Supplementary Information
Financial results briefing for FY2019

November 14, 2019
GMO Payment Gateway, Inc.
(Code: 3769, TSE-1st Section)

https://corp.gmo-pg.com/

Track record of growth
FY2020 revenue guidance ¥36.6bn, OP ¥10.3bn（Mil. Yen）

Revenue ※1

35,00036,618（Mil. Yen）
10,000+14.0％

10,376（Mil. Yen）

※1

Operating Profit+25.0%+30.3%

32,121

30,00012,188

EBITDA ※1※2

12,00010,000

8,301

8,000

9,351

25,000

8,000
6,000

20,0006,000

15,000

4,000
4,000

10,000
2,000

2,000

0

0

J-GAAP

IFRS

Operating Stores※3,4

111,425J-GAAPIFRSJ-GAAP

TRX Volume (Annual)

TRX Value (Annual)

1.78 billion¥4.6 trillion

2020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/92020/9E

2019/92018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92019/92020/9E

2018/92017/92016/92015/92014/92013/92012/92011/92010/92009/92008/90

2008/9

5,000

IFRS

（*1）The group commenced voluntary adoption of IFRS in FY2018. The figures for the FY2017 have been re-calculated on the same basis. FY2020 figures show the earnings guidance.
（*2）EBITDA under J-GAAP is calculated as the sum total of operating profit, depreciation and amortization; and under IFRS is calculated as sum total of operating profit
and depreciation.
（*3）The number of operating stores is as of end-Sep 2019. Transaction Volume and transaction value are the figures of the period Oct. 2018 to Sep 2019.
Transaction volume and transaction value include the figures of GMO Financial Gate Group.
（*4 Operating stores excludes a significant increase from a specific merchant. If included, the total number of operating stores is 228,765 by end-Sep 2019.

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

2

Three business segments
Sustain an over-25% OP growth from the expansion of themainstay payment processing and its peripheral businesses
Payment enhancement
決済活性化事業
business
Online advertising service
Asia payment enhancementbusiness (MK)*Delivery service
SSL service
and others

Sales
Breakdown

Operating Profit
breakdown

18％

16%

23％

59％

（Actual data for FY2019）84%
Payment processing
business

Money金融関連事業
Service Business（マネーサービスビジネス）(MSB)

Online payment
Recurring payment
Offline payment(GMO-FG)*
System development
Ginko Pay/Processing

GMO Payment after delivery
Remittance service
Transaction lending
Early payment service
Finance Lease
Global Lending
and others

and others※MK: MACROKIOSK, GMO-FG：GMO Financial Gate GroupWe have renamed the “customer support service” to “online advertising services,” effective from October 1 st 2018.

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

3

Mutually Enhancing business model
A mutually enhancing ecosystem between the main businessand the value-added services that enables a symbiotic growthPayment processing
demand increase

Payment processing（GP margin 85％）

Payment
Processing
Business

Money Service
Business
Payment
Enhancement
Business

Merchant growth
Main Business

Value-added services that contribute toexpanding the main business

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

4

Payment Processing Business: Our Role
Connecting merchants and payment companies along thefunctions of “contract”, “payment data,” and “money flow”
Consumer

Merchant
111,425 stores※(end of Sep 2019)

EC
B2B・B2C・C2C
Public dues/Taxes
NHK, NTA, Automobile
tax, Municipalities

OnlinePC

Our Company & Service

Payment company

Merchants=Our Customers(e.g. Tokyo Met. Gov.)

Subscription
Video streaming
Software, Apparel

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

Service commerce
Smartphone

OfflineDigital goods, Donation,
Travel, Insurance

37,480 terminals(end of Sep 2019)

GMO Payment
After Delivery
G lo b a l p a ym en t
BitCoin payment

Apple Pay
Physical Store※ Excludes a significant one-off increase in operating stores from a specific merchant. If included, the total number of operating stores is 228,765 by end-Sep 2019.
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

etc.

