Supplementary Information

Supplementary information

Financial results briefing for the Q4 of FY2018

November 13, 2018 GMO Payment Gateway, Inc.

(3769: Tokyo Stock Exchange section - 1 ) h t t p s : / / c o r p . g m o - pg. c o m / e n / Three business segments Continuing 25% OP growth based on payment processing and peripheral businesses

(Q1-4 FY2018 actual)

Payment enhancement Sales OP business composition composition

Online advertising service 12% Asia payment enhancement business (MK)* and others 20％ 15%

56％ 85% 24％ Payment processing business Money Service Business (MSB) Online payment GMO payment after delivery Recurring payment Remittance Card-present payment* Transaction lending System development Early payment service Biz with banks/Processing Finance lease and others and others

*MK : MACROKIOSK GMO-FG: GMO Financial Gate, Inc.

More payment processing

Payment processing (Gross margin 85％) Money Service Payment Business processing Payment business enhancement business

Customer growth

Main Value-adding services for the expansion of the main business business

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3 Business outline - the role of our group Connecting merchants and payment companies on contract, payment data and money flow Consumer Merchant Our Company & Service Payment company Merchants=Our Customers 40+ Credit card 102,484 stores company (end of September 2018) EC Convenience store BtoB・BtoC・CtoC E-money Public money Cash on delivery NHK Online NTA, automobile tax Carrier payment Municipalities (e.g. Tokyo) PC Comprehensive payment service Online banking Subscription Money service business Wallet payment Video distribution Software, clothes Online advertising Account transfer (Demand generation) Service commerce Smartphone Digital goods Donation, travel, policy GMO Payment After Delivery

34,559 terminals Global payment Offline (end of September 2018) BitCoin payment Comprehensive payment service Apple Pay Physical store Money service business etc. Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4 Revenue structure of credit card payment

Revenues determined by merchant type/size

■Our four revenue types ■Revenues by merchant type/size

Initial (Initial revenue) ① Initial introduction fees Coefficient: Number of new merchants acquired Municipalities Revenue: Number of new merchants acquired × _Yen (at the time of introduction) Enterprise

① ② ③ Stock (Monthly revenue) Customer support and maintenance fee ② Coefficient: Number of merchants Revenue：Operating merchants × _Yen Middle-sized merchants Fee (Transaction processing revenue) ③ Fee based on transaction volume ① ② ③ ④ Coefficient: Number of payments processed Revenue：Number of payments processed × _Yen Startup

Spread (Merchant acquiring service revenue) Fee based on transaction value ④ ④ Coefficient: Amount of payments processed Revenue：Amount of payments processed × _%

Payment Payment Direct contract processing processing mainly for large companies and municipalities Our group

Credit card 2.8％ charge company

Sales proceed Merchant Payment company

0.5％ Spread (Merchant acquiring revenue) Representative 3.0％ charge 2.5％ charge contract mainly for SME’s but covers some large companies Sales proceed Our group Sales proceed

Credit card company 3.2％ charge

(Charge that is applied under direct Merchant contracts with payment company) Payment company

Target a balanced revenue growth by various initiatives （Million yen) J-GAAP IFRS 32,000

30,000

28,000

26,000 Spread 24,000

22,000

20,000

18,000

16,000

14,000 12,000 Fee 10,000

8,000

6,000 4,000 Stock 2,000 Initial 0 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 2019/9E

Listed 2008 2011 2013 2014 2015 2016 on the Launched Launched Launched Launched Renewed Launched TSE Early Online Payment Transaction Early business with Payment Advertising After Lending Payment banks ※MK ：MACROKIOSK Service Service Delivery Service GMO-FG and MK * GMO-FG：GMO Financial Gate Group became subsidiaries Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 7 Summary chart of Segments and Revenue models

Reporting in 3 Segments and 4 revenue models

■Segments ■Business model

Payment processing Payment processing（MK） Initial SSL Payment processing Services for banks/Processing （Initial revenue） System development business System development Payment processing (MK) GMO-FG Stock Services for banks/Processing (Monthly revenue) GMO payment after delivery Online advertising service Remittance service Payment processing (MK) Money service Transaction lending Fee GMO payment after delivery（Fee） business (Transaction Early payment service processing revenue) Remittance service Shipping service Finance lease Payment processing (MK) Online advertising service GMO payment after delivery (Spread) Spread Payment SSL enhancement (Merchant acquiring Transaction lending service revenue ) business Shipping service Early payment service MACRO KIOSK Finance lease

