IR Introduction- Business Overview & Business Model Q3 FY2023

August 10, 2023
74th Investor Meeting

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

0. At a Glance
Key features of GMO-PG group’s business model and the mechanism of sustainablegrowthMarketValue
Proposition

CustomerBase・Broad-based & high growth payment market✓ Repeating and indispensable part of any
commercial transaction✓ EC penetration (JP 9% vs. US/Euro
approx. ~30%）✓ Cashless adoption (JP 36%/vs. US/Euro
approx. ~60%)✓ FinTech and DX
・Contributing via “payment＋α”✓ Growth support and business operation
reform (toB)✓ Improving convenience (toC)✓ Decarbonization and financial inclusion(toSociety)・Cross-industry
・High growth industry leaders・Public sector

Positioning

Competitive
advantage

Revenuemodel

・Expand business domain✓

GrowthStrategy

Credit card payment⇒Multi-payment⇒
Offline⇒FinTech⇒Global⇒DX・Enlarging project size through high-value
proposals to large customers

Management
Discipline

・Leading player✓ GMV ¥11.3 trn (FY2022)✓ Revenue ¥50.2 bn（FY2022)✓ Employees 799（End-Sep 2022)
・High entry barriers

・Sales, system development, customer support
capability and reliability
・Scale merit
・Proprietary applications
・Diversification through consolidated management(offline, BNPL, BaaS support)

・Stock ＆ transaction✓ Balancing growth and stability
・Mutually enhancing model (customer
growth = increased payments)
・High operating margins (over 30%)
・Low churn rate

・17 consecutive years of revenue and profit
increase, achieving earnings guidance・Performance based remuneration
・Highly experienced leadership team fromentrepreneurs, start-ups, management(0⇒10⇒100)

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

2

1

Business
Overview

p.4

2 Focus Areas

p.18

3 Reference
Materials

p.36

Abbreviations used in the materials are as follows:
GMO-PG : GMO Payment Gateway
GMO-EP : GMO Epsilon
GMO-MR : GMO Medical Reservations Technology
GMO-PS : GMO Payment Service
GMO-FG : GMO Financial Gate
GMO-CAS : GMO Card System
PF: Platform
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

3

1.1 Our Track Record of Growth
The results of management policy focused on sustainable growth（Mil Yen）

59,10060,000

Revenue*1+17.5％（Mil Yen）（Mil Yen）

20,00025,00022,901
EBITDA*1.2+24.4%+25.0%

50,29850,00020,311

Operating Profit*1

20,000

16,24918,40315,00040,00015,00030,00010,00010,00020,000
5,000

5,000

10,000J-GAAP

IFRS

Operating Stores*3 *4
Consolidated
155,598

J-GAAP

IFRS*3*5

Annual TRX volume(trailing 12-month average)
Consol.
Online payment
5.86 billion

5.33 billion

J-GAAP

23/9E

22/9E

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

22/9

23/9E

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

0

10/9

23/9E

22/9

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

11/9

10/9

0

10/9

0

IFRS

*3

Annual TRX value(trailing 12-month average)
Consol.
Online payment¥14.0 trillion¥10.1 trillion*1 Macro Kiosk has been deconsolidated in FY ending September 2020, the figures for revenue, operating profit and EBITDA present the continuing operations only and exclude the discontinued
operations.
*2 EBITDA under J-GAAP is calculated as the sum-total of operating profit and depreciation and amortization; EBITDA under IFRS is calculated as the sum-total of operating profit and depreciation.
*3 Operating stores present the figures for GMO-PG and GMO-EP; transaction volume and value present figures for GMO-PG, GMO-EP, GMO-PS, GMO-FG; of this, online payment present figures for
GMO-PG, GMO-EP and GMO-PS. The number of operating stores is at the end of June 2023. Annual transaction volume and transaction value are the figures from July 2022 to June 2023.
Annual transaction volume (trailing 12-month average) and transaction value (trailing 12-month average) include the figures of GMO Financial Gate Inc*4 The standards for calculation the number of operating stores has been revised from Q3 FY2023. Figures exclude a specific case and fincode byGMO. If included, the number of operating stores is562,598 stores (up 31.6% YoY).
*5 TRX volume is calculated based on fee revenue standards, which in the case of online consist of multiple (1 to 3) transactions per payment of a single authorization or actual proceed amount,
and one transaction per payment in the case of offline.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

4

1.2 Consolidated management
Realize Group-wide stable growth through sound business operation that agilely
responds to the business environment of each of the major Group companies

Omni-channel Strategy

Expand payment
method offerings
Share customer base

Diverse customer
coverage

Sharing of management principles, corporate culture and group-wide
resource allocation
GMO-PG
Major
Business

Customer

GMO-EP

GMO-FG

Payment Processing Business
Online

GMO-PSBNPL business

OfflineOnlineMunicipalities, large to
mid-sized corporates

Small operators

Offline stores,
Unattended machines

EC operators, consumers

Non-merchandise, andmerchandise

Mainly merchandise

Non-merchandise, andmerchandise

Mainly merchandise

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

5

1.3 Three Business Segments
Sustain an over 25% OP growth from the expansion of mainstay payment
processing business and its peripheral businesses
Payment Processing Business2%
22％

