Annual Report
27th Fiscal Year2019.10.1–2020.9.30

Supporting Social Innovations through Payment

Global Leadership
A company that presents new value
to the world and leads Japan with
its high aspirations

Message fromthe President

Issei Ainoura
President andChief Executive Officer

Business Model

Maximize corporate value and establish our position asa payment platformer by creating value for customers by

A company with outstanding potential
and a 30-year growth trajectory that is
highly acclaimed by global investors

supporting their digital transformation (DX)

Ownership Model
A company that achieves exceptional
growth through delegating andinstilling a sense of ownership in our
younger partners to seek new challenges

Fifteen Consecutive Terms of Revenue and Profit
Growth since Our IPO in 2005
First, we would like to wish for a speedy recovery
to those affected by COVID-19 and our deepest
condolences to those who have lost their loved
ones. Also, we would like to express our sincerest
gratitude to those who have worked tirelessly toprevent the spread of the pandemic and maintainthe social infrastructure through this crisis.
Looking back at the fiscal year ended September
30, 2020, online payment trended strongly, led
by the growth in e-commerce (EC) from nesting
demand despite some merchants whose grossmerchandise value (GMV) declined due to
COVID-19 and delays in projects under development. Offline payment also contributed to earnings through services such as GMO Payment After
Delivery and lending services to domestic andoverseas companies as well as by capturing theshift toward cashless payment, which resulted inrobust sales of payment terminals. As a result, werecorded 15 consecutive terms of r­ evenue andprofit growth since our IPO in 2005.
We express our deepest gratitude to all of ourshareholders and stakeholders for their support
that enabled us to achieve these results.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

01

Message from the President



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Continued Growth with a Target of ¥10.0 Bn in Ordinary Profit by FY2020

6LQFHSURILWVIURPQHZEXVLQHVVHVKDYHH[FHHGHGSODQV
Operating Profit
Portfolio (Breakdown)
as of FY2015
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SODQ (Plan)

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10.3 bn

Operating profit: ¥

営業利益
億円
2SHUDWLQJ3URILW¥EQ
Online payment
processing & peripheral services（([FHUSWIURP)<SUHVHQWDWLRQPDWHULDOV(Excerpt
from FY2015 presentation materials)※TL：7UDQVDFWLRQ/HQGLQJ MO Payment AfterG
Delivery (FinTech)Other services excluding
GMO Payment After
Delivery (FinTech)&RS\ULJKW & *023D\PHQW*DWHZD\,QF$OO5LJKWV5HVHUYHG

Achieved 2020 Target of ¥10.0 Bn in Operating
Profit, According to Plan
The long-term targets of achieving operating profitof ¥1.0 bn in 2010, ¥10.0 bn in 2020, and ¥100.0
bn in 2030 were first established when I became
the president of Card Commerce Service, Inc., thepredecessor of GMO-PG, in 2000. Since our IPO in
2005, we have communicated to the equity market
the strategies and initiatives required to achieve
the prerequisite growth rate of 25%.
Back in 2015, Payment Processing Business operating profit was just ¥3.0 bn when we announced
the target to increase it by more than threefold, to¥10.0 bn, in five years along with the specific strategies to achieve this target (please refer to page 3
for an excerpt from the FY2015 Financial Results
Briefing materials). And in the fiscal year ended

September 30, 2020 (FY2020), this ¥10.0 bn target
was achieved, according to plan.
Business Activity and Impact on Earnings fromCOVID-19
On January 27, 2020, even before the World
Health Organization officially declared the global
pandemic on January 30, GMO-PG and its consolidated subsidiaries adopted teleworking as a basic
workstyle, and the teleworking ratio, which began
at 70%, reached 90% on April 7 when the state of
emergency was declared. During that time, such
issues as operational efficiency, communication,and in-home work environment were addressed
through various surveys conducted with all partners. New KPIs including productivity, loyalty,
and health were also adopted on a trial basis inaddition to the standard KPIs used during normal
business conditions.
Regarding business performance, the characteristics of our business model, which can be expressed
as “cross-industry,” “stock & transaction,” and “feedback loop,” made our business less affected bymacroeconomic changes. In addition, the shift
toward online payment and cashless p­ enetration
accelerated under these circumstances. As aresult, the impact of COVID-19 on the ­businessperformance of GMO-PG and its consolidated
subsidiaries has been minimal to date.

Overseas (Global)
Offline payment (IoT)
Financial institution
services (Cashless)

during the COVID-19 era. Society at large isaccelerating DX initiatives by deploying digitaltechnology and data usage in order to adapt tothe drastic changes brought about by the pandemic. To respond to these needs, GMO-PG and
its consolidated subsidiaries are committed tocreating value for their customers and working
to resolve social challenges through payment­services, under the motto of “Customer First.”
We ask our shareholders for their continued
support and understanding of the businessesof GMO-PG and its consolidated subsidiaries.

Aiming for Sustainable Growth by Supporting theDigital Transformation (DX) of Our Customers“Corporate disparity widens in times of crisis.” Thisis one of the phrases I have repeated to partners

December 2020

Issei Ainoura

President and Chief Executive Officer

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

02

03

Our Services and Focus Areas

Public dues
Payments ofautomobile taxes
and water bills

GMO Payment Gateway

Content purchases
Payments when purchasing
content such as music,
video games, and e-books

Utilities
Bills paid on a regularbasis such as electricity
and gascreates new value inpayments with our sights
set firmly on the future,adapting to a world wherechange happens faster thanever before.

Payments of fixedmonthly expenses
Regular payments for water
delivery, newspapers,
magazines, etc.

Internet shopping
Supporting payments forpurchases of everyday
goods, perishables, etc.,
and the advertising
operations of businesses

Services used indaily life/at home

Usage fees for various
services
Payments for travel tickets
and car rentals, delivery
services, etc.

Services usedoutside the home

Our Business Activities Center on These Five Focus Areas

E-COMMERCE

Providing payment services

CASHLESSGLOBAL

Providing all types of highly conve-(GMO Payment After Delivery)

Expanding our service offerings to

Globally exporting our expertise,

Payment after receiving products

financial institutions and business

nient, secure payment methods,

from internet shopping to online

operators to respond to the accel-

Cash deposits andpayment

Accommodating need for cash

eration in the adoption of cashless

payments of taxes and public dues

know-how, and services in pay-ments and finance, while actively

withdrawals at ticket machines

promoting partner strategies
through investmentin the cashless era

Card payments at vending machines
Diverse payment methods handled
securely

Shopping by smartphone

Payment services for purchasing goods and services outside
the home

FinTechIoT

For merchants, we develop pay-

Provide highly secure services toment methods that utilize financial
technology and services that support growth according to theirfunding needs

the rapidly expanding offline payPayments at offline stores

ment market by promoting cash-

for services and purchases

payment as well as the growth ofUsing smartphone apps to pay

less payment and contactlessthe unattended payment market

GMO Payment Gateway, Inc.

Sustaining global payment
infrastructure

Providing safe and convenient payment services around the world

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

0405

11,000

Our Strengths Nurtured over the Years

10,000

Based on GMO Payment Gateway’s core belief to “enrich the world throughpayment,” we have continuously expanded into and captured markets by offering
new services. We will continuously endeavor to create new value in payment
by deploying our unique strengths fostered during the Company’s growth.

2018

9,000

Issued euro-yen convertible

bonds, 2023 maturity, raising
approx. ¥17.5 bn.

8,000

Operating Profit
Systems Development

Sales
1995
Company established

2015

2020
Rolled out the new SMS Sentaku Barai(SMS Choice of Payment) service, featuring a new method of payment, implemented by TEPCO Energy Partner, Inc.

Established capital andbusiness alliance with SMFG
(Approx. ¥8 bn in capital

2000
Company name changed to Card
Commerce Service, Inc.
Issei Ainoura appointed as p
­ resident(currently president and CEO)procured)*1
2013

Established GMO Payment

2008

subsidiary

Service

Launched GMO Payment After

Acquired credit card payment

Deliverybusiness from Payment-One, Inc.
2008

2005

Company name changed toInitiated global business

Stock Exchange First Section

GMO Payment Gateway, Inc.

