Supplementary information
Financial results briefing for the Q1 of FY2019

February 14, 2019
GMO Payment Gateway, Inc.
(3769: Tokyo Stock Exchange section - 1 )https://corp.gmo-pg.com/en/

Business results and KPI
FY2018 (fiscal year ending September 2018) revenue
reached ¥26.4bn and operating profit of ¥6.5bn
Revenue

Operating Profit （unit: mil. JPY）
31,850 *1

25.5％ YoY

8,300

65.9％ YoY

26,4176,550（Reference）
J-GAAP based 33.8％ increase fromthe previous period

21,054

12,113

3,819

3,948

FY2016FY2017

2,977
2,476

9,030
7,205FY2014

FY2015FY2016FY2017J-GAAP

FY2018IFRSFY2019FY2014*2

FY2015J-GAAP

FY2018FY2019IFRS

Operating stores

TRX Volume

TRX Value

112,341 stores1.47 billion¥3.8 trillion*3(*1)FY2019 figures is our forecast.
(*2)The group started voluntary application of IFRS in FY2018. The figures for the FY2017 are calculates on the same base.
(*3)The number of operating stores is at the end of December 2018.
Transaction Volume and transaction value are the figures of January to December 2018.
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 25% OP growth based on payment processing andperipheral businesses
Payment enhancementbusiness
Online advertising service
Asia payment enhancementbusiness (MK)*and others

Sales
composition(Q1 FY2019 actual)OP
composition

12%

20％
18％
24％
24％
Money Service Business(MSB)
GMO payment after delivery
Remittance service
Transaction lending
Early payment service
Finance leaseand others

15%
21%

57％

85%
79%
Payment processing
business
Online payment
Recurring payment
Card-present payment(GMO-FG)*
System development
Biz with banks/Processingand others※MK：MACROKIOSK GMO-FG：GMO Financial Gate Group

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

3

Our ecosystem
An ecosystem where our value-adding services benefit ourmain business so both continue to growMore payment processing

Payment
processing
決済処理(Gross margin 85％)

Payment
processing
business

Money ServiceBusiness

Payment
enhancementbusiness
Customer
顧客の成長
growthMain
business

Value-adding services for the expansion of the main business

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

4Business outline - the role of our group
Connecting merchants and payment companies on contract,
payment data and money flow
Consumer

Merchant

Our Company & Service

Payment company

Merchants=Our Customers

112,341 stores(end of December 2018)

EC

BtoB・BtoC・CtoC

Public money
OnlinePC

NHK
NTA, automobile tax
Municipalities (e.g. Tokyo)

Subscription
Video distribution
Software, clothes
Smartphone

OfflinePhysical store

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

Service commerce
Digital goods
Donation, travel, policy

GMO Payment
After Delivery35,246 terminals

G lo b a l p a ym en t(end of December 2018)

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■Our four revenue types①

Initial (Initial revenue)
Initial introduction fees
Coefficient: Number of new merchants acquired
Revenue: Number of new merchants acquired
× _Yen (at the time of introduction)■Revenues by merchant type/size
Municipalities
Enterprise① ② ③

Stock (Monthly revenue)②③

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

Middle-sizedmerchants

Fee (Transaction processing revenue)① ② ③ ④

Fee based on transaction volume
Coefficient: Number of payments processed
Revenue：Number of payments processed× _YenSpread (Merchant acquiring service revenue)④

Fee based on transaction value
Coefficient: Amount of payments processed
Revenue：Amount of payments processed× _%Startup④

Copyright (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 proceed
Direct contract

Payment
processing

Paymentprocessing

mainly for large companies
and municipalities

Our group
Credit cardcompany

2.8％ charge
Sales proceed

Payment company

Merchant

0.5% Spread(Merchant acquiring revenue)
Representative
contract

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
Target a balanced revenue growth by various initiatives（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
2004/92005/92006/92007/92008/92009/92008
Launched
Early
PaymentService※MK：MACROKIOSK GMO-FG：GMO Financial Gate GroupTSE
Listing2010/92011/92012/92011
Launched
OnlineAdvertisingService2013/9

2014/92015/92016/9201320142015
Launched Launched Renewed
Payment Transaction EarlyAfterLending
PaymentDelivery
Service2017/9