・Online Payment*￥

・Offline Payment
・Ginko Pay/Processing
・System Development

GMO Payment After
Delivery/GMO B2B Pay
On Credit

Money Service Business・GMO Payment After Delivery/
GMO B2B Pay On Credit（Actual data for Q3 FY2023）

Online payment

Revenue
Breakdown

Offlinepayment

76％

・Remittance Service/Instant Salary byGMO￥

・Overseas Lending
・Early Payment Service

1%

・B2B Factoring
・Transaction Lending

Payment Enhancement Business・Online Advertising Service
・SSL Service￥

12%

Operating
ProfitBreakdown

・Delivery Service

87%・Medical Kakumei byGMO* Online payment includes pay-as-you-go and recurring payment and Z.com Payment (overseas payment service).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

6

1.4 Our Business Eco-system
An expanding eco-system where the value-added services
complements the main business to achieve mutual growth
Increase inpayment processing
Payment processing（Gross margin 85％）

Money Service
Business
Payment
Enhancement
Business

Payment
Processing
Business

Customer growth
Main Business

Value-added business that
contribute to the growth ofthe main business

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

7

1.5 Revenue Trend by Segment
3 segments of Payment Processing Business, Money Service Business
and, Payment Enhancement BusinessIFRS

J-GAAP（Mil Yen）

Payment
Enhancement
Business

60,00055,000Money
ServiceBusiness

50,00045,00040,00035,00030,00025,000

Payment
Processing
Business

20,00015,00010,000
5,000
0
04/9

05/9

TSE
Listing

06/9

07/9

08/9
2008
Launched
Early
Payment
Service

09/9

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

21/9

2018
2010
2011
2013
2014
2015
2016
2020
Launched Launched
Launched Launched Revamped Launched Consolidation Deconsolida
of GMO MR
OfflineOnlinePayment Transaction Early
servicestion of MK*
Payment Advertising After
Lending
Payment targeting banks
Service
DeliveryService
GMO-FG/MK*
become subsidiaries

22/9

23/9E

2021
Buffortbecomes a
subsidiary* There was only one segment of Payment Processing Business until September 2015; segment information disclosure began from FY ending September 2016. MK stands for MACROKIOSK.
Due to the deconsolidation of MACROKIOSK from FY2020, its business has been reclassified as a discontinued operations and is excluded from the revenue figures shown above.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

8

1.6 Our Value Proposition
Businesses and services to comprehensively cater to customer’s needs
Issues & Needs

Value Proposition

Payment
Processing
Business
Money Service
Business

・Cumbersome implementation work
・Time consuming payment admin work,
Merchant
less time for main business・Concerns over system troubles

・Package of diverse payment methods withcentralized management
・Cut cost and payment/invoicing work
・Advanced system and customer support

Consumer ・Limited number of・Broad range of payment methods offered・Safe and smooth payment experience

・Long lead time to deposit (long cash
Merchant
cycle)
・Difficulty in recruiting personnel

・Improve cash flow cycle with early
payment of sales proceeds
・Salary prepayment service offered

Consumer ・Cannot choose the timing of payment

・Flexible payment timing with GMO
Payment After Delivery

payment methods
・Concerns over payment security

Payment
Enhancement
Business

Merchant

・Need to grow revenue

Consumer ・Long waits at medical institutions

・Support revenue growth throughonline ad placements
・Reservation system for medical
institution that enables seamlessservice from reservation to payment

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

9

1.7 Positioning of GMO-PG group
Connecting merchants and payment companies through ‘contracts,’‘payment information,’ and ‘money flow’.
Consumer

Merchant

GMO-PG consolidated
subsidiaries

155,598 stores*1

40+ Credit cardcompanies(As of end-Jun 2023)

Convenience store

EC
PC

B2B・B2C・C2C

Taxes, Dues, Utility
NHK, Electricity bill,
National Tax Agency,
Municipalities

Smartphone/
TabletAccount Transfer
OnlineCarrier billing
Bank transfer

Subscription

E-money

Video streaming
Software, Apparel

Cash on Delivery

Service/Commerce
Digital content
Donation, Insurance,
Travel273,298 terminals*2(As of end-Jun 2023)

Payment
Terminal

Payment
Companies

GMO Payment
After Delivery
OfflineQR codeID-based payment
Multi-currency
Pre-paid*1 The standards for calculation the number of operating stores has been revised from Q3 FY2023. Figures exclude a specific case and fincode byGMO. If included, the number of operating stores is562,598 stores as of end of June 2023 (up 31.6% YoY).
*2 Operating payment terminals: Starting from FY2021 the figure presents the combined number of payment terminals sold through sales partner and embedded-type payment terminals, up 48.7% YoY.
Operating terminals exclude GMO-PG’s offline payment (GMO Cashless Platform),.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

etc.

