TIS INTEC Group Business Information Meeting(Payment Services 2023)
December 7, 2023

© 2023 TIS Inc.

Speaker Introductions© 2023 TIS Inc.

Kiyotaka
Nakamura

TIS Inc.
Senior Managing Executive Officer
Division Director,
Digital Transformation Business Unit

Isao
Otokita

TIS Inc.
Managing Executive Officer
Deputy Division Director,
Digital Transformation Business Unit

2

Contents

1 Business status, review

2 Evolution of PAYCIERGE
3 Business strategy© 2023 TIS Inc.

3

Shift Toward Service-Style Solutions Derived Through SI Business
2010
2011
Debut of IC card compatible
electronic money
2004 PCI-DSSv1.0 issued
2007 iPhone launched
CAT terminal
launched

2013
2015

Payment Services Act introduced
Branded prepaid card businessbegins in Japan
Rise of mobile payment providers
Fintech attracts attention

e-commercestarted2021
2008 “CreditCube” launched
TIS approved as PCI-DSS scanning vendor

From earliest days,
tasked with configuration ofcore credit systems for
major credit card companies

*

2023
2023

Expand corporateawareness of Web3
Ban on digital salary
payments lifted
Invoice system
introduced**: Data prepared by TIS© 2023 TIS Inc.

4

TIS INTEC Group’s Payment Settlement Business• Payment–related operations account for¥115.0 billion, or about 23% of consolidated
net sales• Of this, service-style operations (payment services)
are driving scale of operations wider in recent
years

34.5

33.5

28.5
Consolidated net sales¥508.4 billion

22.5(Year ended March 31, 2023)

15

10
6

Payment-related operations of the Group
Sales composition about

23％

Financial IT Business

15%

Offering Service Business

7％

Other

1％

© 2023 TIS Inc.

4
2

15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3
ActualPayment-related sales inOffering Service Business (Billions of yen)
5

PAYCIERGE Concept

For a new, more convenient society and beyond
WalletCreditDebit

Processing
Prepaid
QR codepayment© 2023 TIS Inc.

BeyondPayment

Smart city
Regional currency

Small andmedium-sized enterprise (SME)
payment DX

Bring new value to society
through payment solutions

6

Payment Services Composition, as of March 31, 2023
• Progress is generally on track to achieve ¥50 billion by fiscal 2026, ending March 31, 2026, a target
introduced at business briefing in 2019.
• With expanding light needs, that is, simple, speedy and prioritized payment options such as QR code
apps, digital account services will fuel results.
Fiscal 2026
Fiscal 2024
Fiscal 2023
Estimate
Estimate
Actual(at 2019 information meeting)(when plan drawn up in 2021）¥35 billion

Credit SaaS
Debit SaaS
Prepaid SaaS

¥9 billion

Wallet
QR¥3.5 billion

Merchants¥2.5 billion

ーー

Payment
total© 2023 TIS Inc.

Credit¥20 billion¥19.2 billion¥15 billion

Digitalaccounts¥11.5 billion¥12.7 billionーNew areas/
common¥2.5 billion¥2.6 billion

Payment
total¥34 billion¥34.5 billion¥50 billion* Mainly Processing. New areas/common includes Beyond Payment area.

7

Changes in Business Structure• Smartphone first concept—prioritizing smartphones among mobile devices for app development andrelease—accelerating, with emphasis on prepaid e-money services requiring payment in advance of use.
• More services integrating debit/prepaid SaaS, wallet and QR code app, and merchant payment methods,
so reorganized as digital accounts.

Credit SaaS

Business Information Meeting in
December 2019

Business Information Meeting in
December 2023

Cards

Cards

*No need for any procedures prior touse, no changes to main media

Users

Debit SaaS
Prepaid SaaSStores© 2023 TIS Inc.

Cards
* Smartphone use accelerating
because pre-charging is required tomake funds available at use

Wallet, QR

Digital accounts

Smartphones

Smartphones

QR scanMerchants

POS

8

Activities in Area of Payment Processing

For a new, more convenient society and beyond
WalletCreditDebit

Processing
Prepaid
QR codepayment© 2023 TIS Inc.

BeyondPayment

Smart city
Regional currency

Small andmedium-sized enterprise (SME)
payment DX

Bring new value to society
through payment solutions

9

Achievements in Area of Payment Processing• Credit SaaS service start in fiscal 2023.
• Awareness of QR-code enabled payment as payment method suddenly became more pervasive in 2018,providing backdrop for digital account operations, combining mobile wallet and debit or prepaid emoney, to drive results higher.
Achievements
Credit• Credit SaaS started with provision of solution to NTT DoCoMo. If existing user
clients included, transaction volume moving in favorable direction.
• Saw demand for credit solution appropriate to needs of digital account clientcompanies as well as demand for corporate credit solution comparable to B2Btransaction DX.

