,000Spread30,00028,00026,00024,00022,00020,00018,00016,000Fee

14,00012,00010,000
8,000
6,000

Stock

4,000
2,000

Initial0

2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9 2017/9 2018/9 2019/9 2020/9E
2008
Launched
Early
Payment
Service※ GMO-FG stands for GMO Financial Gate. MK stands for MACROKIOSK.
TSE
Listing

2011
Launched
OnlineAdvertisingService

2013
2014
2015
2016
Launched Launched Revamped Launched
Payment Transaction Early
services
After
Lending
Payment targeting banks
DeliveryService
GMO-FG and MK ※become subsidiaries

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

8

Summary chart of Segments, Business Model and Services
Reporting in 3 Segments and in 4 business models■Business Model■ Segment

Online Payment

Payment Processing ※Payment Processing
Business

Offline Payment (GMO-FG)※

Initial（Initial revenue）

GMO Payment After Delivery

Online Payment

Stock(Fixed revenue)

Overseas Lending
Early Payment Service

Ginko Pay/Processing
Online Payment
Offline Payment (GMO-FG)

Fee(Transaction
processing revenue)

B2B Factoring

Payment
Enhancement
Business

Offline Payment (GMO-FG)
Online advertising service

Remittance Service

Money Service
Business

System Development
SSL Service

Ginko Pay/Processing
System Development

Offline Payment (GMO-FG)

GMO Payment After Delivery
Remittance Service
Asia Payment Enhancement
Business (MK)Delivery service

Transaction Lending

Online Payment

Asia Payment Enhancement
Business (MK)※GMO Payment After Delivery

Online advertising service

Offline Payment (GMO-FG)

Spread(Merchant acquiring
service revenue )SSL service

Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending
Asia Payment Enhancement
Business (MK)Delivery service※ Online Payment includes pay-as-you-go payment, recurring payment, Z.com Payment (overseas payment service).
GMO-FG stands for GMO Financial Gate. MK stands for MACROKIOSK.

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

9

The 5 Focus Areas
Expanding business in the 5 focus areas to achieve sustainable growth
５ Focus Areas

Narrowlydefined EC;
Broader EC(Page No.)
（P.11）（P.12～13）

Payment Processing Business

Payment Enhancement Business
Online advertising service

Online Payment(Pay-as-you-go/Recurring)

SSL service
Shipping service
GMO Payment
B2B Factoring
After Delivery
Transaction Lending
Remittance Service
Early Payment Service

FinTech（P.14～15）

Cashless（P.16）

IoT（P.17）

Offline Payment (GMO-FG)（P.18～19）

Z.com Payment(Overseas payment service)

GlobalMoney Service Business

Ginko Pay
Processing Platform

Overseas Lending

Asia Payment Enhancement
Business (MK)※ GMO-FG stands for GMO Financial Gate, MK stands for MACROKIOSK.

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

10Narrowly-defined EC: B2C EC Market
Low penetration rate of cashless relative to US/European countries andhigh proportion of cash payment■EC Penetration Rates in Developed Markets

17.9

（％）

16.2

UK
US

15.0

■ Card usage rate to private final consumption expenditure（2017)

Credit Card
usage rate

Debit card

Credit+Debit usage
to private final
consumption
expenditure rate※

South Korea

76 ％

19 ％

95 ％

UK

12 ％

55 ％

67 ％

Australia

30 ％

25 ％

55 ％

US

25 ％

19 ％

44 ％

Japan

18％

-

18 ％

14.5

Japan

12.5
11.3
10.4
9.2

10.0

7.0

7.6

8.2

3.6
1.8

4.1
2.1

4.6

2.5

9.9

7.3

6.0
5.0

8.2

8.8

5.0

2.8

5.4

5.8

6.4
4.4

3.1

4.8

5.4

5.8

6.2

3.7

0.0
2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Figures are GMO-PG estimates.
Sources：METI. “FY2018 Survey of Infrastructure Development Status for Datadriven Society in Japan (E-Commerce market survey)”
U.S. Bureau of the Census “The 2nd Quarter 2019 Retail E-Commerce Sales Report”;
Office for National Statistics ”Retail Sales Index internet sales, November 2019”※ Card usage rate= (Amount handled by CC or DC) / Private final consumption
expenditure※ GMO-PG Estimates by referencing CPSS Red Book “Statistics on payment, clearing
and 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.

