Supplementary Information

Financial results briefing for the ３Q of FY2016

August 1, 2016

GMO Payment Gateway, Inc.
(3769: Tokyo Stock Exchange section - 1 )h t t p : / / c o r p . g m o - p g . c o m /Online payment
Our group business field is mainly online payment
Face–to-facepayment

Online payment（ Point ）（ Point ）Must present credit card
Must provide signature
Use terminals such as
POS terminal & CAT
terminal

No need to present credit card
Use postcard, telephone, fax
Use Internet
Use automatic payment
machine which registers credit
card number in advance

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

2

Business outline of payment processing company(1Problems of the existing online credit card payment
ConsumerShops（merchants）①OrderLarge volume of expense sheets

TelFAX②Enter each into theCAT terminal

Post
cardnetwork③Make sales report to eachcredit card company（sales processing）④Post sales report toeach credit cardcompany

Credit card company

Authorization（get approval number）

Internet

Problems in the business Need to enter twice→CAT terminal and our system Sorting for each credit card company
 Insufficient check for deposit money⑤Check whether payment has been
received
Deposit payment

 Human error

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

3

Business outline of payment processing company(2Payment processing service
which could do credit card payment operation efficiently
ConsumerShops（merchants）

Payment processing company① Order

Update credit
card information

Tel

Post
cardnetwork

Processing sales

Submit sales report

FAXInternet②Check whether
payment has been
received＜Credit decisions in real-time＞

Credit card company

Credit. Sales

Deposit payment

In the early days of EC, offline processing was done for online credit card
payments between merchants and credit card companies, increasing theburden of each.
To solve this problem, payment processing companies have been
established and made it easier to do business.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

4

Business outline - The role of our group
We connect merchants and businesses dealing with
contracts, payment information and money transactions
ConsumerMerchants<merchants=Our Customers>

About 72,569 shops
Narrow definition EC・Internet Shopping

Our Company

Business relatedMore than 40
credit cardcompanies
Convenience
storesElectronic money

ComputeSmartphone

Public money
・National Broad Casting・Prefectures(Tokyo,Osaka)Service Commerce・Donation
・House rent
・Tuition fee
・Rental fee for Wi-fi
O2O
・Reserve for rental car
・Reserve for lunch box

Pay-easy
Cash on Delivery
Account transfer
Wallet settlement
Carrier settlement
Online accountsettlement
Payment afterdelivery
G l o b a l P a ym en t
BitCoin Payment
Multi-Currency
payment
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

etc.

5

Revenue model for credit card payments
Revenue model by merchant scale■Revenue breakdown

Merchant＜Merchants＝our customers＞①

Initial
Initial introduction fees
Coefficient： Number of merchant newly acquired
Sales：Number of new merchant acquired × ~Yen/time of introductions

Enterprise

Stock

②

GMO-PG

Customer support and maintenance fee
Coefficient: Number of merchant
Sales：Active merchants × ～Yen/month

SMEFee③

Fee charge per transaction(number)
Coefficient: Number of payment processed
Sales：Number of payments processed × ～YenStartup④

GMO EpsilonSpread

Fee charge per transaction (amount)Coefficient: Number of payment processed
Sales：Number of payments processed × ～%Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

6

Two types of contract form
Contract type and the flow of money
Direct contract
with merchants

processed payments

processed payments

Our group
Credit cardcompany（3％）
Business related

Merchants

Representativecontract
with merchants（3.0％）(3.6％）
Our group

0.6％ Merchant acquiring
service revenue

Credit cardcompany※The deposits
of merchants
Credit card company↓
Our group↓Merchants（4%）
Merchants※Numbers are provided for illustration purposes only.

Business related
The deposits of merchants
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

7

Revenue breakdown
Action plans to realize the balanced growth(¥1,000)
12,000

Merchant acquiring
Service revenue
Payment Processing
Transaction Lending
Early Payment
Finance Lease etc.

10,000Transaction processing
revenue
Payment Processing
Payment After delivery
Shipping services
Remittance Service etc.

8,000

6,000

Monthly revenue
Payment Processing
Online Advertising
Serivice etc.