Digital accounts

Laying groundwork,
medium to long term

• Booming digital account demand from emerging platform market.
- Support for building TOYOTA Wallet, Toyota Financial Services’ cashless paymentapp.
- Support for issuing corporate cards linked to freee’s cloud-based accounting tool.
- Provided processing service to Nudge, which seeks to be a challenger bank.
• Responded to demand from major payment processors in digital shift as projects
utilizing digital account asset groups- Started providing Sumitomo Mitsui Card Mobile Payment Package• Support swift response to expedite payment of salaries through digital
payment apps, a trend that is expected to attract greater interest.

• Taking medium- to long-term perspective, will start research on digitalcurrency and Central Bank Digital Currency (CBDC).

© 2023 TIS Inc.

10

Activities in Area of Beyond Payment

For a new, more convenient society and beyond
WalletCreditDebit

Processing
Prepaid
QR codepayment© 2023 TIS Inc.

BeyondPayment

Smart city
Regional currency

Small andmedium-sized enterprise (SME)
payment DX

Bring new value to society
through payment solutions

11

Achievements in Area of Beyond Payment• In area of Beyond Payment, we seek to deliver solutions to social issues through “~ x payment”
approaches.
• Not simple behind-the-scenes support but rather efforts on our own to be primary contractor pushingbusiness forward.
Smart City x Payment

Corporate DX x Payment

Drawing digital technology and knowhow together and work with
communities to realize smart.

Realizing improvement in productivity
through digitization of invoicing andpayment processing for SMEs.

• Launched full-scale practical application of
Aizu Coin, digital regional currency service.

• Launched new services originating fromprofessional support solutions from
Nihon ICS which recently came under TIS
INTEC Group umbrella.

• Supported efforts to energize local
economy, promote sustainable
development goals and encourage good
health practices through Satsu Navisightseeing recommendation app.
• Supported payment services at HOKKAIDOBALLPARK F VILLAGE and build frameworklinking community with sports team fansthrough Kyakushiru, new service thatvisualizes customer behavior.
© 2023 TIS Inc.

• Started building next-generation
corporate card services linking invoiceprocessing between companies.
• Began providing consulting service that
supports launch of B2B payment service
for financial institutions and non-banks.

12Medium-Term Management Plan (2021–2023) and Progress Update••••

Business Environment

Domestic B2C cashless payment ratio nearing 40%, indicating progress toward cashlesssociety.
TIS’ target market — emerging platform market — growing as anticipated.
Trend toward lower payment fee rates continuing.
Emerging value-added demand, such as combined approach for small and medium-sizedenterprise (SME) DX x B2B cashless payments.

Numbers

Status of Progress

Growth• Expanding business scale exemplified in results exceeding
estimates set at time plan formulated.
(Sales reached ¥34.5 billion in fiscal 2023, hitting estimate a year
ahead of schedule)• Complemented existing credit, debit and other processing
services with wider service lineup to gradually encompass newthemes, including digital wallet and embedded finance needs.
• Welcomed launch of credit SaaS in fiscal 2023 and stable
operation of platform.

Profitability/
Shift torecurring salesfocus• Recurring sales ratio rose, thanks to start of credit SaaS service,
but increase insufficient to spur overall improvement in
profitability.
• Mature services gradually turned a profit, but burden of upfront
investment in new businesses and other expenses eroded gains,
leaving profitability an issue still requiring attention.
• Must enhance consulting capabilities and services that will
maintain high growth, enter areas showcasing high-value-added
services, and prioritize well-rounded investment activities.

Payment-related business scale
for service-style operations
33.5

34.5

36.0

[Billions of yen]
34.0

28.5

More than
20％
Fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2024
[actual][actual][actual] [estimate] [at time plan
drawn up]

Recurring sales

SI sales© 2023 TIS Inc.

EBITDA margin13

1 Business status, review

2 Evolution of PAYCIERGE
3 Business strategy© 2023 TIS Inc.

14

Market Changes• Barriers to entry in financial sector falling, due to unbundling of financial services.
• Solutions to social issues require new type of business entity that combines aspects of financial and nonfinancial operations.
Social trends

Market trends

Transition to data-driven super-smart society

P

Society 5.0
Low cost

E

Corporate field (toB)
Employee experience(toE)
Public–private
partnerships (toG)S

Decliningbirthrate/aging
population
Regional renaissance
Rise of new generation

T

AI
Data utilization
Web3
Blockchain© 2023 TIS Inc.