10

1.8 Payment Processing Business:
Revenue Model of Credit Card Payment Processing

Revenue model determined by merchant size and type
■Four revenue types (i.e., business models)① Initial (Initial revenue)
Payment Terminal Sales
Coefficient: Number of terminals (units)
Revenue: Terminal sales (units)
× _Yen; paid at start of service■Revenue type determined by merchant type/size

Municipalities
Some Large Enterprise② ③② Stock (Fixed revenue)
Fixed Monthly Revenue
Coefficient: Number of operating stores
Revenue： Operating stores × _Yen

③ Fee (Transaction processing revenue)
Fee based on transaction volume
Coefficient: Number of payments processed
Revenue： Number of payments processed× _Yen④ Spread (Merchant’s revenue)
Spread on the transaction value
Coefficient: Value of transaction
Revenue： Value of transaction × _%Sales of Payment
Terminals①

Large and middle-sized
merchants② ③ ④Start-ups/
Small businesses④

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

11

1.9 Payment Processing: Two types of merchant contracts
Direct Contract

Payment
Processing

No. of contracts
Several contracts withmultiple payment
companies

Revenue type
② Stock③ Fee

2.8% Merchant Discount Rate (MDR)（Large GMV = Lower）

MDR
Direct negotiations withpayment companies
GMO-PG’s role
Data processing only

Payment
Processing

Revenue proceeds

Merchant A

Payment
Company

Mainly large companies
and municipalities

Flow of Revenue and charges

Representative
Contract
No. of contract
Single contract with
GMO-PG

Gross take rate 3.0％
Sales proceeds(merchant contract)

Sales proceeds
0.5% Spread
3.2% MDR

Merchant B

Mainly SMEs, but may
include large companies② Stock④ Spread（Smaller GMV = Higher MDR）
(If merchant has direct contract with payment
company)

Revenue type

③ Fee

（Merchant revenue）

MDR
Reduceable via GMO-PG
GMO-PG’s role
Data processing/
Deposit of sales
proceeds

Wholesale rate 2.5％

Payment
Company（In considerationof acquiring themerchant）

Flow of Revenue and charges* Figures included are shown for purpose of comprehension only.
* This illustration represents the contracts for credit card. GMO Epsilon revenues are only derived from spreads (See page 11).
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

12

1.10 Revenue Breakdown by Business Model
Aiming for a balanced revenue growth by pursuing various initiatives（Mil Yen）

J-GAAP

60,000IFRS

55,00050,000Spread45,00040,00035,00030,000Fee

25,00020,00015,000Stock
10,0005,000

Initial
0
04/9

05/9

TSE
Listing

06/9

07/9

08/9
2008
Launched
Early
Payment
Service

09/9

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

2018
2010
2011
2013
2014
2015
2016
2020
Launched Launched
Launched Launched Revamped Launched Consolidation Deconsolida
of GMO MR
OfflineOnlinePayment Transaction Early
servicestion of MK*
Payment Advertising After
Lending
Payment targeting banks
Service
DeliveryService
GMO-FG/MK*
become subsidiaries

21/9

22/9

23/9E

2021
Buffortbecomes a
subsidiary* MK stands for MACROKIOSK* Due to adoption of IFRS accounting standards, the online marketing service (stock) and finance lease (spread) revenue recognition standard is changed from gross basis to net basis from fiscal year ending
September 2018. Due to the deconsolidation of MACROKIOSK from FY2020, its business has been reclassified as a discontinued operations and is excluded from the revenue figures shown above
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

13

1.11 Summary Table of Segments, Business Model and Services

Reporting in 3 Segments and 4 business models
Business Model
Initial（Initial revenue)

Segment
Online Payment*
Offline Payment

SSL Service
Online Payment
Offline Payment

Stock(Fixed revenue)

Online Payment* / fincode byGMO

Payment Processing
Business

Ginko Pay / Processing / GCP*

Ginko Pay / Processing / GCP*
System Development

System Development
GMO Payment After Delivery
GMO B2B Pay On Credit

Online advertising service
Medical Kakumei byGMO

Remittance Service
Instant Salary byGMO

Online Payment
Offline Payment

Fee(Transaction
processing revenue)

Offline Payment

GMO Payment After Delivery
GMO B2B Pay On Credit
Remittance Service
Instant Salary byGMO

Overseas Lending

Money Service Business
Early Payment Service

Delivery service

B2B Factoring

Medical Kakumei byGMO

Spread(Merchant acquiring
service revenue)

Online Payment /fincode byGMO

Transaction Lending

Offline Payment

Online advertising service

GMO Payment After Delivery
GMO B2B Pay On Credit
Overseas Lending
Early Payment Service

Payment Enhancement
Business

SSL service
Delivery service

B2B Factoring
Medical Kakumei byGMO

Transaction Lending* Online Payment includes pay-as-you-go payment, recurring payment, Z.com Payment (overseas payment service) and GCP stands for GMO Cashless Platform.

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

14

1.12 Competitive Advantage and Achievements
Expand value provided to clients to contribute to client’s growthCompetitive Advantage

Product

Nos. of payment
methods

Sales
Capability

Sales Personnel

Development
Capability

Engineer
Personnel

Past

Present（As of end-Sep 2011）（As pf end-Sep 2022）

１

Over 30

Credit card pure-play（payment)（*Before 2005）

Multi-payment
Implemented Open API type from May 2023

Approx. 350*1

Approx. 40

Industry specific sales teams

Approx. 268*1

Approx. 30

Customer
SupportCapability

The only payment service company to be awarded theSeven Star rating for “HDI Support Center Certification” *2

Investment
Capability

GMO Global Payment Fund: Market value approx. 20x the initial investment
amountAnnual TRX Value

Approx. ¥0.9 trn

Approx. ¥11.3 trn

Operating Stores

Approx. 26K

Approx. 142K

Approx. ¥9 mil

Approx. ¥20 mil

Reliability

Achievement

Per Employee

Operating
Profit11/9
列1*1 The number of sales and engineer personnel includes partners of GMO-PG group of consolidated subsidiaries and exclude external collaborators.
*2 HDI: World’s largest membership organization of IT support services.