2018/9 2019/9E

2016
Launchedbusiness withbanks
GMO-FG and MK*
Became subsidiaries

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

8

Summary chart of Segments and Revenue models
Reporting in 3 Segments and 4 revenue 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(Transactionprocessing 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 acquiring
service 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
Lower Ecommerce ratio and higher cash payment ratio
than other advanced countries■Ecommerce ratio
17.9（％）（2017)

Credit Card
usage rate

Debit card

Credit+Debit *usage to private
final consumption
expenditure rate

South Korea

74 ％

19 ％

93 ％

UK

12 ％

53 ％

65 ％

Australia

31 ％

25 ％

56 ％

US

26 ％

20 ％

46 ％

17％

-17 ％

16.2

UKUS

15.0

■Card usage to private final consumption expenditure

14.5

Japan

12.5
11.3
10.4
9.2

10.0

7.0

7.6

8.2
7.3

6.0
5.0

3.6
1.8

4.1

2.1

4.6

2.5

8.2

8.8

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

20092010

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 3rd Quarter 2018 Retail E-Commerce Sales Report”;
Office for National Statistics “Retail Sales, January 2019”*Rate=(Amount handled by CC or DC) / Private final consumption
expenditure*Estimated by GMO-PG with reference from 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.

10Cashless field expansion
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%（growing 10% pa）

OnlineMerchandising

Payment via
internet, etc.

Offline(card-present)

B2B
Credit cardpayment

2017
EC rate
5.8%
Market size ¥16.5T

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

Service commerce
Digital content

Public fund・utility fee
・Local tax¥39 trillion
・National tax ¥62 trillion

Payment with areader at aphysical store

Consumer spending¥300 trillion

Flea market
app

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
SapporocityLocal：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 FY2017:14.9%（yoy ＋1.2％）

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

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

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

12Offline (card-present) payment
IoT services to go full scale to take in cashless & inbound demands■Offline payment

GMO Financial Gate delivers payment terminals for physical store payments
Embedded EMV *terminals

Revised Installment Sales Act:
Replacement demands for IC chip equipped
terminals from the conventional magnetic ones
Tokyo 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 vending
machine(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: Ginko Pay
Get more banks/companies onboard, connect them andbe an infrastructure■Ginko Pay
A smartphone app system that allows for immediate payments such as direct debit
targeting financial institutions
Resona GroupNEW The Hokuriku BankNEW The Hokkaido Bank

Tokyu Corporation, Bank of Yokohama and
GMO-PG to start the development of a cashout service through ticket vendingmachines at train stations (2019 spring-）

Japan Post Bank

The Bank of Fukuoka
Bank of Yokohama

Ginko Pay
The Kumamoto Bank

NEW Bank of Okinawa

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
lendingHandles daily transaction

SpreadShort-term loans receivable

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

SpreadFeeAccounts receivable-other

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

15

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

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

4,20bil（expected）

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

Overseas strategies
Target 50% overseas sales ratio by assisting JPN companies
foray into Asian market and our investment strategies■Investment target
Asia: Top payment-related company■Payment processing business
Providing payment services toJapanese companies that entered
Asian market (Z.com Payment)

US: Innovator

Portfolios

YoY

＋67％
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% GrowthIndonesia
FY2015FY2016FY2017FY2018Transaction value in Asia soaring
GMO-PG overseas bases

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

17

Payment enhancement: Mobile payment andauthentication

Focus on investment in MACROKIOSK, acquiring of
Asian banks and big companies
Strategy: Going after scale, then profit

Company name Macro Kiosk Berhad
Location

Malaysia and 11 other countries in Asia

Headcount

253

Financial results Revenue<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:4,563 million yen

GMO-PG’s stake 70％④Entry into new areas by M&AAcquisition cost Approx. 1,121 million yen
Businessmodel

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
Bangkok

Makau
Hong Kong

Taichung
ManiraHo 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
OverseasGMO-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. 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 Yamashita
Masaya 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）network④Mail sales report
to each credit
card company

Credit card company

Large volume of sales slips

Issues for merchants Order entry into CAT terminal and our system Sorting documents for each credit cardcompany⑤Check whether payment
has been received
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 cardpayment
Consumer

Paymentcompany

PaymentProcessingcompany

Merchants①Order taking

Updatecard data
Real-time credit decision

NetworkSendsales 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, causing burden on both sides.
Payment processing companies were established to eliminate the burden on
both parties.

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

22