4,000

2,000

Initial revenue
Payment Processing
System Development
SSL etc.

0
2004/92005/9listed onthe TSE

2006/92007/92008/92009/92008
Launched
Early
Payment

2010/92011/92012/92011
Launched
OnlineAdvertisingService2013/92013
Launched
Payment
Afterdelivery

2014/92015/9 2016/9E

2014
Launched
Transaction
Lending2015
Renewed
Early
Payment

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

8

Growth potential of the EC market in Japan
Low EC ratio and high cash payment ratio■EC ratio■The ownership rate of credit cards

12.5（％）

11.3

UK

8.2
7.6

7.3

7.0
6.4
6.0

UK

14 ％

37 ％

51 ％

US

24 ％

19 ％

43 ％Korea

69 ％

15 ％

84 ％

Australia

31 ％

23 ％

54 ％

Japan

15 ％-15 ％

5.8
5.0

5.0
4.1

5.4

4.8

4.6

3.6

4.4

2.1

2.5

2.8

3.1

3.7

0.0
2008

A+B

9.2

Japan

1.8

Debit card
usage ratio
(B)

10.4

US

10.0

Credit card
usage ratio(A)（2014）

20092010

2011

2012

2013

2014

2015

※ Ratio=(Amount handled by CC or DC) / (Private final consumption
expenditure※ Estimated by GMO-PG, CPSS Red Book
References：METI, [Market report in regard to EC 2014] , American Bureau of the Census「QUARTERLY RETAIL E-COMMERCE SALES 4th Quarter 2015」,Office for National Statistics
THE WORLD BANK「Household final consumption expenditure (current US$)」｢Retail Sales, March 2016」

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

9Our approach for Japan’s EC market
Approaching to all EC market for a rapid growth
BtoB

BtoC

CtoC

Enormous market
potential

Narrow
Definition BtoC-EC

Developing market¥1,000trillion¥13.8 trillion
EC ratio 4.8%
Growing at an annual
rate of 10~15%

OnlineGoodsBtoB
Credit cardpayment
Face-to-face¥1 trillion

Flea markets app

Service Commerce
Digital contentsFlea markets※Reference：METI, [Market report in regard to EC 2014]

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

10

Expansion of public funds and utility payments
Our approach to these public money payments

zei.tokyo(Metropolitan Tax Credit Card Payment Site)

LaunchedApril
2015

SapporoLocal governments etc. ：Local Tax (Automobile Tax,
Light vehicle tax, Fixed assets tax, etc.)
NHK：Broadcast subscription fee（ Credit card usage rate at the end of FY2015: 12.8％ ）Japan Pension Service ：National pension insurance feesOsakaGreat potential for expansion
Maintenance fees, Cram school tuition fees
Parking fees, Charge for a school meal, etc.

TokyoFukuokaKyoto※Nippon Housou Kyoukai Business Report for FY2014

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

Definition of Money Service Business（MSB：Financial Business）
Financial services that only payment processing company
can provide
ConsumerMerchant

GMO-PG group

Business related

GMO-PG Remittance Service（③）
Efficient and secure refund and remittanceprocessing for e-commerce operators

Transaction
lending（④）
RefundRemittance

Credit card companies
Convenience storesElectronic money
Mobile phone companies
etc

Financing money
for growth

Dealing with daily transactions

Revenue model (sales breakdown)①②③④

Early payment（④）
Early payment

PaymentImproving cash flows by moving up
the date of payment to member stores

InitialStock
FeeSpread

Payment after delivery（③）
Improving cash flows“GMO payment
after delivery”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

12

Segment/Revenue model/Service
３ Segments and ４ Revenue models
３ Segments
Payment processing
business

4 Revenue models
Payment processing
System development

Initial(Initial revenue)etc

Payment processing
SSL
System development

Stock

Payment after delivery(Monthly revenue)

Payment processing
Online Ad Serviceetc

Remittance Service

Money service
business

Payment processing

Transaction lending

MSB
Fee

Early payment

Finance Lease(Transaction
processing revenue)

Remittance Service
etc

Payment processing

SSL
Delivery service

Payment after delivery

Delivery service

etc

Online Ad Service

Othersetc

etc

SpreadTransaction lending(Merchant acquiring
service revenue )Early payment
Finance Lease