22/9

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

15

1.13 Continuous Achievement of OP Target
Earnings targets achieved through a highly visible earnings structure
and a disciplined business operation
Operation Profit*（Mil Yen）

Initial Forecast
Actual

20,00018,000Continuing stable growth while overcoming external volatilities

16,00014,0002020
COVID-19

12,0002019
Consumption tax
8→10％

10,000

8,000

6,000

4,000

2,000

2014
Consumption tax
5%→8％

2011
Great East Japan
Earthquake

2008
Lehman Shock

0
08/9

09/9

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

21/9

22/9

23/9E

* Initial forecast for FY2018 is based on revised forecast to reflect the voluntary adoption of IFRS. Figures before FY2019 present operating profit before the deconsolidation of MACROKIOSK and include both
continuing and discontinued businesses.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

16

1 Business
Overview

p.4

2 Focus Areas

p.18

3 Reference
Materials

p.36

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

17

2.0 Focus Markets
Sustain high growth from expanding revenues in existing services
and entering new domains
Revenue trend by consolidated subsidiary and/or service(¥ bn）
50

GlobalLoan balance
40

2016

2017
Launched BaaS
Support service(GMO-PG)

Approx. ¥13.0 bn

BaaS
3-yr CAGR 35%

Consolidated subsidiary

Offline2015
Launched Money Service
Business (GMO-PG)

30

GMV ¥4 trn
Operating terminals

2013
20

220K units

Established

FinTech
GMO-PS revenue

2012
Established global office

Approx. ¥7.0 bn

2005

10

Broadly-definedEC

Joins GroupGMV ¥10 trn
0
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

* Figures represented are before adjustments and eliminations.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

2.1.1 Narrowly-defined EC: B2C EC Market
Low cashless and EC penetration compared to US/European countries
EC Penetration Rates in Developed Markets*1

Cashless Penetration (ratio of private final consumption)*2 *3（¥trn）

(%)

UK

31.0

USA
30.0

Japan

Credit Card
Debit card
E-money
QR Code

27.9
120

(%)
40%

36.0
35%

32.5

26.5

25.0

Gov’t Future: 80%
target 2025: 40%

Cashless Penetration

140

29.7

100

30%

26.8
20.0

24.1

17.9
16.2
14.5

15.0

80

19.1

14.6

14.7 14.7

9.2
7.0

8.2

6.4
5.4 5.8
5.0
4.6
4.1
4.4
3.7
3.6
3.1
2.8
2.5
1.8 2.1

7.3

6.0

5.0

64%

10.5

10.4

7.6

94%

4.8

20%

60

12.5
11.3
10.0

25%

21.3

8.2

8.8

5.4 5.8

9.6

8.8
8.1

6.2

40

15%

62%

6.8

10%

56%
20
5%

0
0%
17
18
19
20
21
22
23
24
25
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
*1 METI “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”, U.S. Bureau of the Census “The 1st Quarter 2023 Retail
E-Commerce Sales Report”, U.K. Office for National Statistics ”Retail Sales Index internet sales, July 2023”*2 Cabinet Office “System of National Accounts”, Japan Consumer Credit Association’s Credit Card Statistics, Bank Of Japan’s Payment and Settlement Statistics, Payments Japan Association’s Code Payment
Statistics*3 Figures for South Korea, UK and USA are excerpts from Payments Association Japan’s “Cashless Roadmap 2022,” figures for Taiwan are from National Development Council and figures for Japan are takenfrom METI’s “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey).” Actual figures are used from Taiwan up to 2019,2020 for South Korea, UK and USA and, 2022 for Japan.
0.0

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

192.1.2 Characteristic of Payment Business: Cross-Industry
Payment is a required action for any purchase and is a highly repetitive
application

Finance

Taxes

Water Supply

MedicalApparelPublishing

Manufacturing

EnergyLogistics

Education

Utility Bill

Digital Content

Provide payment infrastructure – anindispensable part of commercial
transactions – various industries

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

20

2.2.1 Broader EC: Expanding Scope of Cashless BusinessJapan’s migration towards cashless payment contributes to accelerating
the growth of GMO-PG group
B2B

B2C

C2C

Narrowly-defined B2C EC market*1¥20.7 trillion
EC ratio: 8.8%

Enormous market¥1,000 trillion

EC ratio (%)
Market Size

2021 (Act.) 2025 (Est.)
8.8
12¥20.7trn¥36trnPublic dues/Utility*2・Local tax¥42 trn・National tax ¥74 trn

Service, Commerce
Subscription
Omni-channel

Flea Market App

Expansion phase¥1.95 trillion

Sharing Economy

Broader EC
B2B
Credit card payment

Consumer spending*3¥300 trillion*1 References：METI’s “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)” and Yano Research Institute Ltd. .
Figures for 2025 are the company’s estimates.
*2 MIAC “Breakdown of national tax and local tax revenue (FY2023 Budget and Local Government Finance Plan)”, *3 THE WORLD BANK ”Household final consumption expenditure (current USD)”*4 Payments Japan Association’s “Cashless Roadmap 2019”; Yano Research Institute’s “Domestic Cashless Settlement Market 2022.”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

2.2.2 Broader EC: Public Dues and Utility Bills
Entered into the public dues/taxes sector in 2006 when Local Autonomy
Law was amendment; pioneered credit card payments in this sector
Tax

National tax credit card payment website
National tax smartphone app payment service
Local Taxes, hometown tax
Water bill, etc.