Provide necessary equipment and services to people who need themwhen needed and for as long as needed.

Barriers to financial sector falling

Use financial services
to help solve social issues

As unbundling of financial services
evolves, providers will be adding financial
services as a function of their businessactivities.

New type of business entity will emerge
through combination of socialtransformation themes and financial
services to address social issues.

TIS✓ Lack of financial services matched todemand✓ High cost structure✓ Efforts to help solve social issues stuck in
specific areas

Solution

Solution

Promote platform creation that integrates
unbundled financial services matched todemand and with high degree of flexibility.

Maintain overwhelming share ofsettlement services market while setting
stage to utilize services as a tool.

Apply system integration skills andfinancial/payment settlement know-how tomake own business entity and promotesolutions to social issues

Select promising domains that offer
growth potential and can expand low-cost
payment settlement into strategic tool tocapture position.

15

Direction of PAYCIERGE Evolution
Underlying concept in PAYCIERGE, new strategy in payment services domain.
To realize sustainable and smart financial inclusion—the perfect evolution of a cashless society.

Application of financial services to help solve social issues

Direction of payment business evolution

Stage 2Valuecreationbusiness

Business of paymentsxsocial transformation themes
Data analysis

Payment

×

Healthcare

Decarbonization

Regions

New consumption

Provided value for society

Create new value
drivenby diversification

Evolution and expansionof payment services

Stage 1
Evolution of
payments

Services hinging
on processing

Next-generation
payment methods
B2B
B2E
Digitalcurrency

キャッシュレス
Global
A2A
Payment

Promote cashlesssociety andimproveconvenience

Barriers to financial sector falling© 2023 TIS Inc.

16

Realization of PAYCIERGE Evolution
Realize evolution of PAYCIERGE by maintaining share in existing fields and building businesspresence in new fields.
Strategy for successSocial issue solutions, new value creation(Beyond Payment evolution)
Polish TIS strengths in each theme
Build business presence through alliances and
M&A activity
Embedded Finance
Ensure profitability through optimized
investment
Deliver low-cost financial services throughuse of existing asset groups
Ensure share in emerging platform market(Enhanced processing capabilities)© 2023 TIS Inc.

17

Business Scale Targeted Through PAYCIERGEBusiness scale

New value
creation

Value creation
business¥45 billion

Next-genpayment methods
Digital accounts
Net sales

Credit¥34.5 billion
Fiscal 2023

Profitability/shift torecurring sales focus

Fiscal 2027

Fiscal 2030

Net sales

Above ¥120 billion
Progress inpayment settlement(Including M&A)

¥75 billion

Fiscal 2033

EBITDA

Above 30%

EBITDA

20-25%

SI salesRecurringsales

Fiscal 2023
© 2023 TIS Inc.

Fiscal 2027

Fiscal 2030

Fiscal 2033
18

Summary of Strategies by Business Area
Business
Area

CreditMarketGrowthCompetitive
Environment

Oligopoly

Digitalaccounts

Including debit,
prepaid and e-wallet
options

Mature～Essential Features ofStrategy✓ Increase client companies’ total paymenttransaction volume and expand recurringbusiness✓ Develop credit function for digital accountclients✓ Boost profitability through such approaches as
optimization of delivery/cost structure✓ Combine existing asset groups with outsourcing
services to broaden business area to B2B and
B2E

To
To
March 2027 March 2033

GrowthProfitimprovement

ProfitProfitimprovement improvement

GrowthNext-genpayment
methods

Including A2A
payment, digitalcurrency

Early days

New value
creation© 2023 TIS Inc.

✓ Utilize available service groups to respond
expeditiously to new payment schemes andcapture market share✓ Accelerate use of embedded finance through cocreation with clients✓ Launch new payment services throughout Asia

Marketcreation

Growth✓ Create value by combining business themes
closely associated with payment settlement,
which serves as a social infrastructure (Including
smart cities, corporate DX and healthcare)✓ Improve consulting/design skills and reinforce
business creation capability

Marketcreation

Growth19

1 Business status, review

2 Evolution of PAYCIERGE
3 Business strategy© 2023 TIS Inc.

20

Stage 1

Advancing Payment Methods© 2023 TIS Inc.