Sales

2012

Listing transferred to Tokyo

Systems Development

Sales

expansion

2005

Listed on Tokyo Stock Exchange
Mothers market (raised ¥1.2 bn

Sales

through IPO)

Systems Development

Sales

Sales

2007
Started payment services for
public taxes and dues

2016
GMO Financial Gate, Inc. became
a consolidated subsidiary

Systems Development

Investment

Growth Stage

01

Sales andMarketingContinually enhancing our ability to negotiate and make proposals since our earlyyears. Supporting our clients’ growth with
our unparalleled human resource base.
2004

2020

625 (consolidated)

40

02

Systems
Development

Building a reliable system to process

high-volume concentrated transactions.
1,000

0

2018, 2019, 2020
Received the highest 3-star rating in the“Monitoring” evaluation conducted by
HDI-Japan

Investment

2014
Launched GMO Pallet, the smartphone
app-based payment service that was to be
the predecessor of Ginko Pay

Start-Up Stage

2,000

Client Support

Systems development capabilities thatcater to each customer’s needs.

03

ClientSupportOur client-focused support system

attempts to solve even the underlying

Client Support

and latent issues.

2019, 2020
Awarded the 5-star rating under the HDI
Five Star Recognition Program
Investment

2016
Acquired stake via GPF*2 in
FinAccel, Indonesia’s No. 1
provider of deferred payments

Inception

3,000

2019
Upgraded the core system in anticipation of increased transaction
volume and value

Systems Development

2014
Started the design, operation, and maintenance service for Visa’s B2B exclusive payment system “Visa Business Pay”
Sales

Systems Development

Systems Development

2017
Started Ginko Pay service

Four Strengths

Number of partners (employees)

4,000

2020
Launched the new Electronic
Invoice Early Payment service
with Infomart Corporation

2017
Started marketing the GMO-PG Processing
Platform, a one-stop payment solution
service targeting financial institutions andfinancial service providers

6,000

5,000

2018
Launched GMO B2B Early Payment,
which enables prepayment on
accounts receivable

Service, Inc. as a consolidated

Launched PG Multi-Payment
2004

Sales

7,000

(Unit: Millions of yen)

2020
GMO Financial Gate, Inc. listed on

Tokyo Stock Exchange Mothers market

Expansion Stage

04

Investment

Ability to uncover promising start-ups.
Comprehensive support that contributes

1995

2005/92006/92007/92008/92009/92010/92011/92012/92013/92014/92015/92016/92017/92018/92019/9to the growth of our investees.

2020/9*1 Capital alliance between GMO Payment Gateway, Inc., GMO Internet, Inc., Sumitomo Mitsui Financial Group, Inc., and Sumitomo Mitsui Banking Corporation.
*2 GPF stands for GMO Global Payment Fund Investment Partnership.
(Note) IFRS Accounting was adopted from the fiscal year ended September 30, 2018. Figures for the fiscal year ended September 30, 2017 have been restated on this basis.

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

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07

GMO Payment Gateway at a Glance
Our business comprises of three reportable segments

Payment Processing
Business

separated by service type. We identify the following five
focus areas to be the growth drivers of our business.

Money Service
Business

Payment Enhancement
Business

Revenue Breakdown
Payment
Enhancement
Business
Money Service
Business¥0.6 bn2%¥9.4 bn
28%

Payment
Processing
Business¥23.0 bn70%

Given the continued growth of the e-commerce (EC) market,

In addition to acquiring new merchants, the GMO Payment

Revenue at online advertising service, which is undergoing

our focus is on acquiring large merchants and to expand

After Delivery service trended favorably from nesting demandbusiness structural reforms, declined year on year but

services to a wide spectrum of non-EC operators. Despite

due to COVID-19. In addition, remittance service grew fromexceeded internal plans, thanks to heightened demand fordelays to new projects caused by COVID-19, the expansion

demand for refunds arising from event cancellations. New

online advertisements due to COVID-19.

of EC market and cashless payment led to the growth inservices addressing the B2B market trended strongly, such

On May 18, 2020, GMO-PG divested all of the shares it

both transaction value and volume. In the offline payment

as lending services to overseas business operators, GMO

held in the consolidated subsidiary Macro Kiosk Berhad.

market, steady progress was made in winning new orders for

B2B Early Payment, and GMO B2B AR Guarantee.

projects addressing the Unattended Market (UM) such as
automatic payment machines and ticket machines as well as

FY2020the start of the “stera” project.

Revenue¥33.0 bn

Revenue/Segment Profit

Revenue/Segment Profit(Millions of yen)

18,811FY2019
Revenue

Focus Areas(Millions of yen)

632

9,416

23,037

10,031

Revenue/Segment Profit*(Millions of yen)

7,478

11,581

1,972

FY2020

Segment profit

FY2019
Revenue

1,799

110

FY2020FY2019Segment profit

Revenue

Online Payment
	Pay-as-you-go/non-recurring payments(payment for merchandise/goods, digital content, etc.)	Recurring payments(payment for public taxes and dues, etc.)

E-COMMERCE

77
FY2020

Segment profit

Online Advertising Service
SSL Service

Delivery Service

GMO Payment After Delivery
Remittance Service

FinTech602

Early Payment Service

Transaction Lending
B2B FactoringGinko Pay

GMO-PG Processing Platform

CASHLESS

Offline Payment

IoT
Z.com Payment(overseas payment service)

GLOBALGlobal Lending* Due to the deconsolidation of Macro Kiosk Berhad in FY2020, its business has been reclassified as a discontinued operation. As a result, the figures for revenue andoperating profit only represent the amounts for continuing operations and exclude the discontinued operation.

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

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09

Focus Areas

Business Environment and Growth Strategy
and its consolidated subsidiaries are focused on,

Broader EC market and total addressable market (TAM)2019 ¥19.3 tr

2025 ¥45.0 tr*1

the estimated TAM would reach ¥45.0 tr in 2025.

The B2C e-commerce market (consumer EC market size

Given this business outlook, the growth strategy ofin 2019: ¥19.3 tr*1), the core of the broader EC market, is

GMO-PG and its consolidated subsidiaries are as follows:

forecast to continue its high growth from advances in• Acquire large and high-growth merchants and financial

logistic reforms and improved functionality of smart-institutions;phones. In addition, online migration is progressing in• Win large projects that require system development;

areas outside B2C EC such as non-merchandise services,

Shouhei Umiguchi

General Manager,
Sales Department #1,
Management Department of Sales #3,
Innovation Partners Division

Key Person Interviews with Partners• Expand support services for DX platforms; andas well as sectors that are essential to daily life such as• Accelerate monetization of new services.

We aim to achieve above-market growth rates throughtaxes, public utility payments, and medical services.

the above strategies.

Furthermore, there are huge opportunities to

explore in the B2B EC market (inter-corporate com-

*1 From METI’s “FY2019 Global Economy Survey for Formulating an
Integrated Domestic and External Economic Growth Strategy(E-Commerce Market Survey).” Figures for FY2025 are based on GMOPG’s forecasts.

mercial transaction market size in 2019: ¥353 tr*1).

Aggregating the above three areas that GMO-PG

Operating StoresTransaction Volume

End of FY2004

6,837

Q.1

E-COMMERCE

Fresh
Food

customers’ business. Customers are not just looking fora payment method. What I am particularly focused on is

Visionhow to raise the value-added of the customer’s overallbusiness in addition to contributing to growth by provid-

To be an innovation partner thating new value through improved user interface/user

experience (UI/UX) to their customers (i.e., consumers

responds to diversifying needs

and users, etc.).

in these times of change and

FY2020*2

What value do you contribute to customers?