5

Revenue structure of credit card payment
Business model is determined by merchant type/size■The four business models■Revenues by merchant type/size

Initial (Initial revenue)①

Initial introduction fees
Coefficient: Number of new merchants acquired

Revenue: Number of new merchants acquired
× _Yen (at the time of introduction)

Municipalities
Large Enterprise① ② ③

Stock (fixed monthly revenue)②③

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

Mid to Large
Enterprises

Fee (Transaction processing revenue)① ② ③ ④

Fee based on transaction volume
Coefficient: Number of payments processed
Revenue：Number of payments processed × _Yen

Startups/SMEs④

Spread (Merchant acquiring service revenue)

Fee based on transaction value
Coefficient: Amount of payments processed
Revenue：Amount of payments processed × _%④

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

6

Payment Processing Biz: Two types of contracts
We introduced a new contract system and changed the flowof sales proceeds
Direct contract

Payment
processing

Payment
processing

mainly for large companies
and municipalities

Our group
Credit cardcompany

2.8％ MDR
Sales proceed

Payment company

Merchant

Representative
contract

0.5% Spread(Merchant acquiring revenue)
2.5％ take rate

3.0％ take rate

mainly for SME’s but covers
some large companies

Sales proceed

Our group

Sales proceed
Credit cardcompany

3.2％ MDR
Merchant*Numbers are provided for illustration purposes only.

(Merchant Discount Rate is charged for directcontract between merchant and the payment
company)

Payment company
Flow of sales proceed/charge

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

7

Revenue trend by business model
Aim for an all-round balanced revenue growth（Mil. Yen）

38,000J-GAAP

IFRS

36,00034,00032,00030,000Spread28,00026,00024,00022,00020,00018,00016,00014,000Fee

12,00010,000
8,000
6,000
4,000
2,000
0

Stock
Initial

2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 2013/9 2014/9 2015/9 2016/9 2017/9 2018/9 2019/9 2020/9E
2008
2011
2013
2014
2015
2016
TSE
Launched
Launched
Launched
Launched
Expanded
Launched
Listing
Early Payment
OnlinePayment Transaction Early
services
Service
Advertising
After
Lending
Payment targeting banks
Service
DeliveryService
GMO-FG and MK※※ GMO-FG：GMO Financial Gate Group, MK：MACROKIOSK
Became subsidiaries
We have renamed the “customer support service” to “online advertising services,” effective from October 1st 2018.

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

8

Summary of Segments and Business models
We disclose in 3 reporting segments and disclose 4 business models■Segments■Business model
Payment processing

Payment processing
business

Services for banks/Processing

Payment processing（MK）
Initial（Initial revenue）

System development

System development
GMO-FG
GMO payment after delivery

Payment processing (MK)Stock(Monthly revenue)

Transaction lending
Early payment service

Payment processing (MK)Fee
(Transaction
processing revenue)

Shipping service
MACRO KIOSKRemittance service

Payment processing (MK)

Online advertising service
SSL

GMO payment after delivery（Fee）

Shipping service

Finance lease

Payment
enhancementbusiness

Services for banks/Processing
Online advertising service

Remittance service
Money service
business

SSL

Spread(Merchant acquiring
service revenue )GMO payment after delivery (Spread)Transaction lending
Early payment service
Finance lease※MK：MACROKIOSK GMO-FG：GMO Financial Gate Group

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

9

Growth potential of EC market in Japan
Japan: Low E-Commerce penetration and high cash-use
versus other developed countries■E-Commerce penetration rates

17.9

（％）
16.2

UK
US

15.0

■Card usage in private final consumption expenditure（2017)

Credit Card
penetration(A)

Debit card
penetration(B)

Usage rate*(A) + (B)South Korea

76 ％

19 ％

95 ％

UK

12 ％

55 ％

67 ％

Australia

30 ％

25 ％

55 ％

US

25 ％

19％

44 ％

Japan

18％

-

18 ％

14.5

Japan

12.5
11.3
10.4

7.0

7.6

8.2

3.6
1.8

4.1

2.1

4.6

2.5

8.2

8.8

7.3

6.0
5.0

9.9

9.2

10.0

5.0

2.8

5.4

5.8

6.4

4.4
3.1

4.8

5.4

5.8

6.2

3.7

0.0
2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Figures are GMO-PG estimates.
Sources：METI. “FY2018 Survey of Infrastructure Development Status for Datadriven Society in Japan (E-Commerce market survey)”
U.S. Bureau of the Census “The 2nd Quarter 2019 Retail E-Commerce Sales Report”;
Office for National Statistics ”Retail Sales Index internet sales, September 2019”* Usage Rate = (Total Transaction amount of CCs and DCs) / Private
Final Consumption Expenditure* Figures are GMO-PG Estimates.
Sources: CPSS Red Book “Statistics on payment, clearing and settlement systems in the
CPMI countries - Figures for 2017”
THE WORLD BANK ”Household final consumption expenditure (current USD)”

