IR Introduction- Business Overview & Business Model Fiscal year ending September 2022

November 15, 2022

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

1

Business
Overview

p.3

2

Focus Areas

p.17

3

Reference
Materials

p.37

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.

2

1.1

Our Track Record of Growth

The results of management policy focused on sustainable growth※1（Mil Yen）

Revenue

60,00059,100（Mil Yen）+17.5％
50,000Operating Profit

20,000※1,2

22,901+24.4%

20,00018,403

16,24915,00030,000EBITDA

20,311+25.0%

50,29840,000（Mil Yen）
25,000※1

15,00010,00010,000142,396

※3,4

23/9E

22/9E

21/9

20/9

19/9

18/9

17/9

16/9

15/9

14/9

13/9

12/9

10/9

22/9

23/9E

21/9

20/9

19/9

18/9

17/9

J-GAAP

IFRS

Operating Stores

16/9

10/9

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

10/9

J-GAAP

15/9

0

14/9

0

0

13/9

5,000

12/9

5,000

11/9

10,000

11/9

20,000IFRS※3Annual TRX volume ※3

Annual TRX value

4.86 billion¥11.3 trillion（※1） Macro Kiosk has been deconsolidated in FY ending September 2020, the revenue figures above present the continuing operations only and exclude the discontinued operations.
（※2） EBITDA under J-GAAP is calculated as the sum-total of operating profit, depreciation and amortization; and 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 September 2022. Annual transaction volume and transaction value are the figures from October 2021 to September 2022.
Annual transaction volume and transaction value include the figures of GMO Financial Gate Inc.
（※4） The standards for calculation the number of operating stores has been revised from Q2 FY2022. Figures exclude a specific case and an operating store related to a majordelivery service operator. If included, the number of operating stores is 455,958 stores as of end of September 2022 (up 44.7% YoY).

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

3

1.2

Consolidated management

Realize Group-wide stable growth through sound business
operation that agilely responds to the businessenvironments at the major Group companies.
Omni-channel Strategy

Expand payment
method offerings
Share customer base

Diverse customer
coverage

Sharing of management principles, corporate culture andgroup-wide resource allocation
GMO-PG

GMO-EP

GMO-FG

GMO-PS

Major
business

Online payment
processing business

Online payment
processing business

Offline payment
processing business

BNPL business

Customer

Municipalities, large
to mid-sizedcorporates(non-merchandise,and merchandise)

Small operators(mainlymerchandise)

Offline stores,
Unattended
machines

Merchandise/Nonmerchandise
operators,
consumers

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

4

1.3

Three Business Segments

Sustain an over 25% OP growth from the expansion of mainstay
payment processing business and its peripheral businesses
Payment Enhancement
Business
Online Advertising Service
SSL Service
Delivery Service
Medical Kakumei byGMO

Revenue
Breakdown

Operating Profit
Breakdown

2%

1%

2％

etc.

（Actual data for FY2022)

12%

23％

75％

87%

Money Service Business(MSB)

Payment Processing
Business

GMO Payment After Delivery/
GMO B2B Pay On Credit
Remittance Service/
Instant Salary byGMO
Overseas Lending
Early Payment Service
B2B Factoring
Transaction Lending
etc.

※1
※
Online Payment
Offline Payment
Ginko Pay/Processing
System Development

etc.
etc.

※ 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.

5

1.4

Our Business Eco-system

An expanding eco-system of our value-added services
complementing our main business to achieve mutual growth
Increase inpayment processing

Payment processing(Gross margin 85％)

Payment
Processing
Business

Money Service
Business
Payment
Enhancement
Business

Customer growth
Main Business

Value-added business that contributeto growth of the main business

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

6

1.5

Revenue Trend by Segment

3 segments of Payment Processing Business, Money Service
Business and, Payment Enhancement Business（Mil Yen)J-GAAP

IFRS

60,00055,000

Payment
Enhancement
Business
Money Service
Business

50,00045,00040,00035,00030,000

Payment
Processing
Business

25,00020,00015,00010,000
5,000
0
04/9
05/9
TSE
Listing

06/9

07/9

08/9
09/9
2008
Launched
Early
Payment
Service

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
2016
2013
2011
2014
2015
2021
2010
2020
2018
BuffortLaunched Launched Launched Launched Revamped Launched
Deconsolid
Consolidation
services※
Payment TransactionEarly
OnlineOfflinetargeting banks of GMO MR ation of MK becomes a
Lending
Payment
subsidiary
Payment Advertising After
DeliveryService
Service※ 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.