What I always bear in mind is how to contribute to our

Q.2

PrintedBooks
Automobile
Taxes

E-books

Tickets

End of FY2020*1

141,573

37 mil

FY2004

Games &
Music

2.57 bn

Transaction Value
FY2004Taxes¥

120.0 bn

FY2020*2
ApparelCDs

Water
Utility¥*1 Operating stores as of the end of September 2020 exclude the recent impact of a sudden increase in new stores from a particular merchant.
*2 The transaction volume and transaction value include the payment transactions at GMO Financial Gate, Inc.

5.8 tr What personal achievement do you want tocontributes to resolving issues
and supporting the growth ofrealize at GMO-PG?

Our business is like the sport of mixed martial arts. In

order to guide our customers toward the path of suc-customers

cess, it is extremely important to collaborate with various
business partners such as SC, MD,* EC systems, etc.

I strive to become an “indispensable resource for ourcustomers and partners,” and, as such, it is necessary tocomprehend the underlying factors of the customer’sbusiness and to keep abreast of the cutting-edge technology and the rapidly changing industry trends that
require me to constantly hone my skills.
* SC: Supply chain,
MD: Merchandising.

TO PICSupporting the Digitization of Electric Power Utility Payments through Providing“SMS Sentaku Barai” with TEPCO Energy Partner, Inc.

The adoption of online payment for public utilities andWe will continue to contribute to the digitization oftaxes is progressing in Japan. The trend is likely to accel-

Japan’s industries through payment.

erate given the current circumstances to adopt practices
that avoid the “Three Cs” of closed spaces with poor
ventilation, crowded places, and close-contact settings,
for the prevention of the COVID-19 contagion.

Supporting digitization of electric power utility
payment promoted by TEPCO Energy Partner, Inc.

GMO-PG has commenced providing the payment

screen and payment processing service to TEPCOEnergy Partner, Inc., which enables the shift frompaper-based payment to a smartphone-based
payment method from November 2020.

* This system consists of sending an SMS notification that includes invoice
information and a URL link to a user-specific payment screen where users
can choose between credit card or PAYSLE payment. In the case of
PAYSLE payment, users need to access the URL and display the barcode
within the PAYSLE app to complete the payment at a convenience store.

The launch of the new service “SMS Sentaku Barai”(SMS Choice of Payment)* by TEPCO Energy Partner,
Inc. will enable a fully paperless method of payment.
GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

1011

Focus Areas

Business Environment and Growth Strategy
Initiatives undertaken to support customer growth,

FinTech market’s total addressable markets (TAMs)

2019 ¥0.7 tr

given this business outlook, are as follows:

2025 ¥3.0 tr• Asset shift to higher-margin services; and(Note) Deferred Payment market size

• Creation of new services (expand into B2C and B2B

FinTech services offered primarily to EC operators

domains).

include Early Payment services to improve cash flows,

In order to expand the FinTech business, GMO-PG

lending and B2B factoring services to domestic andand its consolidated subsidiaries carried out fundrais-overseas companies, and the payment service GMO

ing totaling ¥8.0 bn from a third-party allotment inPayment After Delivery. The Deferred Payment market

2015 and ¥17.5 bn from the issuance of euro-yen

size, in particular, was estimated to be ¥755.0 bn inCB-type bonds with stock acquisition rights. These

FY2019 and is forecast to expand to ¥2.0 tr in FY2023

Consumers can make their payment after making thethe know-how and expertise gained from the deferred

B2B transactions in November 2020, which leverages

purchase or receiving the merchandise by using our

payment service GMO Payment After Delivery for B2C

proprietary screening, similar to using a credit card. ThisEC transactions that was launched in May 2013.

cash usage. In particular, consumers’ use of GMO

Payment Service, Inc. handles the various procedures

the scope of business and broaden-

during the COVID-19 era, and we continued with normal

focus on their main business and also to reduce the risk

ing the services of the Money

related to B2B transactions allowing the customer tooperations in order to handle the inquiries, even as tele-of uncollectible accounts.

Group. I believe our value proposition is to improve theService Business that contribute toquality of service so that customers can utilize the ser-customer growth and efficiency

vice ­conveniently and securely.

Q.2 What personal achievement do you want torealize at GMO-PG?

My previous job was involved in customer support such

GMO

Kake-Barai

The advantage of using GMO Kake-Barai is that GMO

Payment After Delivery has surged from nesting demand

working was implemented by other companies in the

Order

ty
ar
-p nt
ird meTh aypand capital efficiency by expanding

Counterpart

t
di g
re in
C en
re
sc

consumers who are without, or do not use, credit cards.

Sale

B2B
operatore

GMO Payment After Delivery is a payment service forservice GMO Kake-Barai (GMO B2B Pay On Credit) fort

GMO Payment Service, Inc. commenced the payment

ic

What value do you contribute to customers?

payment method is in high demand given Japan’s highAiming to further improve revenue

GMO Payment Service Rolls Out B2B Kake-Barai to B2B Operators.

enVision* Source: “Online Payment/Settlement Service Providers 2020” and“Domestic Cashless Payment Market 2019,” issued by Yano ResearchInstitute Ltd. The figure for FY2019 is an estimate, the forecast for FY2023
is based on this source, and the figure for FY2025 is based on our forecast.

vo

TO PIC

Q.1

FinTechfunds will be used to further raise capital efficiency.

and to ¥3.0 tr in FY2025.*m

Key Person Interviews with Partners

In

General Manager
Customer Service Department
GMO Payment Service, Inc.

Pay

Hiroki Akutsu

Trend in Deferred Payment Market Size(Millions of yen)

2,000,000

1,500,000

as IT help desk and call centers, but here we strive to go

1,000,000

inquiry from each customer and reflecting the results of

500,000

GMO Payment After Delivery. Our actions are grounded0

The Deferred Payment market is forecast to achievestrong growth, reaching approximately ¥2 tr in FY2023.

¥755.0 bn+32.0%

beyond simply replying to inquiries by analyzing every
the analysis to improve the service and scalability ofin our commitment to develop GMO Payment After

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

Delivery by ourselves. I hope to realize my personal

development by contributing to raising the quality ofservice and to work to make Payment After Delivery thepayment method of choice for more users.
GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

1213

Focus Areas

Business Environment and Growth Strategy
The Japanese government is aiming to raise the coun-

services. The TAM is estimated at ¥2 tr, the IT system

try’s cashless penetration rate from 20% in 2016 toinvestment of financial institutions.

40% in 2025.*

Based on this outlook, the growth strategies include

The cashless domain that GMO-PG and its consoli-

the following:

dated subsidiaries are targeting is BaaS (Bank as a

• Further expand the platform service to financial

Service), where we provide the necessary application

Go Hashimoto

General Manager
Processing Business Department
Digital Transformation Management
Department
Innovation Partners Division

Key Person Interviews with Partners

that enables financial institutions and financial service• Roll out services to business operators.

such as Ginko Pay, which was co-developed with The

penetration rate of Japan’s cashless payment.

providers to offer cashless business and promote DX,

CASHLESSWhat value do you contribute to customers?

Both financial institutions and other business operators

face innumerable challenges in promoting digital transformation (DX) and responding to the needs of a cash-

Visionless society. Given this situation, we strive to ascertain

what we can provide, in other words, how we can be an

Aggressively promote

effective partner that resolves the issues that even cus-

tomers may not have realized through extensive discus-

new business creation andsions held with them on business growth. As a result of

support digital transformation (DX)these efforts, the value proposition is to contribute both

We believe these strategies will contribute to raise the

Bank of Yokohama, Ltd., and issuing/acquiring

TOPICS

Q .1

institutions; and* Ministry of Economy, Trade and Industry’s “Cashless Vision” released in
April 2018.

Launch of GMO Cashless Platform, a Bundled Cashless Solution for Physical (Offline) Stores

Recent years have seen an increase in the integration ofmultiple payment methods. GMO-PG aims to be theEC and offline stores, as online operators set up offline

infrastructure of safe and convenient payment pro-stores and judging by the increase in inquiries regard-

cesses by offering such services.

ing cashless payments from offline store operators.