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

10

Expanding Scope of Cashless Payment
Group-wide growth driven by cashless penetration in Japan
B2C

C2C

Narrowly-defined
B2C EC market

Nascent market

B2B
Blue Ocean
market¥1,000 trillion¥1 trillion¥17.9 trillion
EC ratio: 6.2%
（10% CAGR）

OnlineFlea market
app

Merchandising

Payment via
internet, etc.

EC rateMrkt size

OfflinePayment via aterminal in aphysical store

B2B
Credit card
payment

2018
6.2%¥17.9T

Service, commerce,
Digital content

2020E
7%
¥22T

2025E
15%
¥45T

Public dues・utility fee
・Local tax¥40 trillion
・National tax ¥66 trillion

Final consumption expenditure¥300 trillion

Flea market* References：METI. “FY2018 Survey of Infrastructure Development Status for Data-driven Society in Japan (E-Commerce Market Survey)”. Figures for 2020 and after are our estimates.
* Ministry of Internal Affairs and Communication, “Breakdown of national tax and local tax revenue (FY2019 Budget and Local Government Finance Plan)”* THE WORLD BANK ”Household final consumption expenditure (current USD)”

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

11

Payment processing: Public dues & utility payments
Pioneering the use of card payments since the amendment of
the Local Autonomy Law in 2006
Sapporocity：Local Taxes (Automobile tax, light vehicle tax,
Local
governments fixed assets tax, etc.)
Water bill, gas bill, hometown tax
etc.
National tax credit card payment website

NHK：National broadcasting subscription fee
End-FY2018 credit card usage: 15.9%（up 1.0％ YoY）

Expansion to continue:
Building maintenance fee, cram school tuitionfee, parking fee, school meal charge, etc.

Fukuokacity

Tokyo
Aichi pref.
Osaka pref./city*Japan Broadcasting Corporation “Business Report for FY2018”

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

12

Payment processing business: Offline payment market
Rollout of IoT services by leveraging cashless & inbound demand■Offline payment
GMO Financial Gate delivers payment terminals for offline payments
Embedded EMV terminals *Installment Sales Act amendment:
Replacement demand from the conventional
magnetic strips to IC chip equipped terminals
Tokyo 2020 Olympics & Paralympics Games:
Cashless payment demand to surge from huge
influx of foreign visitors to Japan

with PIN

with PIN

with PIN

without PIN*EMV: Unified standard for IC-embedded credit cards determined by Visa andMasterCard

Future target
Vending machine(Drink/food)

Ticket vending
machine(Railway company)

Auto payment
machine(Parking, hotel, hospital)

Office coffee
machineSelf check out, EV
charger, goods sellingmachine, laundromat,
touch pad for orders*These illustrations do not necessarily imply plans for future implementations.

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

13

Payment processing business: Ginko Pay
Expand Ginko Pay adopters, inter-connect the respective
services to build-out a payment infrastructure■Ginko Pay
A service targeting financial institutions; Ginko Pay is a smartphone app systemthat allows for immediate & direct debit from the bank account.
The Hokkaido Bank
■Cash Out Service
The Hokuriku BankNEW

Sumitomo Mitsui
Banking CorporationNEW

A service to withdraw cash from the bank account but
using a ticket machine at a train station. Co-developedwith Tokyo Corporation, The Bank of Yokohama and Japan
Post Bank, utilizes Ginko Pay framework.
※Excl. some stations on Tokyu LineThe Hiroshima BankJapan Post BankNEW■GMO Cashless Platform

The Bank of Fukuoka

The Kumamoto BankThe Shinwa Bank

Ginko Pay

Cashless solution for physical stores. Package offering
The Bank of Yokohama of all QR/Bar code payments, can expand to othercashless payment methods

Resona Group

The Bank of Okinawa（As of Novembr 14, 2019)※ Service provided from November 11, 2019

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

14

Outline of Money Service Business (MSB)
Financial services that only payment service providers can deliver
Services

Revenue types

MSB-related assets（Breakdown of operating andother receivables are as follows）

Remittanceservice

Efficient and secure refund and remittanceprocessing for Ecommerce operator

FeeーTransaction
lending

Handles daily transaction

SpreadShort-term loans

Early payment
service

Improves cash flows by moving up
the date of payment to merchantSpreadAdvance payments-trade

Payment after
delivery

Pays sales proceed without waitingfor deposit from consumer

SpreadFee

Accounts receivable-other

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

15

MSB: GMO Payment After Delivery
Provided by subsidiary GMO Payment Service■Deferred Payment market size

■GMO Payment After Delivery
Buyer pays at a post office or CVS after receiving the goods.
Payment term is 2 weeks.