7

1.6

Our value proposition

Businesses and services to comprehensively cater to customer’s needs
Issues & Needs

Value Proposition

Payment
Processing
Business

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

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

・Limited number of payment methods

・Broad range of payment methods offered・Concerns over payment security

・Safe and smooth payment experience

Consumer

Money Service
Business・Long lead time to deposit (longcash cycle)
Merchant
・Difficulty in recruiting personnel

・Salary prepayment service offered

Payment
Enhancement
Business・Cannot choose the timing of payment

・ Flexible payment timing with GMO
Payment After Delivery

・Need to grow revenue

・Support revenue growth throughonline ad placements

・Long waits at medical institutions

・Reservation system for medical
institution that enables seamlessservice from reservation to payment

Consumer

Merchant

Consumer・Improve cash flow cycle with early
payment of sales proceeds

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

8

1.7

Positioning of GMO-PG group

Connecting merchants and payment companies through ‘contracts,’‘payment information,’ and ‘money flow’.
Consumer

Merchant
142,396 stores ※１(As of end-Sep 2022)

PC

OnlinePayment

Smartphone/Tablet

OfflinePayment

EC
B2B・B2C・C2C
Taxes, Dues, Utility
NHK, Electricity bill,
Municipalities (e.g. Tokyo)
National Tax Agency,
Automobile Tax
Subscription
Video streaming
Software, ApparelService/Commerce
Digital content
Donation, Insurance,
Travel※2

196,608 terminals(As of end-Sep 2022)
Payment Terminal

GMO-PG consolidated
subsidiaries

Payment
Companies
40+ Credit cardcompanies
Convenience store
Account Transfer
Carrier billing
Bank transfer

E-money
Cash on Delivery
GMO Payment
After Delivery
QR codeID-based payment
Multi-currency
Pre-paid※1 The standards for calculation the number of operating stores has been revised from Q2 FY2022. Figures exclude a specific case and an operating store related to a major delivery
service operator. If included, the number of operating stores is 455,958 stores as of end of September 2022 (up 44.7% 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 51.0% YoY)

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

9

etc.

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)Initial (Initial revenue)①②

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
Sales of
Payment
Municipalities
Terminals
Some Large Enterprise② ③①

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

Large and middle-sized
merchants② ③ ④③

Fee (Transaction processing revenue)
Fee based on transaction volume
Coefficient: Number of payments processed
Revenue： Number of payments processed× _YenStart-ups
Small businesses

Spread (Merchant’s revenue)④

Spread on the transaction value
Coefficient: Value of transaction
Revenue： Value of transaction ×_%④

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

10

1.9 Payment Processing: Two types of merchantcontracts
Direct contract

Payment
Processing

Payment
Processing

Several contracts withmultiple payment
companiesA

GMO-PG’s role

Data processing only

CreditCard
Company

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

MDR

Direct negotiations withpayment companies

Revenue type

GMO-PG consolidated
subsidiaries

No. of contracts

Flow of Revenue and charges

②

Stock

③

Fee

②

Stock

③

Fee

④

SpreadRevenue proceeds
Payment
Company

Merchant

Mainly large companies
and municipalities

Representative
contract

3.0％ charge

No. of contract

B

Reduceable via GMO-PG

GMO-PG’s role
Data processing/Deposit ofsales proceeds

2.5％ charge
GMO-PG consolidated
subsidiaries

Single contract with GMO-PG

MDR

0.5% Spread(Merchant acquiring revenue)

3.2% MDR （Smaller GMV = Higher）

CreditCard
Company(If merchant has direct contract with payment company)

Merchant

Mainly SMEs, but may
include large companies

Payment
Company（In consideration of acquiring
the merchant）※ Figures included are for illustration and reference purposes only.
※ This illustration represents the contracts for credit card. GMO Epsilon revenues are only derived from spreads (See page 10).