NHK

Broadcasting subscription fee
Credit card usage rate at the end of FY2022:
18.6% (Up ＋0.5％ YoY)*

Electric Power Supporting digitalization of electric billGas
payment to realize significant shift towards
paperless operations. Making progress incross-industry deployment of service.

Expansion expected to continue:
maintenance fee, cram school tuition fee
parking fee, school meal charge, etc.
* Japan Broadcasting Corporation “Business Report for FY2022”
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

22

2.2.3 Broader EC: Transaction Volume*
Stable growth by capturing pay-as-you-go and recurring payment（100 million
transactions）
45

40

35

30

Pay-as-you-go
payment

Digital content
subscription

Payment occurs at each

25purchase
20

15

Electricity bill
10

Water utility bill
5

Recurring payment
Fixed amount paid

NHK Reception Fee

periodically
0
03/9

04/9

05/9

06/9

07/9

08/9

09/9

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

21/9

22/9

* TRX volume is calculated based on fee revenue standards, which in the case of online consist of multiple (1 to 3) transactions per payment of a single authorization or actual proceed amount, and one
transaction per payment in the case of offline.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

23

2.2.4 Broader EC: Transaction ValueTRX Value = Sustainably grow revenues at client/merchants that we support/service（¥ trillion）
8

7

6

Direct Contract
56%
5

4

3

2

Representative
Contract
44%

1

0
03/9

04/9

05/9

06/9

07/9

08/9

09/9

10/9

11/9

12/9

13/9

14/9

15/9

16/9

17/9

18/9

19/9

20/9

21/9

22/9

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

24

2.3.1 FinTech: Money Service Business
Financial services that only a payment processing company can offer

Service
GMO Payment After
Delivery

Related assets③ Fee

Pay the sales proceed ahead ofthe deposit from the consumer

Accrued revenues

Improves cash flows by bringing
forward the payment date

Advances paid

④ Spread

GMO B2B Pay On Credit

Early Payment service
Overseas Lending
Transaction Lending

Lending of growth funds

Business Model

Accounts receivable-trade(short term loans)④ Spread④ Spread

B2B Factoring

Early cash conversion of
accounts receivable

Accrued revenues④ Spread

Remittance service

Efficient and secure refund
and remittance processing

N/A③

Receive salary at preferred timing

n/a (deposit-type)
Advances paid
(reimbursement-type)③ Fee

Instant Salary byGMO

Fee* Instant Salary byGMO is offered in two types of deposit-type and reimbursement-type. Advances paid is recorded only for the reimbursement-type.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

25

2.3.2 FinTech: Japan’s BNPL market

Expand business by capturing the Japan’s unique BNPL needs
Outlook of Japan’s BNPL market

BNPL needs in Japan

Consumer

Merchant

・Receiving goods before payment
・Cash payment
・Manage and control spending
・Limit face time with delivery person

A growing payment method driven by the
expansion of EC, used in conjunction withcredit card and as an alternative to cash-ondelivery and CVS payment (prepayment).

(Unit：¥ bn）

1,993
1,808

1,617

・Widen customer reach・Means of sales promotion
・Reduce & manage return risk

1,437
1,265
（estimate）

EC market breakdown by payment method（by value）
Other 8.3％
Pre-paid
7.0％
Carrier billing
8.5％
Cash On
Delivery
5.8％+13.6%

Credit card
60.5％
Forecast to expand
further

EC Market Size
¥20.7 trn*1 *2
EC penetration 8.8%
CAGR 10％

CVS store
9.9％
Migrate to BNPLFY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026*1 METI “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”*2 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2022” *3 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2023” and “Domestic Cashless
Settlement Market 2019.” The figure for FY2022 is an estimate, the figures for FY2023～FY2026 are forecasts.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

26

2.3.3 FinTech: Instant Salary byGMO
To be the de facto digital and seamless service provider in the¥225 trillion salary market
Collaboration with SMFG
2015

2016

2017

2018

Growth Trend (image)
2019

2020

2021

2022

Positive BusinessprofitReorganizationAnestablishedsalaryPrepayment(“sokkyu”)
service

Expertise inpayment andremittance

Capital & Business alliance and Thirdparty allotment

Entered the enormous salarymarket that still depends on
old-fashioned cash handouts
and analog processes

Target Market

Service expansion

Approx. 2 mil salary prepayment users

Salary banktransfer market
Approx.
¥225 trn
2021/7

Launched in Jul. 2021

Acceleration of new customer acquisitions
Major sectors: Logistics & transport, delivery, relocation services
Employment type: temporary staff, part-time, etc

2007
SMBC Group launches“Sokkyu” service

2021/12
Strengthen collaboration with
SMBC
Added real time bank deposit
function* SMFG: Sumitomo Mitsui Financial Group, Inc. SMBC Group: Sumitomo Mitsui Banking Corporation group (including Sakura Information System Co. Ltd.)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

27

2.4.1 BaaS（Embedded Finance）
One-stop payment solution by leveraging our payment know-how and track record
Revolutionary credit card issuing system “H-ALIS”*