One-stop offering of cashless solutions to offline stores

GMO-PG launched the GMO Cashless Platform in
November 2019, a bundled cashless solution for offline

Offline(physical)
storesstores in order to support cashless migration of operators across a wide spectrum of businesses. This service

QR/Barcode payment services

enables one-stop implementation and management ofvarious QR and barcode payment methods, and plans

GMO
Cashless
Platform

are underway to further increase the lineup of cashless
payment methods.
The service alleviates the offline store operator’s
concerns about the cumbersome work of handling

directly and indirectly to enhance the corporate value ofand cashless service for financial

our customers.

Q .2

institutions What personal achievement do you want torealize at GMO-PG?

Ginko Pay Selected as a Payment Option on TOYOTA Wallet, Toyota’s Smartphone-Based Payment App
Ginko Pay, which GMO-PG provides as a base system,has been adopted as one of the payment options on

In order to achieve the Japanese government’s target to

TOYOTA Wallet,* a payment app that aims to contrib-

Ginko Pay and offer issuing/acquiring services to finan-

contribute to developing the foundations of a “mobil-

the promoters for achieving the government’s target. We

The implementation of Ginko Pay was made pos-reach 40% cashless penetration by 2025, we provide

ute to improve the convenience of payments as well ascial institutions who are both our customers as well as

ity society.”also provide “Enterprise-Version Pay” to non-financial

sible by using “Enterprise-Version Pay” offered bybusiness operators.

Sumitomo Mitsui Banking Corporation. Plans aretribute to achieving the government’s target but also towithin the TOYOTA Wallet to be able to use this pay-by sharing and building the vision of what the payment

payment function.

The personal achievement I aim for is not only to con-contribute to reforming Japan’s payment infrastructure

TOYOTA Wallet adopts Ginko
Pay as a payment method.

* TOYOTA Wallet is a smartphone payment app that offers the three
payment options of “TOYOTA e-money,” which uses a prepaid balance; “TOYOTA TS CUBIC Origami Pay,” which functions as a virtual
credit card; and “Ginko Pay,” which is a debit-type service. Users canchoose the type of payment option from TOYOTA Wallet that best
suits their needs.

underway to enable users who choose Ginko Pay
ment method at merchants through the multi-bankinfrastructure will look like with our customers.

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

14

15

Focus Areas

Focus Areas

Reona Koizumi

Manabu Watanabe

Executive Office
Chief of Corporate Planning Division
GMO Financial Gate, Inc.

Key Person Interviews with Partners

IoT

Q .1

What value do you contribute to customers?

The main initiative in IoT is to provide embedded-type

Visionpayment terminals for the Unattended Market, i.e., areasthat eliminate the need for humans to carry out the pay-

Create new customer value by supporting DX and cashless adoption
by our customers to achieve
unmanned/labor-saving payment
systems that improve productivity

ment operation. Customers see the benefits of cashless

payment when considering unmanned and/or labor-saving
measures as a way to respond to the decline in the labor

population. We can contribute to improving the customer’s
productivity and thereby raise their corporate value, by

Head of Global MSB Promotion /Planning Department
Corporate Value Creation Strategy Division

Key Person Interviews with Partners

GLOBAL

Q .1

My work is to provide lending services that provide the

Visionnecessary growth funds to North American venture companies in the FinTech space. This is very meaningful work

Expanding lending service and paymentbusiness by promoting alliances with top
FinTech companies in Asia and North
America and strengthening our organization

focused on the future, as we provide funds that suit thesecompanies’ growth profile based on an accurate assessment of how their businesses will transform future society
through new technologies.

Q .2

providing support services for DX to resolve issues thatarise from conventional manned operations and systems.

Q .2

Business Environment and Growth Strategy
Advances in the Internet of Things (IoT) and therapid expansion of payment/subscription systems

What personal achievement do you want torealize at GMO-PG?

It is important to seek personal value through work

have been further accelerated by the COVID-19

since we spend more than half of our lives working. The

pandemic against the backdrop of the Japanese

moments when I feel a sense of personal achievement

government’s promotion of cashless payment. The

are when the customer says “thank you” for providing“stera” project is fully launched and the Unattended

value that exceeds the customer’s expectations and forMarket (UM), including fare payment machines for

Business Environment and Growth Strategy
Aiming for further business expansion by strength-is also seeing rapid deployment.

TOPIC

Mothers, Group companies will focus on expanding
business in the offline market.

 MO Financial Gate, Inc. is ListedG
on the TSE Mothers Market.

nies is a positive mindset. Still, failure is never far away,

and business partners in the focus markets of theand while it is important to review its causes, I believe that

United States, Indonesia, India, etc., as well as thethe only path to ultimate success is not to stop there, atpayment service Z.com Payment in the Asian region,

short-term success, but to persevere proactively in yourespecially the Taiwanese market.

thinking and action.

Develop a Pipeline for the “Post-COVID-19”
Phase Reflecting the Differences in theSpecific Strategy for Country and Region

Deterioration(%) “With COVID-19”

Timing of Recovery Among Countries
COVID-19 has hit every country in the world and is leading todifferences in the recovery phase depending on the country.
Despite having promising investment targets in many countries
as part of our global strategy, our stance is to be cautious
under the current circumstances.
The first phase is to build up a pipeline that leads to future

The lead manager for the IPO, at the head office of Daiwa Securities(July 15, 2020)

realize at GMO-PG?

providing our type of services to futuristic venture compa-

business to support the high growth of investees

TOPIC

With the IPO of GMO Financial Gate, Inc. on TSEWhat personal achievement do you want to

The most important success factor for a job that entails

ening our organization and expanding the lending

supporting their growth.

parking lots, vending machines, and ticket machines,

What value do you contribute to customers?

growth in order to achieve our growth target for operating

GMO Payment Gateway, Inc.

Recovery“Post-COVID-19”

8

Phase 3

4

Asia

0

United States

Phase 2

–4

EuropeJapan

Phase 1–8

profit of over 30%.

(Note) Our estimates of global GDP growth

2020
2021
Current

2022

2023

2024

2025

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

16

17

Governance: Systems to Support Sustainable Growth
Corporate GovernanceContinual Improvement of GovernanceElection and Procedures for Appointment of Directors

The appointment of directors should give due attention to make the Board well balanced in knowledge, experience,

Fundamental Approach

Under the management principle of “Seeking both material and spiritual wealth by contributing to the progress anddevelopment of society,” we implement governance systems that can effectively and efficiently turn these principles

into reality. The fundamental approach to corporate governance in our Group is to devise and implement governancesystems for healthy business development, while simultaneously ensuring both the efficiency and compliance ofmanagement. We consider governance to be one of the most important issues in management.

Board of Auditors(4 Auditors, Including 3 External Auditors)

Accounting
and Audit

Accounting Auditors

Elect andDismissof the Board.

Elect and Dismiss
Elect andDismiss

Representative Director
ReportManagement
Committee

Instruct
ReportInternal
Audit Office

Audit

Instruct

ReportNomination andRemuneration Committee

Divisions
ReportRisk Management
Committee

GMO Payment Gateway, Inc.

Collaborate

Concurrent position of directors
Information sharing and confirmation

AuditorRemuneration of Directors

The Nomination and Remuneration Committee is established and chaired by an external director as the advisory bodyto the Board in order to ensure the validity and transparency of the process of determining the remuneration of­directors. The remuneration of directors is decided following deliberations by the Nomination and Remuneration

Committee and the submission of a proposal to the Board for fixed remuneration and to the representative director

and president for performance-based compensation in the form of a bonus. Remuneration of Auditors are determinedthrough deliberation at the Board of Auditors.

Organization structure

Directors’ BIP Trust

The Company adopts the BIP Trust (Board Incentive Plan) for bonuses paid to directors as part of a performance-based
compensation scheme for directors. This is a medium- to long-term incentive plan wherein common shares are distributed at the time of retirement based on the achievement of business targets of each year. This incentivizes directors toConsolidated Group of Companies

carry out management in awareness of the stock price and financial results from a medium- to long-term perspective
and to share common interest with shareholders from a medium- to long-term view.