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

11

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
09/9
2008
Launched
Early
Payment
Service

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
2016
2013
2011
2014
2015
2021
2010
2020
2018
BuffortLaunched Launched Launched Launched Revamped Launched
Deconsolid
Consolidation
services※
Payment TransactionEarly
OnlineOfflinetargeting banks of GMO MR ation of MK becomes a
Lending
Payment
subsidiary
Payment Advertising After
DeliveryService
Service※ 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.

12

1.11 Summary Table of Segments, Business Model andServices
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 ※GMO Payment After Delivery
GMO B2B Pay On Credit

Online advertising service
Medical Kakumei byGMO

Remittance Service
Instant Salary byGMO

Online Payment

Fee(Transaction
processing revenue)

Money Service
Business (MSB)

Early Payment Service
B2B Factoring

Transaction Lending

Early Payment Service

Transaction Lending

Online Payment/fincode byGMO

Spread(Merchant acquiring
service revenue )Overseas Lending

B2B Factoring

Medical Kakumei byGMO
Offline Payment
GMO Payment After Delivery
GMO B2B Pay On Credit
Overseas Lending

Ginko Pay/Processing/GCP ※System Development

System Development

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

Offline Payment

Online advertising service

Payment
Enhancement
Business

SSL service
Delivery service
Medical Kakumei byGMO※ Online Payment includes pay-as-you-go payment, recurring payment, Z.com Payment (overseas payment service), GCP stands for GMO Cashless Platform.

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

13

1.12

Product map

GMO-PG’s definition of payment:
what enables the digitalization of money flow
No Credit Risk

Cashless
DX support
platform

Ginko PayPG Multi-Payment Service
EP payment service

Processing platform

Payment
Service

GMO Dokodemo Cashpoint SMS Choiceof Payment
GMO Cashless Platform

GMO-PG Remittance service
Early Payment service

Medical Kakumei byGMO

Payment terminals
Not included intransaction
value

Included intransaction
value

■

GMO B2B Early Payment
GMO B2B AR Guarantee
FinTech loans

Financial
Service※ TL stands for Transaction Lending

TL（GMO-PG、GMO-EP）

Online advertising service

Embedded payment solution

Instant Salary byGMO
■

■
■
■
■
■
■
■

Services thatcomplements payment

GMO Payment After Delivery

GMO B2B Pay on Credit

Condo Pay

Credit Risk※ TL：トランザクションレンディング PF：プラットフォーム
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

14

1.13

Competitive Advantage and Achievement

Expand the value provided to clients, contribute to client’s
Past
Present
growth（As of end-Sep 2011）

Product

Competitive Advantage

Sales
Capability
Development
Capability

Nos. of payment
methods

Sales Personnel

Approx. 40

Engineer
Personnel

Approx. 30

Large-scale
Development
Projects

Reliability

１Credit card only（※Before 2005）

Annual TRX
Value（As pf end-Sep 2022）

Over 30
Multi-payment

Approx. 350※1

Approx. 450※1

Industry specific sales teams

Industry specific sales

2014 Visa Business Pay
2016 Bank of Yokohama “Ginko Pay”
Industry specific sales
2017 GMO-PG Processing Platform
2020 TEPCO Energy Partner “SMS Choice of Payment,” etc.

Approx. ¥0.9 tril.

Approx. ¥11.3 tril.

OperatingApprox. 26K
Approx. 142KStoresHDI-Japan awarded Three Star rating for 5 consecutive years forcustomer support. ※2

Achievement

Per Employee

Operating
Profit20

Approx. ¥9 mil

Approx. ¥20 mil

10
0

11/9
列1
※1 The number of sales and engineer personnel includes partners of GMO-PG group of consolidated subsidiaries and 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

Business
Overview

p.3

2 Focus Areas

p.17

3

p.37

1

Reference
Materials

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

16

2.1

Expansion of TAM and Profit Targets

Expand scope of business in the enormous market to achieve2025 OP target of ¥25 bn※1■ TAM by market segment, GMV, OP target and Priority Initiatives
P.27
Offline・Broader EC
BaaS ※2
P.23-26
P.30-31
FinTech-29MarketP.21-22
IoT
Segment 2020
2025
2020
2025
2020
2025
2020
2025