11

Broader EC: Expanding Scope of Cashless Business
The migration towards cashless payment is our growth accelerator

B2B

B2C

C2C

Enormous market
potential¥1,000 trillion

Narrowly-defined
B2C EC market

Developing market¥17.9 trillion
EC ratio: 6.2% (approx. 10% CAGR)

Merchandise EC

OnlinePayment

OfflinePayment(card-present)¥1 trillion

2018 2020
EC ratio (%) 6.2
7
Mrkt Size ¥17.9tr ¥22tr

B2B
Credit card
payment

Public dues/Utility
・Local tax¥40tr
・National tax ¥66tr

2025
15
¥45tr

Flea Market
App

Service commerce
Digital content

Broader EC
Consumer spending¥300trFlea 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.

12

Broader EC: Public Dues and Utility Payments
Introducing card payments for public dues and taxes since
the revision of the Local Autonomy Law in 2006
Sapporocity

Local
Local Taxes (automobile tax, light vehicle tax,
governments, fixed assets tax, etc.)
etc.
Water bill, gas bill, hometown tax

National tax credit card payment website
NHK

National broadcasting subscription fee
Credit card usage rate at the end of FY2018:
15.9% (Up ＋1.0％ YoY)

Expansion expected to continue
Maintenance fee, cram school tuition fee
parking fee, school meal charge, etc.

Tokyo
Fukuokacity

Aichi pref.
Osaka pref./city*Japan Broadcasting Corporation “Business Report for FY2018”

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

13

FinTech: Money Service Business (MSB)
Financial services that only a payment processing company can offer

MSB-related assets

Services
GMO Payment
After Delivery

Pays sales proceed without waitingfor deposit from consumer

Remittanceservice

Efficient and secure refund and remittanceprocessing for Ecommerce operators

Overseas Lending/Transaction Lending
Early Payment
service
B2B Factoring

Lending of growth capital

Improves cash flows by bringing
forward the payment date

Early cash conversion of accounts
receivable

Accrued revenues－
Accounts receivable-trade(short term loans)

Business Model
Fee
SpreadFee

SpreadAccounts receivable trade (advances paid)

SpreadAccrued revenues

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

14

FinTech: GMO Payment After Delivery
Deferred payment provided by subsidiary GMO Payment Service■Market size of deferred payment■GMO Payment After Delivery
Buyer can pay at a post office or CVS store after receiving goods
Payment term (deadline) is 2 weeks.

Robust growth of the Deferred Payment market.
Market size in FY2019 estimated at ¥755 billion.

¥755bnEC site(estimate)＋32.0％②Credit check③Goods delivery & receipt⑤ Deposit①Order④Mailing invoice/payment slip
Convenience store
Post office, bank

⑥Payment of purchase amount

User

Payment services with over 2 weeks
payment terms are also available

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019※ Source: “Current situation and future forecast of online payment
service providers 2018” issued by Yano Research Institute Ltd.

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

15

Cashless: QR Code Payment
Increase Ginko Pay adopters, interlink each service to create ainfrastructure-like service■Ginko Pay
A smartphone app system marketed to financial institutions that allows for immediatepayments such as direct debit■ Cash-out (withdrawal) service
The Hokkaido Bank

The Hokuriku Bank

Sumitomo Mitsui
Banking Corporation

The Hiroshima Bank

Cash withdrawal made from ticket vending machines at
Tokyu Line train stations that is based on the Ginko Pay
framework (jointly developed with Tokyu Corporation,
Bank of Yokohama and Japan Post Bank)※ not available at certain stations of Tokyu Line

■ GMO Cashless Platform
Japan Post Bank

The Bank of Fukuoka

銀行Pay
The Kumamoto BankThe Shinwa Bank

Cashless solution for offline stores which offers a packageof payments methods including QR/Bar code and isscalable to include new payment methods

Bank of Yokohama

Bank of Okinawa（As of February 13, 2020)※ Offered from November 11, 2019

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

16

IoT: Offline Payment Market
Rollout of IoT services by incorporating cashless &inbound demand■Offline payment
GMO Financial Gate offers payment terminals for payments at offline stores
Embedded-type EMV terminal ※Amendment of Installment Sales Act:
Replacement demand for IC chip equipped
terminals from conventional magnetic strips
Tokyo 2020 Olympics:
Cashless payment demand to surge as more
foreign visitors come to Japan

with PIN

with PIN

with PIN

without PIN

Future target and potential
Vending machine(Drink/food)

Ticket vending
machine(Railway company)

Auto payment
machine(Parking, hotel, hospital)

Office coffee
machineSelf check out, EV charger,
goods selling machine,laundromat,
Self-order kiosks/touch pad※EMV: uniform standards for IC-chip enabled credit cards created by Visa and MasterCard.