Board of Directors and Executive Committee

The following initiatives shown below are implemented in order to strengthen the management oversight function throughthe separation of supervision and execution and to appropriately respond to changes in the business environment.

The Board of Directors makes decisions on matters of important management issues and on legal issues. The Board
also oversees the execution of business responsibilities by the directors to ensure transparency, fairness, andefficiency in decision making.

Independence Standards and Rules for External Directors and External Auditors in order to evaluate their independence.

incorporates objective and qualitative methods such as surveys on directors and auditors to evaluate the effectivenessSelect, Discharge,
and Supervise

Collaborate

Independence Standards and Qualifications for Independent Directors

The Company stipulates the independence standards for external directors and external auditors according to thetion, and remuneration that is not solely limited to the composition and operations of the Board. The Company also

Elect and Dismiss

Board of Directors (11 Directors, Including 2 External Directors)

Audit

Organization structure

The Company confirms the appropriate effectiveness based on the perspectives of organizational structure, nomina-

General Meeting of Shareholders

Collaborate

appropriate Board size.

Evaluating the Effectiveness of the Board

Corporate Governance Structure
Elect andDismissand skills in order to fulfill its roles and responsibilities, and should be constituted in a manner to achieve diversity andOrganization structure

The Management Committee is charged with the decision-making function for the execution of important operations,in order to strengthen management oversight through the separation of supervision and execution. The Management
Committee carries out timely and appropriate decisions based on deliberations on important matters related to the
execution of operations carried out in accordance with the Basic Policy of the Board.

Organization structure

IR Activities

The Company carries out timely disclosure of management information and investor relations (IR) activities for sharehold-ers and other investors to enhance the transparency of management in order to achieve the aims of corporate governance.
Summary of Activities for FY2020 (from October 1, 2019 to September 30, 2020)
Activity

Number of Events

Financial results announcements and briefings

4 times

One-on-one meetings

Approx. 400

Participation in broker conferences

Board of Auditors

5 times

Our Board of Auditors is comprised of four members (of whom three are external auditors). Auditors oversee the exe-

cution of duties of directors by conducting audits according to the audit plan formulated by the Board of Auditors andby attending important Board of Directors meetings, etc.

Organization structure

Second Consecutive Year to Receive the Award for Excellence in Corporate Disclosure
We received the top award in the Tele-communication/Internet industry category in
the 2020 (26th) Awards for Excellence in Corporate Disclosure, organized by The
Securities Analysts Association of Japan’s Corporate Disclosure Study Group. This is
the second consecutive year to be honored with the award, following receipt of lastyear’s award, which was also the first year of being evaluated.
The award aims to promote corporate disclosure and emphasizes voluntary and proactive information disclosure
over mandatory disclosure. The result is based on the strict selection by over 500 experienced analysts based on the

Kazutaka Yoshida
Standing Auditor

Takashi Iinuma

Kazuhiko Okamoto

AuditorExternal Auditor

Yumi Hokazono
External Auditor

five criteria of (1) management stance on investor relations, (2) investor meetings, (3) fair disclosure, (4) matters related
to corporate governance, and (5) voluntary information disclosure.

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

18

19

Opportunities and Risks: Systems to Support Sustainable Growth
Opportunities for GMO Payment Gateway

3

Resolving Social Challenges through Services with Low Environmental Footprint

Potential breach of personal information and its impact
Risk

Risk of external leak of database information managed by GMO-PG and its

Since GMO-PG and its consolidated subsidiaries became part of the GMO Internet Group in 2004 and pursued Group

consolidated subsidiaries that containsof conventional methods of payment, in our efforts to contribute to the growth and resolution of issues faced by society

information, names, addresses, tele-synergies, we have undertaken initiatives to promote online migration and cashless and paperless transactions in lieu

personal information such as credit cardand business operators. In addition, the Money Service Business provides lending services to support the growth ofphone numbers, and email addresses.

Response

GMO-PG and its consolidated subsidiaries

implement a solid system to ensure against thisrisk by qualifying for the PrivacyMark. In addition,
as a member of the Japan Consumer Credit

Association, personal information management
operations are implemented according to the

Personal Information Protection Policy. In addi-

domestic and overseas business operators in FinTech and online businesses with a low environmental footprint, similartion, GMO-PG and its consolidated subsidiaries

to our business, and to improve cash flows of business operators.

established the Risk Management Committee to
implement effective and efficient risk manage-

Risks to GMO Payment Gateway

ment. The Risk Management Committee con-venes once every quarter and reports its findings

Information Security

on risk management to the representative direc-

tor, Board of Directors, and Board of Auditors, as

Basic Stanceappropriate.

The mission of GMO-PG and its consolidated subsidiaries is to contribute to the realization of secure and convenient

Organizational structure

payment for both consumers and businesses, with the aim to become Japan’s payment infrastructure. Information

security measures and responses to protect information assets from external threats, while utilizing the information
resources that are proprietary to the GMO-PG Group, are of the highest management priority.

Risk of service stoppages caused byunforeseen system failures on the part

Industrial Standard for personal information protection, JIS
Q 15001:2017.

With a scope that encompasses
all of our business locations, we

System failure and information security
Risk

management structure.

Certified ISO 27001 Compliant

Risks and Responses to Information Security
1

The following certifications for information security have been certified as measures to strengthen the risk

Responseof payment service providers (such as

The following requisite and appropriate

responses are enacted to mitigate risks, such as
security measures against unauthorized accesscredit card companies) and/or weak-from external and internal sources, a 24-hournesses in the systems of GMO-PG andsurveillance structure, duplication of systemits consolidated subsidiaries that result

configuration, insurance policy enrollment, andin the disruption of communication net-development of internal rules on operations.

works and the malfunctioning of applica-

Fully PCI DSS Compliant

have been certified as compliant
with the ISO/IEC 27001:2013
global information security stan-The services we provide are in fullcompliance with version 3.2.1 of

IS 686090/ISO 270001

the PCI DSS global security stan-

dard (within Japan, the JIS Q

dard for the credit card industry,

27001:2014 standard).

which was jointly formulated by

PrivacyMark Certified

the five global credit card brands

In recognition of the appropriate

JCB, American Express, Discover, MasterCard, and Visa.

measures to safeguard personaltions, caused by cyberattacks, computer

information, we have received

access from an external source, or natu-

fies compliance with the JapaneseAs such, we are delivering peace of mind to all of ourcustomers, in addition to securing credit card payments.

PrivacyMark certification that signi-

viruses, and/or unauthorized computerral disasters or accidents.
2

Compliance

Credit card information breach at merchants
Risk

Risk of joint liability to cover the indemnity cost of reissuing credit cards when

Response

the merchant, etc., does not have theIn order to mitigate this risk, GMO-PG and its

consolidated subsidiaries undertake strengthened management of merchants that store

capacity to fulfill the obligation in thesuch information as well as promote services

event of information leakage of credit

where the credit card information is stored bycard information occurring at the

GMO-PG and its consolidated subsidiaries andmerchant.

not by the merchant.

Fundamental Approach

In our group of companies, we consider the scope of compliance to include a) ordinances, b) ethics and social norms,c) rules, regulations, and procedures, and d) management vision. With an awareness of “adapting to the demands ofsociety” (known as full-set compliance), which includes observance of ordinances, we are actively boosting the compli-

ance mindset of all our employees. In its yearly audit plan, our internal audit office also reviews our state of compliancewith ordinances, articles of incorporation, company rules, and other such regulations. When the circumstances arefound to require improvements, we take corrective measures, and follow up to ensure the corrections are enforced. In

addition to the normal reporting systems based on chains of command, we are building and operating an internal notification system for incidents where compliance violations are suspected within our company.

GMO Payment Gateway, Inc.

Organizational structure

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

20

21

HR Talent and Workstyle: Systems to Support Sustainable GrowthBased on the stance that “people determine the company,” the organization is structured so that all partners can jointly prog-

ress toward realizing the management goal of “sustaining operating profit growth of 25%,” by providing support for personal
growth through proprietary HR development and welfare benefits and by sharing the corporate vision with all partners.