20
TAM
（¥ trn）

GMV（¥ trn）

OP（¥ bn）

Priority
Initiatives

45（BtoC EC）

352

1

3

Global

P.32-33

2020

2025

50

50～

（BNPL)

2.5
8（Early Payment,

408～ Transaction Lending）（BtoB EC）
200 220～(Salary bank transfer）

5

13

－

75

180
～220 18

－

30～

2

2～

（IT investment by
Financial Institutions)

－
5

－
10～

87

118

（Offline cashless market）

1
5(Overseas lending）

5

－

－

20～

－

30～

※3

Buy Now Pay LaterDX Platform
GMP ※4
fincode byGMO

GMO Payment
After Delivery
GMO B2B Pay On Credit
Instant Salary byGMODX Platform

Offline Payment (IoT)

GlobalFinTechFinTech※1 Figures for TAM, GMV, OP (operating profit) are GMO-PG’s estimates and targets. Figures are estimates and are rounded up to the nearest whole number.
There is some overlap in the OP figures for FinTech and Global. Offline OP includes companies other than GMO Financial Gate consolidated subsidiaries.
TAM: Total Addressable Market, BaaS: Bank as a Service, GMV: transaction value.
※2 BaaS/Cashless includes embedded finance.
※3 The OP figure for Global is included in FinTech for FY2020. ※4 Global Major Players (GMP): large corporates that provide IT-utilizing services globally.

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

17

2.2.1

Narrowly-defined EC: B2C EC Market

Low cashless and EC penetration compared to
US/European countries■ Cashless penetration in Japan■ EC Penetration Rates in Developed Markets(ratio to private final consumption)（％）（¥ trillion）

31.0

UK
30.0

27.9

USA

（％）

100

Debit card

21.3

60

17.9

14.6

14.6
14.6

14.5
15.0

6.0
5.0

7.0

8.2

9.2
5.4

10.4

5.8

4.1

4.6

5.0

3.6

2.1

2.5

2.8

3.1

3.7

1.8

08

09

10

11

12

13

11.3

6.4
4.4

12.5
10.5
7.3
4.8

8.2
5.4

8.8

5.8

9.6
8.1
6.2

8.8

25%

20.0

19.1
16.2

30%

24.1

QR code

70
20.0

35%

26.8

E-money
80

25.0

7.6

29.7

Credit card

90

Japan

10.0

32.5

Cashless penetration

16.9

18.2
20%

50
40

15%

30

10%

6.8

20
5%

10
0

0.0
14

15

16

17

18

19

20

21

※ 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 2ndt Quarter 2022 Retail E-Commerce Sales Report”;
Office for National Statistics ”Retail Sales Index internet sales, October 2022”

0%
14

15

16

17

18

19

20

21

※ 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

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

18

2.2.2

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

Responding to tightening regulations throughrepeated amendments
Merchant management, security enforcement•

Unique payment practices (huge range of payment
methods) requires transactions with multiple
payment companies (page 9)••

Scale is key given low ASP
Merchant acquisition requires development
capability, sales capability and track record

Business
Characteristics••

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

Initiatives•

Involved in development from upstream level given
unique operations/work-flow and needs
Concurrently provide high-demand financial services

Payment company
NetworkBusiness scale

Low churn rate•

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

19

2.2.3 Characteristic of Payment Business: CrossIndustry
Payment is a required action for any purchase and is a highly
sticky application

Finance

Taxes

Water Supply

MedicalApparelPublishing

Manufacturing

EnergyLogistics

Education

Utility Bill

DigitalContent

Payment is a requisite action
Effective for customer consolidation

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

20

2.3 Broader EC: Expanding Scope of Cashless BusinessJapan’s migration towards cashless payment is contributing to
GMO-PG group’s growth acceleration
B2B
B2C
C2C
Narrowly-defined ※1
B2C EC market¥20.7 trillion