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

17

Global: Overseas Strategy
Expand customer coverage through strategic investments and assisting
Japanese companies’ foray into the Asian market■Investment target
Asia: Top payment-related company■Payment processing business
Providing payment services toJapanese companies expanding into
the Asian market (Z.com Payment)

US: Innovation equity stakes

Portfolios of Investments by GMO-PG and GMO Global Payment Fund
GMO Payment Gateway’s overseas locations

USA

TaiwanIndia

Hong Kong
ThailandPhilippines
Vietnam
Malaysia
Singapore

＋69％
YoY

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

GMO Global Payment FundJapan’s first Fintech fundtargeting payment-related
startups in Asia (AUM ¥2bn)

NearlyTripledIndonesia

GDP
Approx.＄4.5T
5-6% Growth

FY2015Initial Investment

Current Mrket
Value

FY2016FY2017FY2018FY2019Transaction value in Asia surging

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

18

Global: Payment Enhancement Business (MACROKIOSK)
Focus on investment in MACROKIOSK and acquiringof Asian banks and big companies
Company nameMacro Kiosk Berhad

Strategy: Scale First (going after scale, then profit)<Specific actions>

Location

Malaysia and 11 Asian countries

Headcount

258

Financial results

Revenue: 5,199 million yen (FY2019 Actual)

GMO-PG’s stake70％

Acquisition cost

Approx. 1,121 million yen

Businessmodel①Payment-related businessSet up sales teams in India and Europe②Business expansion in new countries
Provide payment service, collaborating with 2C2P, anequity method affiliate③Development of new products④Entry into new markets through M&A

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

Carrier billing gateway (about 10％)

Guangzhou

delivered to 50+ major carriers in 12 countries

Taichung

Macau
BangkokHong Kong

ManilaHo Chi Minh

Kuala Lumpur
Singapore
Jakarta

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

19

Major subsidiaries and equity-method affiliates
GMO Payment Gateway, Inc.
＜ Consolidated subsidiary＞
Multi payment（targets small-sized merchant）（Financial results of FY2019）
Revenue：¥3,483mil, Ordinary income: ¥2,350mil (J-GAAP)GMO Epsilon, Inc.

GMO Medical Reservations Technology Co., Ltd.
Payment After Delivery

GMO Payment Service, Inc.

（Financial results of FY2019）
Revenue: ¥5,048mil, Ordinary income: ¥1,212mil (J-GAAP)

Offline payment

GMO Financial Gate, Inc.

（As of end of Sep. 2019）65.0％ stake

Global Card System
Overseas

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.

（Singapore）

GMO-Z.com PAYMENT GATEWAY HONG KONG LIMITED（Headquartered in Hong Kong and a branch in Taiwan）

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. 2019）70.0％ stake（Financial results of FY2019）
Revenue: ¥5,199mil, Profit attributable to owners of parent: ¥223mil (IFRS)Multiple payment

SMBC GMO PAYMENT（As of end of Sep. 2019）49.0％ stake

Overseas

2C2P Pte. Ltd.

（As of end of Sep. 2019）33.0％ stake

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

20

Company Outline■Name

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

March 1995

■Location

FUKURAS office (Head office) SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku, Tokyo, 150-0043 Japan■Capital stock

4,712 million yen

Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku, Tokyo Japan■Major shareholders

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

■Management team

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
Standing Auditor
AuditorExternal Auditor
External Auditor

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

Deloitte Touche Tohmatsu LLC■Consolidated subsidiaries

GMO Epsilon, Inc., GMO Payment Service, Inc., GMO Financial Gate, Inc.,
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), Macro Kiosk Berhad, etc.

■Equity affiliates

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

（As of January 1, 2020)

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

21

The business of a payment processing company (1)Problems with online credit card payment in the early days of E-Commerce
Consumer

Payment
company

Merchant①order taking

Large volume of sales slips②Enter each
into theCAT terminal③Make sales report to eachcredit card company （sales processing）

network④Post mail sales
report to eachcredit cardcompany

Problems for merchants Duplicate order entry into CAT terminal andmerchant’s system Sorting documents/transaction for each credit
card company
 Insufficient check on incoming payment
 Human error due to manual input⑤Check whether payment
has been received
Payment

Credit card company

Authorization（approval number
assigned）

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

Payment
company

Payment
Processing
Company

Merchants①Order taking

Updatecard data
Real-time credit decision

Network

Sales processing

Transmit
sales data

②Check whether
payment has been
received(data collation)

Payment

In the early days of Ecommerce, credit card payment was processed offline between
merchant and credit card company, resulting in work burden on both sides.
The establishment of payment processing companies eliminated this burden for both parties.

Credit card company

Credit・sales