Anticipated Scale and Breakdown of Payment Processing Market in2032• Overall payment processing market likely to grow to ¥416 billion by fiscal 2032, with B2C cashless
payment ratio remaining high and complemented by further progress in other e-commerce models, suchas B2B and B2E.
• In market breakdown for 2032, conventional processing services will see a bit of a slowdown in sales
growth due to pressure from client companies to reduce fees because of a decrease in payment returnrate. Against this backdrop, emerging platform market is actively working to incorporate credit cards,
A2A payment (banking API), digital currency and other progressive payment methods into new value
creation, which should propel market scale toward ¥140 billion by fiscal 2032.

Payment processing market
Aggregate ¥416 billion

Payment processing market
Aggregate ¥310 billion¥140 billion

Emerging platform ¥90 billion
marketFour major
players¥276 billion¥220 billion

Fiscal2025年度
2025

Fiscal2026
2026年度

2029年度Fiscal2029

Fiscal2032
2032年度*TIS estimates© 2023 TIS Inc.

22

Expansion of Payment Processing Market• Digitization of B2B transactions by SMEs fueling need for B2B payment settlement services.
• B2E payment needs growing due to wider embrace of workstyle reforms and changes in exchange ofmoney, including wages and calculation of expenses, between companies and their employees.
• Will improve payment processing services with mobile, cloud and API capabilities to meet evolving
needs.
B2B Payment—Including corporate credit cards• Rate of electronic transactions between SMEs less than 10% (TIS estimate)• DX for SMEs facilitated by substructure support, including invoicing systems

B2E Payment—Including work-related prepaid accounts• Ban lifted on digital salary payment• Expenses incurred through remote work as well as employee
benefits paid electronically

Digitization of ¥300 trillion in analog transactions by SMEs

Companies increasingly using digital methods to pay
wages, expenses, benefits and other compensation【Companies】

Employees

Benefits: ¥6 trillion

Employee benefits/ expenses¥20 trillion【National / local
governments】【Households】

Benefits: ¥12 trillion

Corporate tax:
¥14 trillion

Income tax,
resident’s tax:
¥32 trillion

Company
Factory

Pensions: ¥60 trillion

Wages: ¥200 trillion

B2B transactions¥1,000 trillion

Insurance: ¥15 trillion

Producer

Personal expenses: ¥300 trillion
Wholesaler

Neighborhood
store

Payment volume is a TIS estimate based on various
statistical data

© 2023 TIS Inc.

B2C Payment—Including credit SaaS and prepaid e-money• Pace ahead of schedule to meet government target of 40%
by fiscal 2025
Credit and digital account transaction volume should
continue to increase

Financial assets:¥2,000 trillion

23

Digital Accounts Provides Starting Point for New Strategic Blueprint• Credit SaaS membership is growing, but business development is taking a path different than initiallyenvisioned. Will emphasize business development geared toward new needs while promoting activities
aimed at turning a profit.
• Seek to expand business, starting with digital account clients, to take advantage of growing demand in
this market.
• In both pursuits, will utilize and improve existing asset group and control investment as efforts unfold.
Client trends (toward incorporating payment function)✓ Broad direction, where emerging platforms require
payment function, remains unchanged[Toward incorporating payment function]
1. Add on prepaid or other digital account tool
2. Expectation of greater need to incorporate credit
function, in conjunction with increase in members andrising transaction volume
3. Greater need for low-cost next-generation payment
tools over medium to long term

Develop credit SaaS for clientbase promoting credit tool,
paralleling such factors asincrease in members✓ Credit SaaS taking a path different than initially envisioned✓ Meanwhile, growth exceeding expectations in digital
accounts (=capture latent credit SaaS clients)✓ Efforts to enrich service lineup moving forward[TIS’ approaches]
1. Respond to digital account clients’ needs regarding
credit function add-on (credit SaaS development
properly matched to needs)
2. Well-timed credit SaaS development for large clients
3. Quick response to next-generation payment schemes
Number of members active through
TIS’ services (as of fiscal 2023)

CreditCreditNext-genpayments
Digital accounts© 2023 TIS Inc.