Online ※1※5
Payment
CAGR: 6.4%

EC ratio: 8.8%

Enormous market¥1,000tr

2020
8.8¥20.7tr

EC ratio (%)
Mrkt Size※2

Offline ※4※5
Payment
CAGR: 9.8%

B2B
Credit card
payment

Public dues/Utility
・Local tax¥41 tr・National tax ¥70 tr

2025
14
¥40tr

Service, Commerce
Subscription
Omni-channel

Broader EC
Consumer spending※3¥300trFlea Market
App
Expansion phase¥1.95 trillion
Sharing
EconomyFlea Market※1 References：METI’s “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”. Figures for 2025 are our estimates.
※2 MIAC “Breakdown of national tax and local tax revenue (FY2022 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.”※5 Online payment CAGR refers to the 5-year CAGR from 2016 to 2021 for online payment market size. Offline CAGR: refers to the 5-year CAGR from 2016 to 2021 for the offline cashless market.

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

21

2.3.2

Broader EC: Public Dues and Utility Bills

Introducing card payments for public dues and taxes since
the amendment of the Local Autonomy Law in 2006
Local
Local Taxes (automobile tax, light vehicle tax,
governments fixed assets tax, etc.)
Water bill, gas bill, hometown tax
National tax credit card payment website
National tax smartphone app payment service, etc.
NHK

Broadcasting subscription fee
Credit card usage rate at the end of FY2021:
18.1% (Up ＋0.6％ YoY) ※TEPCO
EnergyPartner

Supporting digitalization of electric bill
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 FY2021”

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

22

2.4.1

FinTech: Money Service Business (MSB)

Financial services that only a payment processing company can offer
Services

Related assets

GMO Payment After
Delivery
GMO B2B Pay On Credit

Pay the sales proceed ahead ofthe deposit from the consumer

Accrued revenues

Remittance service
Instant Salary byGMO※

Efficient and secure refund andremittance processing

Advances paid

Overseas Lending/Transaction Lending

Lending of growth funds

Accounts receivable-trade(short term loans)

Early Payment
service

Improves cash flows by bringing
forward the payment date

Advances paid

B2B Factoring

Early cash conversion of accounts
receivable

Accrued revenues

Business Model
③

Fee

④

Spread③

Fee④

Spread④

Spread④

Spread※ Instant Salary byGMO in 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.

23

2.4.2

FinTech: Japan’s BNPL market

Expand business by capturing the Japan’s unique BNPL needs
Outlook of Japan’s BNPL market ※3

BNPL needs in Japan・Receiving goods before payment
・Cash payment
Consumer ・Manage and control spending
・Limit face time with delivery person
・Widen customer reach
Merchant ・Means of sales promotion
・Reduce & manage return risk

A growing payment method driven by the
expansion of EC, use in conjunction with
(Unit: ¥ billion)
credit card and as an alternative to cash1,909
on-delivery and CVS payment(prepayment).
1,726
1,534
1,329

EC market breakdown by payment method(by value)
Other 8.3％

Pre-paid
7.0％
Carrier billing
8.5％
Cash On
Delivery
Migrate to BNPL
5.8％

1,089
(estimate）＋23.9％

Credit card
60.5％
Forecast to expand further

EC Market Size
※1・2
¥20.7 tril.
EC penetration 8.8%
CAGR 10％

CVS store
9.9％※1 METI “FY2021 Global Survey Project Concerning Integrated Domestic and External Economic Growth Strategy Building (E-Commerce market survey)”
NEW※2 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2022”※3 Yano Research Institute Ltd. ”Online Payment/Settlement Service Providers 2022” and “Domestic Cashless Settlement Market 2019.”
The figure for FY2021 is an estimate, the figures for FY2022～FY2025 are forecasts.