Human Resources

Unit

End
September
2018

End
September
2019

End
September
2020

Persons

442

500

577

Persons

183

195

213

Persons

22

23

26

Persons

103

92

110

Persons

33

22

30

Years

4.0

4.1

4.3

The source of a company’s comprehensive capabilities

and competitiveness is determined by the diversity of its

Total numberof partners (employees) of whom, female
partners (employees) of whom, female
managers
Total numberof new recruits of whom, newgraduates
Average yearsof employment

human resources and how well these are leveraged. To
realize the aim of sustainable growth, it is important torecruit talent and establish talent development pro-grams to raise the capability of all partners in order torealize our Mission, resolve social challenges throughinnovative creativity, and create corporate value.

HR Development and Welfare Benefit Systems
Advisor System
Career Design System
One-on-One Training
360 Degree
Evaluation System

The figures above represent the full-time employees employed by GMO Payment
Gateway and differ from the data disclosed in the Annual Securities Report.

System to support the early development of a business professional by drawing up a
development plan and conducting monthly reviews

System whereby each person submits their career plansNewly graduated recruits rotate to each division and to each Group company to experience
their vision and work atmosphere, after which the new recruits select their designation.
System in which a partner can evaluate their line manager anonymously

Parental Care AllowanceChildcare Measures

System to support and raise awareness of the importance of the family, the basic unit of societyConsist of special working arrangements, funds, and grants at each life stage, from marriage tochild-rearing

Workstyle Reforms

Based on the concept that a company should be the platform for individual growth; implement

initiatives to continuously carry out workstyle reforms, including the establishment of proprietarytalent development programs and welfare benefits; share its vision with all partners to foster
organizational growth; and provide the means to fully deploy its talent. As a result of such

undertakings, we received the Best Company Award in the “Great Place to Work” ranking for thefifth consecutive year by Great Place to Work® Institute Japan.

Work Arrangements for GMO-PG and Its Consolidated Subsidiaries during COVID-19
Timing

Teleworking Ratio

Operation Measures

January 27, 202070%

Teleworking order is issued.
Commence teleworking in Tokyo’s Shibuya Ward and in the cities
of Osaka and Fukuoka.

January 30, 2020

80%

The World Health Organization declares a global emergency.

April 7, 2020

90%

Teleworking and stay-at-home orders are issued.
Japan declares state of emergency.

May 25, 2020

70%

Restart office attendance while maintaining teleworking.
Japan lifts state of emergency.

Four Strengths of Human Resources

Growing Together and Building a Win-Win
Relation with Investee Companies

Sales Capability
Innovation Partners Division

Yutaro Takahashi

General Manager
Sales Department #2
Management Departmentof Sales #1
Innovation Partners Division

The Secret of Success is to Continue to Stand
Together with Customers

Supporting Growth through In-House Development
and Operation of High-Precision Systems
The strength of our development capability lies in thein-house development and operation of advanced
systems. We aim to continue to be No. 1 in the rapidlychanging payment and financial domains, as each one of
us in the Systems Division works to capture the latest
market and technology trends so that we can continue toprovide a high level of quality, capacity, scalability,
security, and functionality.

Client Support
Corporate Support Division

Mariko Takeda
Executive Officer
Accounting/Finance
Department

Providing Meticulous Support Internally andExternally

The source of sales capability is for each and every salesperson to become the innovation partner for the customer.
Even with a through understanding of the customer’s business, it is not enough just to propose a pathway to successand growth that is based on various trends, such as cuttingedge technology, services, and business environment. Whatis important is to continue to stand by the customer as theirpartner after the release of a product or service and provide
all necessary support. I believe the source of sales capability
is to realize a win-win relationship between the customer
and GMO-PG, underpinned by the salesperson’s integrity
and sense of responsibility.

Takashi Suzuki
Executive Manager,
Management
Department ofPayment Service

Systems Division
Development Capability

The growth of GMO-PG and its consolidated subsidiaries
is supported by collaboration with various companies,
including tech start-ups, and adopting social reforms andnew technologies and concepts.
The investment capability of GMO-PG has the characteristic of being two-way; by providing maximum support
for new innovations to take root in society through business alliances and strategic investment in various companies, which in turn lead to the evolution of our own
services. One of the secrets of being able to continuallyprovide new services arises from the global portfolio ofinvestments centering on the United States and Asia, thehubs for FinTech start-ups.

The core part of the support capability is performed by
Corporate Support. Its strength is further enhanced byflexible involvement of experienced professionals fromthe Accounting/Finance, Legal, and Human Resources
departments. In particular, it is important to take on challenging new initiatives in order to create value in theemerging field of FinTech, where legal and accounting
treatments are still nascent. What we support is sustainable profit growth by promoting the security of the business as a responsible listed company.

Yusuke Nakayama
General Manager
Corporate Planning /New Business Creation
Department
Corporate Value Creation
Strategy DivisionCorporate Value Creation Strategy Division
Investment

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

22

23

Consolidated Financial Highlights

Consolidated Financial Statements

Achieved 15 consecutive terms of revenue and profit growth since being listed in 2005;
achieved operating profit of ¥10.0 bn by establishing position as DX platformer despite
an unprecedentedly adverse business environment

Consolidated Statement of Profit and Loss

Revenue*

Operating Profit*

(Millions of yen)

Up 22.7% YoY

35,00026,41725,0009,562

26,922

10,388

6,550
3,819

10,000

3,948

3,000

FY2016FY2017FY2018JGAAPFY20190

FY2020IFRSFY2016FY2017FY2018FY2019(Millions of yen/%)

IFRS

40

16.5

19,2690

FY2016

20,769FY2017

JGAAP
Total assets (left)

26,020FY201827,539FY201919,27023,846152

159

well as overseas lending. Payment Enhancement Business revenue(9,764)(13.424)

although it benefited from the higher online advertisement demand

(95)

(193)

9,562

10,388Financial income

43

336

Financial expense

(289)

(253)

Other income Profit before income taxes 3 
Profit/loss from discontinued
operations

20

26.2

33,453

FY2020

20.5

19.1

17.0

20

10

0

0

IFRS

7.8

FY2016

5.1

FY2017

JGAAP

Total equity (left)

Return on assets (ROA)

Ratio of total equity attributable to owners of parent (right)

Return on equity (ROE)

Our management priority is to continue to ensure stable

6.7

7.2

6.6

FY2018FY2019FY2020

(19)

517

9,297

10,989(3,044)(3,116)

6,253

7,872

growth in the Payment Processing Business. Money Service Businessrevenue grew 25.9% year on year on the strength of the GMO

Payment After Delivery service and the growth of remittance services
that captured refund demand arising from event cancellations as
declined 4.9%, as this business is undergoing structural reforms,

caused by COVID-19. The overall impact from COVID-19 was minimal
due to the increase in nesting demand, although there were adverse
effects on some sectors of merchants, including travel and ticket
merchants, and offline merchants saw a decline in transactions.
2 Operating Profit

Operating profit in the Payment Processing Business increased

15.4% year on year, thanks to growth in high-margin online pay-

ment. Meanwhile, operating profit in the Money Service Businessdeclined 8.8% year on year, due to hard comps recorded fromthe previous term’s one-off decline in expenses despite an

improvement in the profitability of services. Operating profit in

the Payment Enhancement Business declined 29.8% year on year
from the decline in segment revenue. As a result, consolidated(1,200)

(179)

5,052

7,693

5,267

7,624

operating profit was ¥10,388 mil, up 8.6% year on year, andoperating profit margin was 31.4%.

(Note) The operating profit year-on-year growth rate would be 25.1% if comparedwith the previous term’s operating profit of ¥8,301 mil, as stated in theSummary of Consolidated Financial Statements.