TIS’ current status and approaches

200 million

Digital accounts

300 million
Draw on own asset group to develop
business and meet diversifying payment
needs

24

Players Operating under Various Business Formats Seek Payment
Processing Services
Demand for comprehensive processing
services, including financial function

Financial muscle =Logical trust foundation

50,000Automakers
Megabank

Megabank

Capital (billions of yen) Logarithm

Insurance

Megabank

Mobile carrier

Electronics

5,000

Insurance
Insurance
Securities
Real estate
Internet

Insurance
RetailMobile carrier
Electronics

Chemicals
MachineryPrecision
Automobile
Housing
Beverage
Insurance
Real estate
Housing
Automakers
Transport
Agricultural
Pharmaceuticalequipment
Human resources
Machinery
Pharmaceutical
EC Daily necessities
Security
Convenience
Transportation
Automobile
store
Furniture
Beverage Beverage
Insurance
Foods
Game
Cosmetics
Foods
Transportation
Beverage
Daily necessities
RetailPrecision
Foods Foods
Toiletries
Game
Daily necessities
Home center
Cosmetics
RetailConvenience store
Insurance

500

Foods

Cosmetics

Shoes
ApparelSmal and medium-sizedcompanies, NPO,
local governments

50

EC
C2C

5
© 2023 TIS Inc.

50

Electronics
Automakers

Game
Apparel

Demand for appropriate
credit processing services

Children’s supply

Demand for no-credit processing,particularly prepaid accounts

Demand for low-cost,interoperability-featuring nextgeneration payment processing

5

Automakers

Mobile carrier

Brand power =Emotional trust foundation
500

Brand Value (billions of yen) Logarithm

5,000

Data prepared by TIS based on materials announced by Interbrand in 2023 and corporate fiscal reports

25

Leverage Service Expansion Linked to Clients’ Business Growth• Usage status, represented by number of members and transaction volume, on services, including credit
SaaS, expanding at pace exceeding that of overall market growth.
• Expect brisk recurring business, along with more opportunities to provide peripheral and nextgeneration payment solutions matched to client business growth.
Millions
40.0

Number of members（Credit SaaS）

30.0
20.0

～

10.0
0.0
Years ended MarchFiscal20192018年度Fiscal2023
2022年度Trillions of yen

Fiscal2024
2023年度Fiscal2025
2024年度Fiscal2026
2025年度Fiscal2027
2026年度（Forecast）（Forecast）（Forecast）

Fiscal2025
2024年度Fiscal2026
2025年度Fiscal2027
2026年度（Forecast）（Forecast）（Forecast）

Transactions（Credit SaaS）

15.0
10.0
5.0

～

0.0
Years ended March© 2023 TIS Inc.

Fiscal20192018年度Fiscal2023
2022年度Fiscal2024
2023年度* TIS estimates based on credit card transaction volume forecasts.

26

Initiatives Aimed at New Market Capture• Further expansion in payment processing market through Embedded Finance, which integrates financial
services into retail, manufacturing or other non-financial services. Will approach new market through cocreation with clients in finance industry.
• New, low-cost payment methods will become more pervasive worldwide, and we will accumulate knowhow through R&D in preparation for arrival of such methods in Japan.

ClientCo-creation with clients

Staying on top of
new payment methods

Finance industry

A2A Payment(direct bank deposit scheme)
Relatively low-cost A2A payment is taking
hold globally, and we will prepare forarrival of this payment method in Japan.

Direct sales

Now
TIS

CreditDigitalaccounts

Digital currency, CBDC

New Market Capture

ClientNew
initiatives

Direct sales

TIS© 2023 TIS Inc.

Finance industry

CreditDigitalaccounts

RetailManuServices
facturing

Finance industry
clients
Embedded FinanceParticipating in Bank of Japan’s CBDC
forum and private-sector digital currency
forum, and currently exploring formats,including regional currency, withpotential to become new service
strengths.
Web3 wallet

Continue robust investment in Web3
startups and also accumulate tangible
results on wallet development forindividuals who manage crypto-assets
and non-fungible tokens.
27Working to Improve Profitability• We will raise profitability by expanding client base and widening scope of standardization acrossservices.
• As we phase in infrastructure sharing, including system operation and monitoring, we will look to expand
standardization to applications over medium to long term.
• We will balance efforts to better highlight the appeal of services by showcasing lower costs achieved
through standardization (advantage to clients) with efforts to improve business profits (advantage to
TIS).
As Is

Image of payment services cost structure reform

ServiceA

To BeService Service Service Service
A
B
C
D

Service Service Service
B
C
D

Client ③
Client ②
Client ①

Service Service
F
E

Client ④
Client ③
Client ②
Client ①

Shared costs
Shared costs

Unbundling of service functions

Be able to offer low-cost services by flexibly
bundling and utilizing unbundled functions

Push ahead on standardization, especially for
infrastructure, through cross-service emphasis

Expand scope of standardization, including
applications (improve cost efficiency)© 2023 TIS Inc.