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

24

2.4.3

FinTech: BNPL business of GMO-PS

Established top-tier market share and earnings base as acomprehensive payment provider
J-GAAP
Key features of our BNPL business• Apply machine learning that utilizes the large
amount of credit data

（Mil Yen）
8,000

7,000

• Lower default rate by accumulating credit
data and collection know-how

6,000• Provide all payment methods needed in the EC
market as a comprehensive payment provider

5,000• Rollout business-use BNPL by collaboratingwith B2B operators• Planning to provide offline transactions using
stera platform and long-term installment
payment with the business alliance with SMCC

• Stable profit generation andexpansion of transaction value• Leverage group synergy and build
top tier business foundation

Revenue
Net Profit

4,000

3,000

2,000

1,000

0
17/9

18/9

19/9

20/9

21/9

-1,000

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

25

2.4.4

FinTech: Instant Salary byGMO

To be the de facto digital and seamless service provider in the¥220 trillion salary market
Collaboration with SMFG
2015

2016

2017

2018

2019

Growth Trend (image)
2020

2021

Positive BusinessprofitReorganization
Capital & Business alliance andThird-party allotment

Target Market

Service expansion

Approx. 2 mil users

Salary banktransfer market
Approx.
¥220 tr.

An establishedsalaryprepayment(“sokkyu”)
service

Expertise inpayment andremittanceEntered the enormous salary market
that still depends on old-fashioned
cash handouts and analog processes

Jul. 2021
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

Dec-2021
Strengthen collaboration
with SMBC
Added real time bankdeposit 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.

26

2.5.1BaaS（Embedded Finance）

One-stop payment solution by leveraging payment know-how
and our track record【Background】••【End-user】

Expansion of cashless/DX needs
Financial services provided bybusiness operators【GMO-PG Processing Platform】

クレジット
Issuing
カード
Gateway
イシュイング
サービス

House
デビット
Solution
カード Debit Card
イシュイングサービス Issuing

FEP

ハウス
Network
ソリューション
サポート

Payment & Cashlessbusiness【Alliance partner】Financial Institution, Card
company, Business operators
Acquiring

Prepaid Card
Issuing

カード会員利便性向上
Management dashboard
対外接続
マーケティング・販売促進 等
External connectivity

CommonPlatform

プリペイド
Credit
カードCard
Issuing
イシュイングサービス

Enterprise・Individual

Freely choose from payment solutions andcommon platform according to business needs
GMO-PG Processing
Platform

業務管理

Payment know-how,development capability, etc.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

27

2.5.2BaaS（Embedded Finance）

Enable low-cost and swift credit card issuingCommence credit card issuing system“H-ALIS” through the collaboration of※four companies, from October 2023

【H-ALIS】
The credit card core platform provided by
HCC, the No. 1 company in issuing affiliatedcards in South Korea ※【Role of GMO-PG】
GMO-PG will offer the Japan-localized H-ALIS
as an ASP service by carrying out the sales
activities, development and FEP in theJapanese market ※【Background】
Increasing needs of operators for speedy issuingof various types of credit cards as these operators
pursue cashless initiative

Offer H-ALIS as the “Credit Card Issuing
Support” of the “GMO-PG Processing
Platform” service【Value Proposition】•••

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

2.5.3BaaS & Cashless

Increase Ginko Pay adopters, interlink each service to create an
infrastructure-like service■Ginko Pay■ GMO Cashless Platform

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

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

The Hokkaido Bank

Offlinestore

Sumitomo Mitsui
Banking Corporation

The Hiroshima Bank

The Bank of Fukuoka

QR/Bar code Payment
services

Japan Post Bank

Ginko Pay
The Kumamoto BankThe Juhachi-Shinwa Bank

GMO
Cashless
Platform

Bank of Yokohama

Bank of Okinawa（As of September 30, 2022）

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

29

2.6.1

IoT: Offline Payment Market

Expand business scale through cashless migration and alliance strategy■Offline payment
GMO Financial Gate offers payment terminals for payments made at 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 Stn.
Parking Fee

Self Check-out

Coin Laundry

Capsule toy
machine■steraRollout of a new payment platform to provide a onestop service that handles variety of payment methods.

CustomerfacingMerchant
facingstera mobile※ 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

2.6.2

GMO Financial Gate, Inc.: Overview■Name

GMO Financial Gate, Inc. (TSE Growth, security code 4051)■Date of Establishment

September 1999

■Location

Humax Shibuya Building 7F, 1-14-6 Dogenzaka, Shibuya-ku, Tokyo■Capital Stock¥1,618 million yen (As of September 30, 2022)■Major Shareholders

GMO Payment Gateway, Inc. and others■Management

President and CEO
ChairmanManaging Director
Director
Director
External Director
External Director
External Auditor
External Auditor
Auditor■Auditor

Ernst & Young ShinNihon LLC■Consolidated Subsidiaries

GMO Card System, Inc. (Equity stake: 100%)
GMO Data, Inc. (51.0% stake; Sumitomo Mitsui Card Company, Ltd. 49.0%)■Business Description

Provides cashless payment infrastructure for credit card, debit card, e-money, etc.