GMO-PG Processing Platform

クレジット
Issuing
カード
Gateway
イシュイング
サービス

FEP

ハウス
Network
ソリューション
サポート
Acquiring
Prepaid Card
Issuing

Management
dashboard
カード会員利便性向上

CommonPlatform

House
デビット
Solution
プリペイド
カード
カードCardDebit Card Issuing Credit
イシュイング
Issuing
イシュイング
サービス
サービス

対外接続
External connectivity
マーケティング・販売促進 等

Rollout from Oct. 2023 through collaboration among 4
companies: GMO-PG will carry out development, FEP
and sales in Japan【Background】【Background】

・Expansion of cashless/DX needs
・Financial services provided by business operators

Operators have growing need for speedy issuing ofvarious types of credit cards to promote theircashless initiatives【Value Proposition】【Value Proposition】

Freely choose from payment solutions andcommon platform according to business needs

・Enables low-cost and swift credit card issuing・Seamless system linkage by using API base・Prompt functional upgrades* The four companies refers to Hyundai Card Co., Ltd., Bankware Global Co., Ltd., EXA CORPORATION, GMO Payment Gateway, Inc.
FEP stands for Front End Processor and refers to the system required for a credit card company to connect/access an external network.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

28

2.4.2 BaaS/IoT
Increase Ginko Pay adopters, interlink each service to create an infrastructure-likeservice
Ginko Pay

GMO Cashless Platform

Smartphone-based payment app that allows
for immediate debit from user’s bank account,marketed to financial institutions

Cashless solution for offline stores that offers a packageof payments methods including QR/Bar code.
Planning to launch new cashless payment method.

The Hokuriku Bank

The Hokkaido Bank
Sumitomo Mitsui
Banking Corporation

The Hiroshima Bank

The Bank of Fukuoka

Ginko Pay

Japan Post Bank

銀行Pay

The Kumamoto BankThe Juhachi-Shinwa Bank

QR/Bar code Payment
services

Offlinestore

GMO
Cashless
Platform
Bank of Yokohama

Bank of Okinawa（As of June 30, 2023）

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

29

2.5 IoT: Offline Payment Market
Scale-up business through cashless migration and alliance strategy
Offline payment：GMO Financial Gate, one of our Group companies, offers payment terminals for payments madeat offline stores.
【Growth factors of the offline market】
Cashless demand from changing externalities such as the“new normal” lifestyles
Mobile terminal

Embedded-type EMV* terminal

Target: Unattended Market

Vending(Goods)TicketCoffee Machine

Fare Adjustment(Golf, hotel)

Vending(Beverage/Food)

EV Charging Station
Parking Fee

Self Check-out

Coin Laundry

Capsule toy machine【stera】
Rollout of a new payment platform to provide a onestop service that handles variety of payment methods.

* EMV：Uniform standard for IC-chip embedded credit cards formulated by Visa and MasterCard.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

30

2.6.1 Global: Overseas Strategy
Leverage overseas expertise to focus on growth markets of SE Asia and India
Business Area

グロース
センター
India & SE Asia

Japan

North America

Profit Center

Innovation
CenterInnovation
CenterGrowthCenterInvestments and Borrowers*1

StrategyCountry

Payment Processing Business
Collaborate with investee to provide local payment
services

Money Service Business
Invest/Lend to key FinTech companies
in North America and Asia
・Acquire, introduce and transfer thelatest expertise and know-how
・Strengthen relations withborrowers and investees

Payment Processing
Business
Money Service
Business

Major investees

Major borrowers*2

Payment
Processing
Business*2*2

Money Service
Business*1 Investment and borrowers of GMO Payment Gateway and GMO Global Payment Fund

*2

*2

*2

*2 Already divested and/or investment recovered.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

31

2.6.2 Global: The 20-year track record of overseas investment strategy
Major functions shifted to India/Pacific region: Evolving into a credit provider from a payment
service provider
Major overseas investment and loan portfolio

Market expansion of SE Asia & India
8%
Penetration

BtoC EC
GMO-PG Asia location

TAM*2¥40 trn

6%*1

TaiwanHong Kong
India
GDP
ThailandApprox. ¥400 tr
7-8% growthPhilippines

2010

2022

Payment Service Provider

Singapore

Over ¥350 trn

BtoB EC

2030

Credit Provider

Singapore
SE Asia

Indonesia

Emergence of high-growth FinTechs

GDP
Approx. ¥400 tr
5-6% growth
Image of the increase in FinTech unicorns supported
by GMO-PG
5 companies

Over 25/Over 50 companies

・・・

・・・

*1 Calculated using final private consumption and B2C EC penetration rates for both regions*2 Figures are GMO-PG estimates using GDP forecasts for both regions and BtoC/BtoB EC market penetration rates for US/Japan
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

32

2.7.1 Sustainability
Integrated Report outlines the various initiatives to realize sustainability
29th Integrated Report
URL：URL: https://www.gmo-pg.com/en/corp/newsroom/pdf/20221219_gmo_pg_ir_integrated_report_en.pdf

Specific initiatives (excerpt)
Realize convenient and comfortable society bypromoting EC and cashless adoption

Promote impact finance to financial inclusion FinTech
companies (microfinance)

Support merchant’s decarbonization through DX
support and paperless operations

Due to switch to payment processing using what is
effectively renewable energy sources to reduce GHG
emissions (Scope 1+2) by 84% (YoY)