28

Portfolio Management to Underpin Profitability• Have captured share since 2012 by actively investing in various areas of payment domain and increasing
types of services provided.
• Several high-share services should begin to yield results in fiscal 2027, ending March 31, 2027, after
which demand expected to expand, underpinning steady sales growth. In addition, will tamp down on
investment and reduce depreciation expense burden, successfully driving up overall business profit.
• Going forward, will continue to invest in payment processing services and strength balance sheet
management to maintain overall portfolio profitability.
Around fiscal 2021
TIS’ yield axis→
Market maturity
Level ↓

Expected operating
margin

～0%

～5%

～15%

Above 25%

0. Period of preparation

1. Launch period
KPI: Number ofcompanies acquired

2. Period of sales
growthKPI: Net sales

3. Period of initial results
KPI: Rate of return

4. Period of expanding
demandKPI: Profit

R&D

Investment increased
Credit SaaS

D. Oligopoly
C. Mature

QR-GW

B. Growth
A. Early days

Fiscal 2027
forecast

Debit/prepaid
WalletRegional currency

0. Period of
preparation

1. Launch period

2. Period of sales
growthD. Oligopoly

Next-gen corporate cards QR-GW/Kyakushiru

B. Growth© 2023 TIS Inc.

3. Period of initial
results

4. Period of
expanding demand

Credit SaaS

C. Mature

A. Early days

Investment controlled

Regional currency

Debit/prepaid

WalletCredit SaaS(light needs)

Stablecoins

29

Global Payments Business• Build merchant payment business network (corporate group) and make presence in Asia to create newvalue in payment services market.
• Promote alliances with companies in the merchant payment business value chain.

Cross-border
payment

ACQ/PSPPSP

EnablerMarket■PSP (Payment Service Provider)

Enabler

Crossborder
payment
networks

e-commerce

payment services license holder. Play a
key role to provides payment services tolocal merchants in each country.
e-commerce
merchants

Publictransportation

Tech companies
Payment processing
products
Public transportation
products

Publictransportationand othergrowth market■Enabler (to capture new markets)
Facilitate DX in specific digital market(merchants). we will pursue paymentbusiness in growth markets throughenabler/PSP alliances,■Tech companies (acquire excellence)

Companies with competitivetechnological capabilities and products inpayment services. We will sharpen
PSP/enabler’s competitive edge throughtheir technology products.

TIS INTEC Group products© 2023 TIS Inc.

30

Stage 2

Value Creation Business© 2023 TIS Inc.

31

Pinpointing Promising Domains• Analyzing the environment likely to characterize business and the payment services industry in 2032, we
pinpointed promising domains where we can realize smart, sustainable financial inclusion.

Evaluating market scale,growth potential in 2032

2032
Business trends

Trends in payment
services

Promising domains

Cashless society(Payment fees remain high)Drop in payment fees thanks
to next-gen payment
infrastructure

Completely cashless, thanks to
next-gen payment services

DX(DX requests are high)Event-driven payment
processing, fueled by IoT/API
economyHealthcare accounts

GX(Environmental issues)

Sustainable community
concept based on incentive
designFormation of regional eco-system

Low birthrate/aged society(Labor shortage)

New value creation based onsocial impact measurement

Ethical consumption marketing
based on carbon reduction
certificate

Regional renaissance(Population decline becoming
more serious)

Improvement in conditions forworkers/SMEs, due to business
DX and credit creation

Financial inclusion based on credit
using transaction history chain

New-generation platforms(Appearance of new
perceptions of value)

Changes in economic behavior
due to digital space

B2B transaction DX for SMEs

© 2023 TIS Inc.

32

Value Creation Business Strategy• Alliances with business operators boasting unique capabilities and clients in each sector.
• Prepare Stage 1 structure and format to facilitate one-stop embedded financial functions and create
Stage 2 business.

Valuecreationbusiness(Stage 2）

Healthcare market

Regional revitalization
marketRenewable energy
market

Healthcare accountFormation ofregional eco-system

Reduction
certificates of low/
decarbonization

SME B2B

Healthcare platform

Digital regional
currency

Ethical consumption
marketing

B2B transaction
DX

Insurance DX

Smart city

Visualization ofcarbon emissions

Visualization offunds

Business partners

Business partners

Business partners

Business partners

Consulting

DesignEmbedded

Consulting

DesignConsulting

SME market

Consulting

DesignDesignEmbedded Finance through API and SDK

Advancing payment
methods (Stage 1)

Valueadded

UX functions

BPM
Work flow

B2B

B2E

Data
analysis

AI・IoT

Financial
functionsPayment

Cards

Money
transfer

Loans

Bank
account
API

Digitalcurrency

CommonLegalcompliance

FinanciallicenseAML
CFTAuthentication data

BPO

Security© 2023 TIS Inc.