Kentaro Sugiyama
Akira Takano
Akio Aoyama(GM of Sales Department)
Tomonaga Fukuda (GM of System Department）
Tatsuya Koide(Managing Executive Officer of GMO Payment Gateway Inc.)
Nao Shimamura
Rie Asayama
Takayoshi Nagasawa
Satoru Ozawa
Takashi Iinuma(CPA; Representative of Iinuma General Accounting Firm)（As of November 14, 2022)

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

31

2.7.1

Global: Overseas Strategy

Leverage synergy of N. American investments and focus on
the growing SE Asian and Indian Markets

Payment Processing
Business■Business Area
North America

Japan

Innovation
CenterProfitCenterMoney Service
Business

SE Asian & India

Growth Center■Strategy
Payment Processing Business
Collaborate with investee to provide local payment
services
Money Service Business
Invest/Lend to key FinTech companies
Payment
in NAm and Asia
Processing
・Acquire, introduce and transfer theBusinesslatest expertise and know-how
・Strengthen relations withborrowers and investees
Money Service
Business※1 Investment and borrowers of GMO Payment Gateway and GMO Global Payment Fund
※2 Already divested and/or investment recovered.

■Investments※1
Country

Major investees

Major borrowers
※2

※2

※2

※2

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

※232

2.7.2 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
Penetration

B2C EC

TAM※2¥40 tril.

※1

GMO-PG Asia locations

6%

TaiwanHong Kong

India

GDP
Approx. ¥400 tril.
7-8% growth8%

B2B EC

ThailandPhilippines

2010

2022

Payment Service
ProviderMalaysia

Over ¥350 tril.

2030

Credit Provider

Singapore

SE Asia

Indonesia

GDP
Approx. ¥400 tril.
5-6% growth

Emergence of high-growth FinTech
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 B2C/B2B EC market penetration rates for US/Japan

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

33

2.8.1

Sustainability

Integrated Report outlines the various initiatives to realize
sustainability
28 th Integrated Report
URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/211220_gmo_pg_ir_integrated_report_en.pdf

Specific initiatives (excerpt)
Realize convenient and comfortablesociety by promoting EC and cashless
adoption
Promote impact finance to financial
inclusion FinTech companies(microfinance)

Support merchant’s decarbonization
through DX support and paperless
operations
Start payment processing using de facto
renewable energy
Selected as Best Place to work for 8
consecutive times by the Best Place toWork survey
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

34

2.8.2

Strengthening Governance Structure

Realize medium- to long-term improvement in enterprise value
through strengthening of supervisory function of the Board
Corporate Governance Organizational Structure① Transition to company with Audit and Supervisory
Committee② Proportion of External Director rises to a third①②③ Established a Special Committee
・ Comprised of five External Directors③

・Strengthen protection of interests of non-controllingshareholders

・ Transactions and actions that entail a conflict of interest
between the 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.

35

1

Business
Overview

p.3

2

Focus Areas

p.17

3

Reference
Materials

p.37

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

36

3.1

Company Outline (as of October 1, 2022)■ Name■ Management team
Chairman & Director
GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange Prime)
President & Chief Executive Officer■ Date of establishment March 1995
Director, Executive Vice President
Director, Executive Vice President■ Location
Director
FUKURAS office (Head office)Director
Director
SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku,
Director
Tokyo, 150-0043 Japan
Director
Humax OfficeDirector
External Director
Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku,
External Director, Audit & Supervisory Committee
Tokyo Japan
External Director, Audit & Supervisory Committee
External Director, Audit & Supervisory Committee■ Capital stock 13,323 million yen
External Director, Audit & Supervisory Committee■ Major shareholders
Senior Managing Executive Officer
Senior Managing Executive Officer
GMO Internet, Inc., Sumitomo Mitsui Banking Corporation,
Senior Managing Director
Mr. Issei Ainoura ,etc
Senior Managing Director
Managing Executive Officer■ Auditor
Managing Executive Officer
Ernst & Young ShinNihon LLC
Managing Executive Officer
Managing Executive Officer■ Major consolidated subsidiaries
Managing Executive Officer※ Service, Inc.,
GMO Epsilon, Inc., GMO Payment
Executive officer
Executive officer
GMO Financial Gate, Inc.,
Executive officer
GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), etc.
Executive officer
Executive officer■Major Equity affiliates
Executive officer
SMBC GMO Payment, Inc., GMO Data, Inc., etc.
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
Masaru Yoshioka
Takeshi Yoshii
Katsunari Mukai
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.