Strong Deferred Payment market momentum
FY2019 market size: ¥755 billion (projected)¥755 bn.
（projected）

EC site＋32.0％②Credit check③Goods delivery / receipt⑤Payment①Order④Mailing invoice/payment slip
Convenience store
Post office, bank

⑥Payment

Consumer

Payment services of over 2 week
payment terms also launched.

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019※ Source: “Current situation and future forecast of online payment
service providers 2018,” and, “Domestic Cashless Payment Market
2019” by Yano Research Institute Ltd.

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

16

Overseas Strategy
Expand customer base through support services to J-companies
entering Asia and investment strategy■ Investment strategy:
Asia: No.1 in Payment and Payment periphery,
US: Innovation
Stakes held by GMO Payment Gateway andInvestees of the Global Payment Fund
GMO Payment Gateway overseas locations

USA■Payment Processing Business
Provide payment services toJapanese companies entering Asianmarket (through Z.com Payment)

Fintech related, leadingedge payment service
companies

YoY

＋69％

TWN
HKG

INDIA
THAI

VIETNAM

GMO Global Payment Fund
PHILIPPINESMALAYSIASINGAPORE

First ever Japanese VC toinvest in Asian Payment(Fund size ¥2bn)

Up 3x

INDONESIA

GDP
Approx.＄4.5T
5-6% Growth

FY2015Initial Value

Current Mcap

FY2016FY2017FY2018FY2019Suring payment
processing in Asia

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

17

Payment Enhancement: Mobile payment andauthentication

Focus on Asian banks and large enterprises through the equity stake in
MACROKIOSKStrategy: Build Scale First, Then Profit

Company name Macro Kiosk Berhad
Location

Malaysia and 11 other countries in Asia

Headcount

258<Specific actions>①Payment-related businessSet up sales teams in India and Europe②Business expansion in new countries
Provide payment service, collaborate with 2C2P, anequity method affiliate③Development of new products

Financial results Revenue ¥5,199 million (FY2019 Actual)
GMO-PG’s stake 70％④Entry into new markets by M&A

Acquisition cost Approx. 1,121 million yen
Business
Overview

SMS mobile solution (composition≒90％)
delivered to 95％ of Malaysian banks

Carrier billing gateway (composition≒10％)
delivered to 50+ major carriers in 12 countries

Guangzhou

Taichung

Macau
Hong Kong
ManilaBangkok
Ho Chi Minh
Kuala Lumpur
Singapore
Jakarta(as of the end of September 2019)
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

18

GMO-PG Group
GMO Payment Gateway’s consolidated subsidiaries and affiliates
GMO Payment Gateway, Inc.
＜ Consolidated subsidiary＞
Multi payment（targets small-sized merchant）（Financial results of FY2018）
Revenue：3,142 million yen, Ordinary income：2,145 million yen (J-GAAP)GMO Epsilon, Inc.

GMO Medical Reservations Technology Co., Ltd.
Payment after delivery

GMO Payment Service, Inc.

（Financial results of FY2018）
Revenue：4,472 million yen, Ordinary income： 847 million yen (J-GAAP)

Offline payment

GMO Financial Gate, Inc.

（As of end of Sep. 2018）65.0％ stake

Global Card System
Overseas

GMO-Z.COM PAYMENT GATEWAY PTE. LTD.

（Singapore）

GMO-Z.com PAYMENT GATEWAY HONG KONG LIMITED（Hong Kong headquarters, Taiwan branch）

GMO Z COM PAYMENT GATEWAY MALAYSIA SDN. BHD.

（Malaysia）

GMO-Z.com PAYMENT GATEWAY (THAILAND) CO., LTD.