Selected as Best Place to work for 9 consecutive
times by the Best Place to Work survey

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

33

2.7.2 Strengthening Governance Structure
Realize medium- to long-term improvement in enterprise value throughstrengthening of supervisory function of the Board
Corporate Governance Organizational Structure➀ Transition to company with Audit andSupervisory Committee①②➁ Proportion of External Directors rises to a third③ Established a Special Committee③

・Comprised of five Independent External Directors
・Strengthen protection of interest of non-controllingshareholder
・Transactions and actions that entail a conflict of interest
between controlling shareholder and non-controllingshareholders are evaluated and deliberated at the Special
Committee and reported to the Board which is vested toreach a decision

External Director
Special Committee
Director
Directors that are members of the Audit
and Supervisory Committee

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

Man
Woman

34

1

Business
Overview

p.4

2 Focus Areas

p.18

3 Reference
Materials

p.36

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

35

3.1 Company Outline (as of June 30, 2023)■Name
GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange Prime)■ Date of establishment

March 1995

■ Location
FUKURAS office (Head office)
SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku,
Tokyo, 150-0043 Japan
Humax Office
Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku,
Tokyo Japan■ Capital stock

13,323 million yen■ Major shareholders
GMO Internet Group Inc., Sumitomo Mitsui Banking Corporation,
Mr. Issei Ainoura, etc.
■ Auditor
Ernst & Young ShinNihon LLC■ Major consolidated subsidiaries
GMO Epsilon, Inc., GMO Payment Service, Inc.,
GMO Financial Gate, Inc.,
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), etc.
■Major Equity affiliates
SMBC GMO Payment, Inc.
GMO Data, Inc., etc.

■Management team
Chairman & Director
President & Chief Executive Officer
Director, Executive Vice President
Director, Executive Vice President
Director
Director
Director
Director
Director
Director
External Director
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee
Senior Managing Executive Officer
Senior Managing Executive Officer
Senior Managing Director
Senior Managing Director
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
Senior Executive Officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive Officer
Executive Officer
Executive Officer

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Masashi Yasuda
Hirofumi Yamashita
Yuki Kawasaki
Teruhiro Arai
Noriko Inagaki
Takashi Shimabara
Akio Sato
Kazutaka Yoshida
Kazuhiko Okamoto
Yumi Hokazono
Fumio Kai
Shinichi Sugiyama
Tatsuya Koide
Yuichi Hisada
Takashi Mitani
Tomoyuki Murakami
Takeshi Yoshii
Katsunari Mukai
Masaru Yoshioka
Kazunari Taguchi
Kiyonobu Inayama
Shingo Ito
Yoshinori Inokuchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Junpei Kendo
Katsuyoshi Sota
Takeshi Yoshida
Yusuke Nakayama
Osamu Nishioka

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

36

3.2 Organizational Chart
GMO Payment Gateway, Inc.
GMO-PG internalorganizations
Annual General
Shareholder’sMeeting (AGM)

Representative
Director

Management
Committee

Board of Directors

Audit &
Supervisory
Committee

Internal Audit
OfficeDirector

Corporate Value Creation Strategy
Division
Risk Management
Committee

Nomination andRemuneration
Committee

Special Committee
Innovation Partners DivisionCorporate Support Division

Systems Division

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

37

3.3 Major Subsidiaries and Equity-method Affiliates（IFRS Standards）
Consolidated subsidiary

GMO Payment Gateway, Inc.

Equity method affiliate

Multi payment service（targets small-sized merchants）

GMO Epsilon, Inc.

FY2022 Revenue ¥4,933 mil, Ordinary income ¥3,058 mil. (J-GAAP)

GMO Medical Reservations Technology Co., Ltd.
Buy Now Pay Later

GMO Payment Service, Inc.

FY2022 Revenue ¥7,218 mil, Ordinary income ¥461 mil. (J-GAAP)

Offline payment (TSE Growth: Security code 4051)

GMO Financial Gate, Inc.

（As of end September 2022）equity stake: 57.1%

GMO Card System, Inc.

GMO Data, Inc.

(As of end September 2022) GMO Financial Gate, Inc.

equity stake: 51.0％

Sumitomo Mitsui Card Company, Limited equity stake: 49.0%
Overseas（Singapore）

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.

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）

GMO-Z.com PAYMENT GATEWAY INDIA PRIVATE LIMITED（India）

Overseas

GMO-Z.com PAYMENT GATEWAY USA, Inc
Multiple payment service

SMBC GMO PAYMENT, Inc.