37

3.2

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.

FY2021 Revenue ¥4,824 mil, Ordinary income ¥3,050 mil. (J-GAAP)
GMO Medical Reservations Technology Co., Ltd.

Buy Now Pay Later

GMO Payment Service, Inc.

FY2021 Revenue ¥6,680 mil, Ordinary income ¥990 mil. (J-GAAP)

Offline payment (TSE Growth: Security code 4051)

GMO Financial Gate, Inc.

（As of end September 2021）equity stake: 57.3%

GMO Card System, Inc.
GMO Data, Inc.

(As of end September 2021) 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 2021) Sumitomo Mitsui Card Company
Sumitomo Mitsui Banking Corporation
GMO Payment Gateway Inc.

equity stake: 50.0%
equity stake: 10.0%
equity stake: 40.0%

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

38

3.3 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.※

Corporate
name

GMO Medical Reservations Technology Co. Ltd.

Establishment April 11, 2016

① Reservation② Reception③ Consultation④ BillPayment■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

Parentcompany（Equity stake: 100.0%）
GMO Epsilon, Inc.
（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

CAGR＋100.5％※2

Revenue

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

3.4

Continuous achievement of OP target

Earnings targets achieved through the earnings structurewith high visibility and a disciplined business operation
Operation Profit（Mil Yen）
20,00018,000※Initial Forecast

Continuing stable growth and overcoming
external volatilities

Actual

16,0002020
COVID-19

14,0002019
Consumption tax
8→10％

12,00010,000

8,000

6,000

4,000

2,000

2008
Lehman Shock2014
Consumption tax
5%→8％

2011
Great East Japan
Earthquake

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.

40

3.5 Expand line-up and expand revenue per customer
Diverse value proposition to existing customers
Promote up-sell through resolving customers’ issues
Our Strengths/Value Proposition

Expand Product

Early Payment•

Highly scalable payment platform

GMO-PG Remittance•

Incorporates various payment methods•

Win-win model of providing value added
services that contribute to revenue/TRX•

Multiparty platform for consumer,
merchants, and payment companies

B2B Financial services
TL (GMO-PG, GMO-EP)

Instant Salary byGMO

Medical Innovation byGMO

Online advertising service

Revenue per merchantDiverse payment methods(Thousand Yen)

GMO Payment After Delivery

Payment Platform

GMO B2B Pay on Credit

279
230

333

353

296

249

Condo PayPG Multi-payment Service
EP payment
services
SMS Choice of Payment
stera

Online/Offline(omni-channel)

ExpandingPayment Methods

17/9

18/9

19/9

20/9

21/9

22/9

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

41

3.6 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

Revenue
Cost of Sales
SG&A

Rent
Communication

OP
Asset
Cash

Receivables
Provisions for
doubtful accounts
Fixed assets

Liabilities
PayablesNet Assets

EC shop, Utility bills
Multiple payment methods
Paperless (lower postal cost)
CF improvement service

PersonnelBS

Use cases

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)

Our DX support services
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

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

Payment
company

Merchant①order taking

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

network④Post mail sales
report to each credit
card company

Credit card 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.

43

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

Payment
company

Payment
Processing
Company

Merchants①Order taking

Updatecard data
Real-time credit decision

Network

Sales processing

Transmit
sales data
②Check whether
payment has been
received(data collation)

Payment

Credit card company

Credit・sales

In the early days of Ecommerce, credit card payment was processed offline between themerchant 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.

44