Non-controlling interests

(215)

69

Profit

5,052

7,693

3 Profit Before Income Taxes

Profit before income taxes was ¥10,989 mil, up by 18.2% year on
year, a higher growth rate than the operating profit growth rateof 8.6% year on year, due to gains on investment partnershipsthat increased financial income by ¥293 mil, to reach ¥336 mil,(Note) Due to the deconsolidation of Macro Kiosk Berhad in FY2020, its businesshas been reclassified as a discontinued operation. Due to this change, thefigures for revenue and operating profit only represent the amounts forcontinuing operations, and the corresponding amounts for the previous
term have been similarly restated.

and equity-method investment gains of ¥517 mil from 2C2P
turning a profit.

Consolidated Statement of Comprehensive Income(Millions of yen)

IFRS

In light of our earnings performance, which exceeded

shareholder returns as well as to sustain a retained earn-

our guidance, and to fulfill our commitment to stablestrengthening our corporate structure.

¥52 per share, which is an increase of ¥16 from ourings level necessary for future business expansion whileservices to the offline market contributed to the 22.5% year-on-year

Profit attributable to:
Owners of parent

12.9
10

55,18650,000Gross profit

1 Revenue

In addition to the steadily expanding EC market, the expansion of

Discontinued operations

30

30

139,99018.9(9,199)Profit from continuing operations

32.9
116,858
23.3
21.2
84,338(7,652)

Profit192,022150,000

Cost of sales

Income tax expenses(%)

200,000

100,000

FY2020

ROA and ROE

Attributable to Owners of Parent

33,046 Equity method investment
gains or losses

JGAAP

Total Assets, Total Equity, Ratio of Total Equity

26,922

Operating profit 2

5,000
0

Revenue 1

Other expenses

6,000

12,113

FY2020(Oct. 1, 2019 toSept. 30, 2020) Selling, general and­administrative expenses

9,000

21,05420,000Key Points of Consolidated Statement of Profit and Loss

FY2019(Oct. 1, 2018 to
Sept. 30, 2019)

Continuing operations

Up 8.6% YoY

12,00033,04630,00015,000(Millions of yen)

(Millions of yen)shareholder returns, the dividend has been decided at
FY2019 level.

* Due to the deconsolidation of Macro Kiosk Berhad in FY2020, its business has been reclassified as a discontinued operation. As a result, the figures for revenue andoperating profit only represent the amounts for continuing operations. The figures for FY2019 have been similarly restated.
(Note) IFRS Accounting was adopted from the fiscal year ended September 30, 2018. Figures for the fiscal year ended September 30, 2017 have been restated on
this basis.

FY2019(Oct. 1, 2018 to Sept. 30, 2019)

5,052

ProfitOther comprehensive income
Items that will not be reclassified to profit or loss  
Fair value of financial assets measured through othercomprehensive income  Share of other comprehensive income of equity method affiliates  
Total of items that will not be reclassified to profit or loss
 
Items that will be reclassified to profit or loss  
Exchange differences on translation of foreign operations  
Share of other comprehensive income of equity method affiliates  
Total of items that will be reclassified to profit or loss
 
Other comprehensive income after income taxes
Comprehensive income
Comprehensive income attributable to: 
Owners of parent 
Non-controlling interests
Total

GMO Payment Gateway, Inc.

FY2020(Oct. 1, 2019 to Sept. 30, 2020)

7,693

(522)

570

(4)
(527)

248
819

(11)
(87)
(99)
(626)
4,426

(279)
25
(254)
565
8,258

4,630
(204)
4,426

8,187
70
8,258
Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

24

25

Consolidated Financial Statements
Consolidated Balance Sheet

Key Points of Consolidated Balance Sheet(Millions of yen)

(Millions of yen)

FY2019FY2020
As of Sept. 30, 2019 As of Sept. 30,2020

FY2019FY2020
As of Sept. 30, 2019 As of Sept. 30,2020

Liabilities and equity
AssetsLiabilities

Current assets  Current liabilities  Cash and cash equivalents 452,013

95,830  Accounts payable–trade 5

4,688

4,296

  Accounts payable–other 5

16,11819,385  Deposits received 550,83487,059  Borrowings 515,80018,800  Other financial liabilities

108

400

  Income taxes payable, etc

1,569

2,491

396

352

10,782  Advance payments–trade 4

32,49631,039  Accounts receivable–other 421,566

23,585

207

1,440

–

5,000

  Provisions  Other financial assets

165

1,163

  Other current liabilities

2,229

3,383

  Other current assets

956

537

  Total current liabilities

91,746

136,169  Total current assets

121,069

169,379

Non-current liabilities  Corporate bonds

16,745

16,814  Borrowings

1,398

131

  Other financial liabilities

223

3,013

  Provisions

35

260

Non-current assets  Tangible assets  Goodwill and intangible
assets  Investments accounted forusing equity method  Operating and otherreceivables

517

3,714

4,359

4,854

3,001
–

3,740

  Deferred tax liabilities

1,975

85

54

  Other non-current liabilities

2,215

2,124

  Total non-current liabilities

20,704

22,399  Deposits to subsidiaries andaffiliates

5,000

–

  Other financial assets

4,803

6,711

Equity    Deferred tax assets

1,124

1,530

  Capital stock

4,712

4,712

116

115

  Capital surplus  

18,921

22,642

5,847

5,675

  Retained earnings

15,884

20,725  Treasury stock  (1,181)(1,149)  Other items of equity

1,231

1,769

  Total equity attributable toowners of parent

26,49431,734  Minority interests

1,044

1,719

  Other non-current assets
Total non-current assets

Total assets

139,990  Total liabilities

192,022

Total assets increased by ¥52,032 mil from the previous fiscal

Total liabilities increased by ¥46,117 mil from the previous

and cash equivalents from growth in the Payment Processing

deposits received from the growth in transaction value of theyear-end, to reach ¥192,022 mil, due to an increase in cash

fiscal year-end, to reach ¥158,569 mil, due to the increase inPayment Processing Business and the increase in accrued

growth in GMO Payment After Delivery transactions.

13,663  Deposits to affiliates andsubsidiaries 4

Total Liabilities 5 : Increase of Current Liabilities

Business and the increase in accrued revenues from the  Operating receivables andother receivables  Inventories

Total Assets 4 : Increase of Current Assets

112,451

158,569   Total equity

27,53933,453

Total liabilities and equity

139,990

192,022

expenses from the growth in GMO Payment After Delivery
transactions.

AssetsLiabilities and Net Assets(Millions of yen)

(Millions of yen)

192,022
139,990

Current assets
121,069
Non-current
assets18,921FY2019As of Sept. 30, 2019

192,022

Current liabilities
91,746

Current assets
169,379 4

139,990

Non-current
liabilities
20,704Non-current
assets
22,642

Non-current
liabilities
22,399Equity27,539Equity33,453

FY2019As of Sept. 30, 2019

FY2020
As of Sept. 30, 2020

Current liabilities
136,169 5

FY2020
As of Sept. 30, 2020

Consolidated Statement of Cash FlowsNet cash provided by operating activities amounted to

Net cash used in investing activities totaled ¥4,493 mil.

¥49,188 mil. Contributing factors included cash outflows

This resulted from cash outflows from payment for acqui-from the increase in accrued revenues and inventories

sition of intangible assets, payment for acquisition ofand an increase in income taxes payable, which wereother financial assets, and payment due to the sale ofoffset by cash inflows from an increase in profit before

subsidiary shares resulting in a change in the scope ofincome taxes and accrued expenses and an increase inconsolidation.

deposits received.

Net cash used in financing activities was ¥785 mil. This

resulted from cash outflows from repayment of long-termborrowings and payment of dividends, which were par-tially offset by cash inflows from the net increase in shortterm borrowings.

(Millions of yen)

FY2019(Oct. 1, 2018 to Sept. 30, 2019)

FY2020(Oct. 1, 2019 to Sept. 30, 2020)

Net cash provided by (used in) operating activities

1,311

Net cash provided by (used in) investing activities

858(4,493)

Net cash provided by (used in) financing activities

7,959

(785)

Translation differences of cash and cash equivalents

(148)

(93)

Increase (decrease) in cash and cash equivalents

9,980

43,817

Balance of cash and cash equivalents at the beginning of the period

42,03352,013

Balance of cash and cash equivalents at the end of the period

52,013

95,830

GMO Payment Gateway, Inc.