（USA）
（As of end Sep 2022) Sumitomo Mitsui Card Company
equity stake: 50.0%
Sumitomo Mitsui Banking Corporation equity stake: 10.0%
GMO Payment Gateway Inc.
equity stake: 40.0%

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

38

3.4 GMO Medical Reservations Technology
Provides reservation management system to improve operations at hospitals and clinics
Medical Kakumei byGMO

Corporate Overview

Seamless services that not only includes online
reservation function, but also reception, e-medical
records links and cashless payment function.*1

Corporate
GMO Medical Reservations Technology CO., Ltd.
name
Establishment① Reservation② Reception③ Consultation④ Bill Payment

Omatome Shinsatsuken byGMO
Bundle multiple medical cards of several
hospitals and clinics onto a single app
Contributes to improving reception work efficiency
and cancellation rates

April 11, 2016

Parent GMO Epsilon, Inc. （Equity stake: 100.0%
company（Joined the Group in August 2018)
Address Tokyo HQ: Humax Shibuya Building 7F, 1-14-6
Dogenzaka, Shibuya-ku, Tokyo
Hamamatsu Branch: Chanson Building 6F, 125
Daikumachi, Naka-ku, Hamamatsu-shi, Shizuoka
Revenue*2

CAGR＋100.5％

Other services also available
・Medical Kakumei byGMO for veterinary hospitals
・Dentry byGMO

19/9

20/9

21/9

22/9

*1 The following services of reception machines for repeat visits, e-medical record links and payment functions are available as option services. *2 The revenue figure is based on J-GAAP
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

39

3.5 Key Characteristics of Payment BusinessStable industry with high entry barriers and low churn rates
High entry barriers
Regulation(Amended ISA* etc.）

・Responding to tightening regulation through repeated amendments
・Merchant management, security enforcement

Payment company
Network・Unique payment practices (huge range of payment methods)
requires transactions with multiple payment companies (page 10)

Business scale

Payment system

・Scale is key given low ASP
・Merchant acquisition requires development capability,
sales capability and track record
・System investment of several billions of yen to maintainstable processing of vast amounts of payment data

Low churn rate
Business
Characteristics
Initiatives

・Payment is a critical operation that cannot be halted
・Sharing of personal information such as credit card information

・Involved in development from upstream level given uniqueoperations/work-flow and needs
・Concurrently provide high-demand financial services* ISA is the abbreviation for Installment Sales Act.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

40

3.6 Product map
GMO-PG’s definition of payment: that which enables the digitalization of money flow

No Credit Risk

Cashless
DX support
platform

Ginko Pay
Processing platform
GMO Dokodemo
Cashpoint

Payment Service
PG Multi-Payment Service

SMS Choiceof Payment

GMO-PG 送金サービス

EP payment service

GMO Cashless Platform

Services thatcomplements
payment

早期入金サービス
Medical Kakumei byGMO

Payment terminals
Embedded payment solution
Not included
in transaction
value

Financial
Service

Online advertising
service

Included intransaction
value

GMO B2B Early Payment
GMO B2B AR Guarantee

GMO Payment After Delivery

FinTech loans

GMO B2B Pay on Credit

TL（GMO-PG、GMO-EP）
Credit Risk

* TL stands for Transaction Lending
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

41

3.7 DX Support Services to Improve Clients PL/BS

Service line-up that can respond to the diverse clients’ needs
Customer needs & PL/BS changes
PL

Use cases

EC shop, Utility bills

Revenue

Multiple payment methods
Paperless (lower postal cost)

Cost of Sales
SG&A

CF improvement service

Personnel
Rent
Communication
BS

OP
Asset
Cash
Receivables
Provisions for
doubtful accounts
Fixed assets
Liabilities
PayablesNet Assets

Our DX support services

Payment arrears

Improve collection rate
Prevent suspicioustransactions
Restaurants
Delivery sales
Cashless implementation
Increase recruits(lower personnel cost)
Store closures(lower rent expense)
CF improvement service
Event, Ticket Sales
Merchandise sale
Refund demand(lower postage cost)

PG Multi-Payment service
TEPCO EP’s SMS
Payment Choice
Cycle byGMO
GMO B2B Early Payment
Invoice Smartphone Payment
Fraud prevention service (Sift)

Online sales support
GMO Cashless Platform
Instant Salary byGMO

Electronic Invoice Early Payment
GMO B2B AR Guarantee
Online sales support
Remittance service(for refunds)

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

42

3.8 Revenue structure in the credit card foodchain by player■ Image of revenue structure by player

Merchant

Sale
proceeds

100%

Payment
processing
company

Acquirer

IssuerInternational
brand

Merchant
discount rate Spread revenue
Around

3.0% 0.3~0.5% 0.5
~0.7%

1.5
~1.8%

0.1%
*Compiled by GMO-PG by referring Ministry of Economy, Trade and Industry’s “Review of 4th Discussions, Analysis on Interchange Fee and Initiatives towards achieving paperless operations” (Note: this is an English
translation of Japanese title and not the formal title of the original)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

43

3.9.1 Business outline of payment processing company (1)Problems with online credit card payment in the early days of E-Commerce

Consumer

Merchant①Order taking③Make sales report to eachcredit card company（sales processing）

Network④Post mail sales
report to eachcreditcard company

ク
レ
ジ
ッ
ト
カ
ー
ド
会
社

Credit Card Company

Large volume of sales slips②Enter each
into theCAT terminal

Payment
Company

Authorization（approval number
assigned）

Problems for merchants・Duplicate order entry into CAT terminal andmerchant’s system
・Sorting documents/transaction for each credit
card company⑤Check whether payment
has been received
Payment

・Insufficient check on incoming payment
・Human error due to manual input

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

44

3.9.2 Business outline of payment processing company (2)Payment processing service realizes operational efficiency in credit card payment operations

Consumer

Merchants

Payment
Processing
Company①Order taking

Payment
company

Credit・sales
Network

Real-time credit decision
Transmit
sales data
②Check whether
payment has been
received(data collation)

Sales processing

Payment

Credit Card Company

Updatecard data

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

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

45