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

etc13■Online Advertising Service（GMO-PG）■GMO-PSSales
Amount of processed payments

10/3
10/6
10/9
10/12
11/3
11/6
11/9
11/12
12/3
12/6
12/9
12/12
13/3
13/6
13/9
13/12
14/3
14/6
14/9
14/12/1
15/3
15/6
15/9
15/12
16/3

10/3
10/6
10/9
10/12
11/3
11/6
11/9
11/12
12/3
12/6
12/9
12/12
13/3
13/6
13/9
13/12
14/3
14/6
14/9
14/12
15/3
15/6
15/9
15/12
16/3

10/3
10/6
10/9
10/12
11/3
11/6
11/9
11/12
12/3
12/6
12/9
12/12
13/3
13/6
13/9
13/12
14/3
14/6
14/9
14/12
15/3
15/6
15/9
15/12
16/3New Business

GMO-PG group’s new business and profit status■GMO-FG

Ordinary income

Joined as an
Equity method application
concerned company inJanuary,2010

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

14

GMO-PG Group
GMO Payment Gateway’s subsidiaries and affiliated company
GMO PAYMENT GATEWAY, Inc.
＜ Consolidated subsidiary＞
Multiple payment（small scale）

GMO Epsilon, Inc.
Payment after delivery（Financial results for the term ending September 30,2015）

Sales：1,865 million yen, Ordinary income：1,220 million yen

GMO Payment Service, Inc.
Overseas

GMO PAYMENT GATEWAY PTE. LTD.

（Singapore）

GMO PAYMENT GATEWAY HONG KONG LIMITED（Hong Kong, Taiwan）

GMO PAYMENT GATEWAY MALAYSIA SDN. BHD.

（Malaysia）

GMO PAYMENT GATEWAY (THAILAND) CO.,LTD.

（Thailand）< Equity-method affiliate >Face-to-face field

GMO Financial Gate, Inc.

（As of April,2015）Proportional share 49.7％
The company changed its name from Consumer Open Center on April 10,2015

Multiple payment

SMBC GMO PAYMENT（Established November,2 2015）Proportional share 20.0％
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

15Company outline■Name

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

March 1995

■Location

1-14-6, Dogenzaka, Shibuya-ku, Tokyo, Japan■Capital stock

4,712 million yen■Major shareholders

GMO Internet, Inc. 、Issei Ainoura ,etc

■Members of the Board

Chairman & Director
President & Representative Director
Executive Vice President
Executive Vice PresidentManaging Director
Director
Director
Director
Director
Director
Senior executive officer
Senior executive officer
Executive officer
Executive officer
Executive officer
Executive officer
External Director
External Director
AuditorExternal Auditor
External Auditor
AuditorExternal Auditor■Managing underwriter（Main）Nomura Holdings, Inc.、（Sub）Mizuho Holdings, Inc.

■Auditor

Deloitte Touche Tohmatsu LLC■Subsidiaries

GMO Epsilon, Inc. GMO Payment Service, Inc.
GMO PAYMENT GATEWAY PTE. LTD. GMO PAYMENT GATEWAY HONG KONG LTD.
GMO PAYMENT GATEWAY MALAYSIA SDN. BHD. GMO PAYMENT GATEWAY (THAILAND) CO., LTD
GMO Financial Gate, Inc. SMBC GMO PAYMENT, Inc.

■Affiliated companies

Masatoshi Kumagai
Issei Ainoura
Ryu MuramatsuSatoru Isozaki
Yuichi Hisada
Yasuhiko Kimura
Tomoyuki Murakami
Tadashi Ohshima
Shinichi Sugiyama
Yusuke Arai
Takeshi Yoshii
Masaru Yoshioka
Katsunari Mukai
Jyunya Tokuyama
Yoshikazu Yanagishima
Kazunari Taguchi
Masaya Onagi
Akio Sato
Yasuhiro Kanda
Akihiro Suzuki
Masashi Yasuda
Takashi Iinuma
Kazuo Ikeda（As of June,2016）

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

16