MANAGEMENT STRATEGY

Payment and Finance Business Strategy

Expand Financial Service Offerings
Centering on Payment
Environment around the Payment andFinance Business
The environment around the Payment and Finance Business is
rapidly changing due to the COVID-19 pandemic, such aschanges in consumption behavior, expansion of e-commerce,
the progress of cashless payments, advanced communication
through smartphones (app), and the emergence of newtechnology players. In this situation, in the Medium-term
Business Plan, the Group aims to increase customers in local
areas under the Developer Strategy, increase customer touchpoints under the Real×Digital Strategy, and acquire new
affluent customers under the Prime Life Strategy. We believe
we will be able to greatly grow the Payment and FinanceBusiness by building relations with customers through payment
and provide financial services using customer data.

Promotion of merchant acquiring business

Use of the strengths of <the ability to attract customers>and <transaction volume>
Payment
Credit (deferred payment)

Offering ofpayment options(for consumers)

Debit (deferred payment)

QIRA
Point

Prepaid (advance payment)

Offering ofreceipt options(for stores)

Merchant acquiring business (for stores)

JFR Card concluded license agreements with VISA andMastercard in July 2019 and started to provide merchantacquiring services in February 2021. Currently, we are working tobring together the merchant acquiring services of the Group’sfacilities including Daimaru Matsuzakaya Department Stores,PARCO, and GINZA SIX. We are also actively working to acquire
merchants outside the Group in the areas in which the Group’sstores operate. For merchants, we will deliver value such as sales
increase, the acquisition of new customers, and the transfer of
the Group’s customers. For customers, we will gain recognition
as the provider of the “best payment and financial services in thearea.” By doing so, we will aim to build an economic zone thatconnects the Group’s customers and merchants in the area.

Timely provision of financial services

Kyoto
Karasuma
Tokyo
Ueno
Ginza

HakataTenjinOsaka
Shinsaibashi

NagoyaSakae

Insurance
Financing

Expansion of finance businessWe will provide various financial services using payment data bybuilding relations with customers centering on payment.
Particularly, we will focus on financing and insurance, whichhave a high affinity for the Group’s customers and businessmodels and are highly profitable.

Investment management

Card business

Merchant acquiring businessInsurance business

Finance business

Learn
Support

Issued new cards
In January 2021,Daimaru Matsuzakaya
Card was completelyrenewed. We introduced a new point program QIRA Point inaddition to existing Daimaru and Matsuzakaya points. It
allows the cardholders to earn points not only in Daimaru
and Matsuzakaya stores but also through all credit card
payments and to exchange earned points for various
affiliated points, products, and special experiences as well
as Daimaru and Matsuzakaya points. We also changed theirdesign and adopted a portrait style for the first time in theindustry. They are also equipped with Visa’s touch payment
function to improve customer convenience.
The share of the customers aged 49 or under whom wetarget increased by 3.5 points. Transaction volume peraccount also increased by 5.4% compared to fiscal 2019
before COVID-19 (fiscal 2021 basis). Going forward, we will
strive to increase utilization rate and transaction volume byraising awareness, understanding, and value of QIRA Point.

INTEGRATED REPORT 2022

Kobe
Motomachi

Sapporo

VISA, Mastercard, UnionPay,Suica, Alipay, WeChat, etc.

Asset management

54

Key area

Increase

Borrow

Platform for lifestyle
proposals
FamilyResidence

Money plan

HealthSave

DonateWe will meet customer needs for health and money atvarious life stages including school attendance, employment,
marriage, child raising, and second life in the era of 100-year lifeand support them. In addition to improving convenience throughthe revolving and installment payment options of Daimaru
Matsuzakaya Card, we entered into a business alliance with Orix
Credit Corporation in February 2021 to launch QIRA Loan
-BRIGHT LIFE-, and in August 2021, we entered into a businessalliance with Famitra Inc. to serve as an agency for its family
trust services. Going forward, we will work to provide newfinancial services that support asset building for the future.
With respect to insurance, commission income is steadily
increasing due to the integration of insurance agency businessin the Group. Going forward, we will aim to increase revenue
by developing new corporate clients while strengthening
approach to gaisho customers and the holders of Daimaru
Matsuzakaya Card.

PrepareLifestyle

ManageProtect

Resolve

Maintain

For medium-term growth
The Payment and Finance Business recovered operating profit
to ¥1.9 billion in fiscal 2021 and sees a prospect of increasing
operating profit to the level of ¥3.0 billion in the current Mediumterm Business Plan. Going forward, we will build a system thatcan greatly contribute to the growth and revenue of the Groupby strengthening the Group’s customer base, expanding ourmerchant network mainly in the Group’s key areas, anddeveloping and expanding financial services using data.

INTEGRATED REPORT 202255