Utilize TIS INTEC Group’s
strengths in each businessarea as well as alliances andM&As with business
operators that present acomplementary client baseand capabilities to enter
sectors with high barriers toentry and offer payment
services +alpha.

Create business with astructure that embeds
payment functions of Stage
1 into Stage 2 and draws on
human resources with
consulting and design
skills.
Use existing asset groups
to provide regulation- andsecurity-enabled financial IT
services and businessservices 24 hours a day 365
days a year.

33

Goal of SME B2B Transaction DX Business
ProvidedValue

We will link business-to-business transactions end-to-end by combining corporatetransactions such as invoicing and ordering with payment methods and thereby reduce
administrative burden.
Issues to address
Clients
Provide to users
Enhance services

Provide financeExpert matching

Regionalbanks

Professionals(Accountants)

Promote self-employment
Provide back-officebusiness DX support

Strengthen consultation
content offered to clients
Expand IT solution menu

Provide IT solutions

Provide IT solutions
Provide business
schemesNihon ICS
TIS

© 2023 TIS Inc.

Contribute to business improvement through DX
to offset declining workforce• Reduce burden of complicated businessprocesses in B2B activity, such as invoicing andordering• Digitize paper-based office work, such as
information management

Activities
Currently building system to expand share ofsolutions provided to SMEs which will enhanceconnection to professionals through theacquisition of Nihon ICS and will reinforce joint
operations with regional financial institutions.

OutlookWork toward larger shares of tax accounting andadvisory markets through synergistic effects
presented by expanded client base and use ofcloud, AI and other examples of latest
technologies.

34

Initiatives with Nihon ICS in B2B Transaction DX Business for SMEs
Building structure aimed at expanding IT solution proposals through joint efforts with financial
institutions and professionals.
- Offer IT introduction support

Businessresults

Net sales: ¥6.9 billion
Operating income: ¥2.0 billion[Fiscal year ended November 30, 2022]- Provide packages to client companies for back-office operations,such as accounting and payroll

Number of
employees

370 people [as of April 1, 2023]

Tax accountants, accounting offices

New stakeholders

Promote digitization of
professional services
Expand sales of “Genpyo Kaikei S”
for original bill accounting

Strengthen ties with financial
institutions
Co-creation with communities
and capital streamlining- Provide accounting/tax packages used by tax accounting offices
Business
activities

Small and medium-sized companies (clients)

Support business growth
Realize cashless society

Enhanced management (governance, technology development capabilities, quality, human resources development, group accounting)
Activities to generate synergy
Launch joint new business, R&D and co-creation projects

Improve existing system
performance
Speed up management
decision-making
Highlight information
disclosure and earned trust

Nihon
ICS

Emphasize DX-driven
provided value

Activities to boost value
Raise quality through enhanced technology development
capabilities / accelerate new product development
Effectively use / apply group assets
Introduce design concepts and rebuild branding

TIS

Sharpen skills ofhuman resources,
invest in IT talent
Honest — genuine
and sincere

Currently rolling out initiatives to accelerate growth of existing businesses and create new added value.
© 2023 TIS Inc.

35

Goal of Healthcare Business
ProvidedValue

We will contribute to process of healthcare DX and support efforts to encourage good
health practices by extending IT solutions to the healthcare sector as well as services
harnessing medical data collected by healthcare providers to users.
Issues to address

Medical facilities

Coordinate medical
report/insurance claim
payments
Healthcare
services
Pay service fee

User
Pay for medical treatment

Healthcare accountHealthcare
providers

Healthcare
services

Wallet ID

Payment data

Health data
健康データ

Make complicated medical office administrative
work more efficient through IT and help correct
regional gaps in healthcare• Electronic medical charts• Telemedicine using IT• Wider healthcare services using medical data

Activities• Engage in activities, such as preparation ofguidelines, instructions and rules related topersonal health records (PHR) to facilitate sounddevelopment of PHR service industry• Promote PHR with pavilion support at futureoriented society Osaka Expo 2025 and throughhealthcare platform service

Outlook

Provide services
Provide financial services© 2023 TIS Inc.