49,188Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

26

27

Board of Directors andManagement Committee Members
Member of the Board

Company Information(As of December 20, 2020)

Company Overview (As of September 30, 2020)

Management Committee Member

Ryu
Muramatsu

Masatoshi
Kumagai
Chairman and
Director

Director,
Executive Vice
President, General
Manager of Corporate
Value Creation
Strategy Division andPresident andRepresentative Director of
GMO-Z.com Payment
Gateway Pte. Ltd.

Issei
AinouraPresident andChief Executive
Officer

SatoruIsozakiDirector, Executive
Vice President,
General Manager ofCorporate Support
Division

Yuichi
HisadaSenior Managing
Director, General
Manager of
Innovation
Partners Division

Masashi
YasudaHirofumi
Yamashita

Director

Director

Takehito
KanekoDirector

Name	GMO Payment Gateway, Inc.
Stock listing First section of the Tokyo Stock
Exchange (Securities code: 3769)
Establishment	March 1995
Head office	SHIBUYA FUKURAS 15F
1-2-3 Dogenzaka, Shibuya-ku, Tokyo, 150-0043,
Japan (Offices relocated to the above address
on November 25, 2019)
Capital stock	¥4,712 million
Capital surplus	¥5,675 million
Number of
employees	625 (consolidated)
Business outline	Integrated payment-related services
and financial services

Memberships	Japan Consumer Credit Association	Japan Multi-Payment Network Promotion	Association (JAMPA)	EC Payment Forum	Japan E-Commerce Consultant Association(JECCICA)
Major subsidiaries	GMO Epsilon, Inc.
	GMO Payment Service, Inc.
	GMO Financial Gate, Inc.
	GMO-Z.com Payment Gateway Pte. Ltd.
Number of Group
companies	12 consolidated subsidiaries and 4 equitymethod affiliates

Stock Status (As of September 30, 2020)

Notes for Shareholders

Total number of authorized shares: 102,400,000
Total number of issued shares:
74,301,000
Number of shareholders:
7,489

Business year
October 1 through September 30 of the following year
Base dates for dividends of surplus
December 31, March 31, June 30, September 30
Annual meeting of shareholders
Annually in December
Shareholder registry administrator
Mitsubishi UFJ Trust and Banking Corp.
Administrator contact information
Mitsubishi UFJ Trust and Banking Corp. Stock Transfer Agency
Department 1-1 Nikkocho, Fuchu-shi, Tokyo 0120-232-711 (toll-free)
Stock listing Tokyo Stock Exchange
Method of public notices Through electronic public notices
Notices published at https://corp.gmo-pg.com/en/ir/(However, when electronic public notices cannot be published due toan accident or any other inevitable circumstances, we will publish themin the Nihon Keizai Shimbun newspaper)

Shareholders and Numbers of Shares
Financial institutions

Other institutions

Individuals, others(17,032,705 shares)(31,206,911 shares)(3,500,873 shares)

22.93%Yuki
KawasakiDirector

MasayaOnagi

Financial instruments
business operators

Akio
Sato

External Director

42.00%

Foreign institutions, etc. Treasury shares

0.67% (500,251 shares)

External Director

4.71%

29.68%(22,055,184 shares)

0.01%(5,076 shares)

Announcements
1. Points of note
(1) In principle, procedures such as change of shareholder address,bank remittance specifications for dividends, and purchase requests, arehandled by the account management institution (securities company,etc.) where the account was opened. Please contact the securities
company or other such institution at which you opened your account.
Please note that the shareholder registry administrator (Mitsubishi UFJ
Trust and Banking Corp.) does not handle such matters.
(2) Unpaid dividends can be received at the main branch or otherbranch offices of Mitsubishi UFJ Trust and Banking Corp.
2. Dividend calculation statements
The “Dividend Calculation Statement” also serves as the “Notice ofPayment” created based on regulations specified in the Act on Special
Measures Concerning Taxation. After receiving payment of the dividend, it can serve as confirmation of the dividend amount and as
information used when filing income taxes. Shareholders who receive
dividends through their securities accounts (pro-rated method fornumber of shares) should contact the securities company that performs the transactions for details.
3. For procedures pertaining to shares registered in special

Major Shareholders (As of September 30, 2020)

ShinichiSugiyama

Senior Managing
Executive Officer
Systems Division

MasaruYoshioka

Tomoyuki
MurakamiManaging Executive
Officer,
Strategic SalesManagement
Department, Innovation
Partners Division

Officer, President and
COO of SMBC GMO
Payment

Takeshi
YoshiiManaging
Executive Officer,
Executive Manager
of Management
Department ofSales #2, Innovation
Partners Division

Sharesowned

GMO Internet, Inc.

31,172,200

41.95

4,712,900

6.34

Custody Bank of Japan, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd.
(Trust account)
Sumitomo Mitsui Banking Corporation
BNYM AS AGT/CLTS 10 PERCENT
J.P. MORGAN BANK LUXEMBOURG S.A. 385576
Issei Ainoura
STATE STREET BANK WEST CLIENT - TREATY
505234
Custody Bank of Japan, Ltd. (Trust account 5)
SSBTC CLIENT OMNIBUS ACCOUNT

Takashi
MitaniManaging Executive
Officer, CTO, andGeneral Manager
of IT Service
Department,
Systems Division

Katsunari
Mukai

Stock
ownership
ratio (%)

Name of shareholder

3,848,100

5.17

2,501,600

3.36

1,193,183

1.60

1,085,400

1.46

1,000,200

1.34

885,1481.19

865,700

1.16

829,377

1.11

accounts, please contact the institution that administers special
accounts, Tokyo Securities Transfer Agent Co., Ltd.
Mailing address and phone number
2-8-4 Izumi, Suginami-ku, Tokyo 168-8522 Tokyo Securities
Transfer Agent Co., Ltd. Business Center 0120-49-7009 (toll-free)(Note) The stock ownership ratio is calculated using total shares outstanding
less treasury shares (5,076 shares).

Kazunari
TaguchiManaging
Executive Officer,
President and Chief
Executive Officer
of GMO Payment
Service, Inc.

(Note) At the annual meeting of shareholders held on December 20, 2015, it
was decided that the Board of Directors would be the decision-making
body for dividends of surplus, and that the record dates for these
dividends would be December 31, March 31, June 30, and September
30. As a result, we are able to distribute dividends of surplus on fouroccasions throughout the year.
However, in order to ensure the retained earnings that our businessstructure requires, our plan calls for the year-end dividend to be thesingle dividend of surplus distributed during the year.

Managing Executive
Officer, President of
GMO Epsilon, Inc.

GMO Payment Gateway, Inc.

Annual Report 27th Fiscal Year 2019.10.1–2020.9.30

28

29

GMO Payment Gateway, Inc.
URL: https://www.gmo-pg.com/en
Tokyo

FUKURAS Office (Head Office)	SHIBUYA FUKURAS 15F

1-2-3 Dogenzaka, Shibuya-ku, Tokyo, 150-0043, Japan
Phone: +81-3-3464-2740 Fax: +81-3-3464-2387
Humax Office	Humax Shibuya Bldg. 7F

1-14-6 Dogenzaka, Shibuya-ku, Tokyo, 150-0043, Japan
Phone: +81-3-3464-2740 Fax: +81-3-3464-2387

Osaka	Grand Front Osaka Tower 23F

3-1 Ofuka-cho, Kita-ku, Osaka, 530-0011, Japan

Phone: +81-6-7634-3070 Fax: +81-6-6374-0150
Kyushu	Tenjin Asahi Building 5F

3-4-7 Tenjin, Chuo-ku, Fukuoka, 810-0001, Japan

Phone: +81-92-688-9018 Fax: +81-92-688-9019

Printed in Japan