（Thailand）

Overseas

Macro Kiosk Berhad< Equity method affiliate >（As of end of Sep. 2018）70.0％ stake（Financial results of FY2018）
Revenue：4,563 million yen, Profit attributable to owners of parent：24 million yen (IFRS)Multiple payment service

SMBC GMO PAYMENT（As of end of Sep. 2018）49.0％ stake

Overseas

2C2P Pte. Ltd.

（As of end of Sep. 2018）33.0％ stake

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

19

Company outline■Name

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

March 1995

■Location

Humax Shibuya Building 7F, 1-14-6, Dogenzaka, Shibuya-ku, Tokyo Japan<Headoffice relocation from November 25, 2019> SHIBUYA FUKURAS 15F, 1-2-3 Dogenzaka, Shibuya-ku, Tokyo, 150-0043, Japan■Capital stock

4,712 million yen■Major shareholders

GMO Internet, Inc., Sumitomo Mitsui Banking Corporation, Issei Ainoura ,etc

■Management team

■Auditor

Chairman & Director
President & Chief Executive Officer
Director, Executive Vice President
Director, Executive Vice President
Senior Managing Director
Director
Director
Director
Director
External Director
External Director
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Executive officer
Auditor（full-time）
AuditorExternal Auditor
External Auditor
Deloitte Touche Tohmatsu LLC■Consolidated subsidiaries

GMO Epsilon, Inc., GMO Payment Service, Inc., GMO Financial Gate, Inc.,

Masatoshi Kumagai
Issei Ainoura
Ryu Muramatsu
Satoru Isozaki
Yuichi Hisada
Masashi Yasuda
Takehito Kaneko
Hiroyuki Nishiyama
Hirofumi Yamashita
Masaya Onagi
Akio Sato
Tomoyuki Murakami
Shinichi Sugiyama
Yusuke Arai
Masaru Yoshioka
Takeshi Yoshii
Takashi Mitani
Katsunari Mukai
Yoshikazu Yanagishima
Kazunari Taguchi
Tatsuhito Muramatsu
Kiyonobu Inayama
Shingo Ito
Yoshinori Inoguchi
Hirofumi Tozawa
Yasunori Hatada
Mariko Takeda
Kazutaka Yoshida
Takashi Iinuma
Kazuhiko Okamoto
Yumi Hokazono(In charge of Corporate Value Creation Strategy Division)(In charge of Corporate Support Division)(In charge of Innovation Partners Division)(former President of JSOL Corporation)(Sato Sogo Law Office, Attorney)(President and COO of SMBC GMO Payment Inc.)(In charge of Systems Division)(Director, GMO Epsilon Inc.)(In charge of Innovation Partners Division)(In charge of Innovation Partners Division)(In charge of Systems Division)(President, GMO Payment Service Inc.)(In charge of Innovation Partners Division)(President, GMO Epsilon Inc.)(In charge of Corporate Value Creation Strategy Division)(In charge of Systems Division)(In charge of Corporate Support Division)(In charge of Corporate Support Division)(In charge of Corporate Value Creation Strategy Division)(In charge of Innovation Partners Division)(In charge of Corporate Support Division)(Iinuma General Accounting Firm, CPA)

GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), Macro Kiosk Berhad, etc.
■Equity affiliates

SMBC GMO Payment, Inc., 2C2P Pte. Ltd., etc.

（As of October 1st, 2019）

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

20

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

Payment
company

Merchant

Consumer①order taking

Authorization（get approval number）②Enter data
into theCAT terminal③Make sales report to eachcredit card company（sales processing）

 Duplicate Order entry into CAT terminal and inhouse system⑤Check whether payment
has been received

network④Post Mail sales
report to eachcredit cardcompany

Credit card company

Huge amounts of sales slips

Issues for merchants

 Sorting documents for each credit card company

Payment

 Insufficient check on incoming payment
 Human error
Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

21

Business outline of payment processing company (2)Payment processing service adds operational efficiency to credit card
payment
Consumer

Payment
company

Payment
Processing
company

Merchants①Order taking

Updatecard data
Real-time credit decision

Network

Sendsales data

②Check whether
payment has been
received(data collation)

Sales processing

Payment

Credit card company

Credit・sales

In the early days of E-Commerce, credit card payment was processed offline between
merchant and credit card company, a burden for both sides.
Payment processing companies were established to eliminate the burden for both theparties.

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

22