Businesses
other thanhealthcare
providers (suchas regionalbanks)

Provide services
Provide financial services

Aim to utilize growing base of medical data
through increase in subscribers to Healthcare
Passport business to offer incentives thatencourage users to follow good health practices
and to reduce administrative burden on medical
office staff through payment-embedded officesystem36

Involved in PHR Service Business Association and Efforts in
Healthcare Platform Business
Promote healthcare services that link regions with industry, government, academia and citizens.
PHR Service Business Association established in July 2023 tosupport development of PHR service business
TIS President Okamoto, one of six deputy chairpersons, serves aschairman of the Technology Committee and as an executive
officer<Aims of PHR Service Business Association>
1. Realize healthy competition among PHR-related industries and sustainable development andalso ensure international competitiveness2. Promote convenient, highly reliable client value creation utilizing digital technologies, scientificknowledge and other resources
3. Participate in PHR-related industries through broad range of businesses and encourage open
innovation

Support for pavilion at Osaka Expo 2025

Event to mark intended establishment, held on June 16,
2022, brought together representatives from participatingcompanies who pledged to establish association in fiscal
2023.

Provide healthcare network of value to companies using healthcare platform and expand number ofpeople and amount of data collected by healthcare platform through eco-system formation withcorporate sponsors of Osaka Expo 2025
<Healthcare Platform>
Provide PaaS and components to consortiums with function required to deliver PHR
services and ability to distribute PHR information to society, and to providers of PHR
services that deliver content to consumers through B2B2C.

◆Name: Osaka Healthcare Pavilion“Nest for Reborn”◆Theme: “Reborn”

チャートは大谷対応します

From Expo 2025 Osaka, Kansai, Japan pavilion site
https://2025osaka-pavilion.jp/© 2023 TIS Inc.

37

Goal of Regional Currency
ProvidedValue

We will invigorate the local economy using digital regional currency. By establishing a
structure for money, including payment fees, to flow within a region, we will enable
residents and the community at large to support the regional economy.
Issues to address
Realize value
cycle society
Service ①

Public/private
financial services
connection

Digitalregional
currency

Lower payment fees andquick cash access, anddesigned so that use leads
to local-issue solutions

Cashlesssociety a reality

Regional wallet

Seamless administrative
procedures, timely receipt
of payments/loans, tax
installments based on
duration of Residence

Service ③

Solve following issues that impede more pervasive useof cashless payments in region, help return payment
data to region, and contribute to creation of new
regional services that utilize data
• Reducing burden of payment fees on stores and time
waiting for sales to be received taking too long
• Payment data doesn’t stay in region

Activities
Moving forward on regional currency business withpriority on Aizuwakamatsu as model city
2019
Super city initiative kicks off in Aizu area
July 2023
Policy measure started, using Aizu Walletas Type 3 Digital Garden City Nation
Initiative projectAugust 2023 Premium point service launched using
Aizu Coin digital regional currency

OutlookHandy daily-living service
that provides timely accessto local information a user
wants and links to resident
ID and payment options.

Service ②© 2023 TIS Inc.

• Will promote early verification of success on public
and private-sector benefits measures and economic
policy in the region• Using data, will develop and test services that foster
behavioral change in citizens and business operators• Will promote regional development of use cases,
established in model city38Regional Currency Initiative in Model City
Aizu Coin digital regional currency service in use at 450 merchant stores in Aizuwakamatsu, a model*Number of stores, as of December 7, 2023
city.
Encourage service use and promote collection of data bypromoting measures that have citizens, business operatorsand the whole city on board. Leverage activities that return
collected data to region and foster behavioral change incitizens and business operators.
Dec 1, 2023 — (Use) Start of Aizuwakamatsu premium point service
Dec 5, 2023 — (Use) Merchant association measure as part of Digital Garden
City Nation Initiative

Information meeting on premium point service(From left) Mr. Kakihara, Mizuho Bank; Mr. Ebihara, AiCT; Mr. Muroi, Mayor of
Aizuwakamatsu; Mr. Okayama, TIS and AiCT Payments Working Group; Mr. Nakamura, TIS© 2023 TIS Inc.

Information meeting for citizens

Using Aizu Coin

39

Handling these materials• These materials are protected by Japan’s Copyright Law and the Unfair Competition Prevention Law. Unless TIS has expressly given permission, these materials shallnot be copied, duplicated, transcribed, reprinted or modified in part or in whole, inherent know-how shall not be used, and business secrets shall not be disclosed.
Company names, product names and logos are the trademarks or registered trademarks of each company.
• All statements described in these materials are based on information available to management regarding the TIS INTEC Group—that is, TIS and the subsidiaries
under its umbrella—as of the presentation date and certain assumptions deemed reasonable at this time. No intent is implied of promise by the Company toachieve such forward-looking statements. Indeed, various factors may cause future results to be substantially different from the assumptions presented in thesematerials.

© 2023 TIS Inc.