GMO-FG：GMO Financial Gate MK：MACRO KIOSK Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 8 Growth potential of Ecommerce market in Japan Lower Ecommerce ratio and higher cash payment ratio than other advanced countries ■Ecommerce ratio ■Card usage to private final consumption expenditure

（％） 16.2 Credit+Debit usage UK Credit card Debit card to private final 15.0 14.5 （2017） US usage rate usage rate consumption expenditure rate Japan 12.5 South Korea 74 ％ 19 ％ 93 ％ 11.3 10.4 10.0 9.2 8.8 UK 12 ％ 53 ％ 65 ％ 8.1 8.2 7.6 7.3 7.0 6.4 US 31 ％ 25 ％ 56 ％ 6.0 5.8 5.8 5.4 5.0 5.0 4.6 4.1 5.4 Australia 3.6 4.8 26 ％ 20 ％ 46 ％ 4.4 (2016) 3.7 3.1 2.8 Japan 2.5 17％ - 17 ％ 1.8 2.1 (2016)

0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *Rate=(Amount handled by CC or DC) / Private final consumption expenditure

References：METI. “FY2017 Building infrastructure for information- and service- oriented Japanese economy and society (Ecommerce market survey)” *Estimated by GMO-PG with reference from CPSS Red Book “Statistics on payment, clearing U.S. Bureau of the Census. “The 1st Quarter 2018 Retail E-Commerce Sales Report”; and settlement systems in the CPMI countries - Figures for 2017” Office for National Statistics “Retail Sales, May 2018” THE WORLD BANK ”Household final consumption expenditure (current USD)”

Cashless payment trends in Japan is our growth accelerator B2B B2C C2C

Enormous market Narrowly-defined Developing market potential B2C EC market ¥1 trillion ¥1,000 trillion ¥16.5 trillion EC ratio: 5.8% （growing 10% pa） Online Merchandising Flea market Payment via app internet, etc.

2017 2020E 2025E EC rate 5.8% 7-8% 15-20% Market size ¥16.5T ¥22-24T ¥45-50T

Service commerce B2B Public fund・utility fee Digital content ・Local tax ¥39 trillion Credit card ・National tax ¥62 trillion Offline payment (card-present) Flea market Payment with a Consumer spending reader at a physical store ¥300 trillion *References：METI. “FY2017 Building infrastructure for information- and service-oriented Japanese economy and society (Ecommerce market survey)”. Figures 2020 and after are our estimates. *MIC “Breakdown of national tax and local tax revenue (FY2018 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. 10 Payment processing: Public due & utility payments

We have been cultivating card payments in this field since the revision of the Local Autonomy Law in 2006

Sapporo Local ：Local Taxes (Automobile tax, light vehicle tax, city governments fixed assets tax, etc.) etc. Water bill, gas bill, hometown tax National tax credit card payment website

NHK ：National broadcasting subscription fee Credit card usage rate at the end of FY2017: 14.9%（yoy ＋1.2％）

Tokyo Expansion expected to continue Fukuoka Maintenance fee, cram school tuition fee city Aichi pref. parking fee, school meal charge, etc. Osaka pref./city

*Japan Broadcasting Corporation “Business Report for FY2017”

IoT services to go full scale to take in cashless & inbound demands ■Offline payment GMO Financial Gate delivers payment terminals for physical store payments

Embedded EMV * terminals Revised Installment Sales Act: Replacement demands for IC chip equipped terminals from the conventional magnetic ones

Tokyo Olympics: with PIN with PIN with PIN without PIN Cashless payment demands to surge as more *EMV: Unified standard for credit cards with IC chip determined by Visa and MasterCard foreign visitors come to Japan

Future target and potential

Vending machine Ticket vending Auto payment Office coffee Self check out, EV (Drink/food) machine machine machine charger, goods selling (Railway company) (Parking, hotel, hospital) machine, 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. 12 Payment processing: Ginko Pay Get more banks/companies onboard, connect them and be an infrastructure ■Ginko Pay A smartphone app system that allows for immediate payments such as direct debit targeting financial institutions Tokyu Corporation, Bank of Yokohama and GMO-PG to start the development of a cash out service through ticket vending

Resona Group machines at train stations (2019 spring-）

Japan Post Bank

Ginko Pay Bank of Fukuoka

Bank of Yokohama

Shinwa Bank

Financial service that only payment service providers can deliver

MSB-related assets Services Revenue types （Breakdown of operating and other receivables are as follows）

Remittance Efficient and secure refund and remittance Fee ー service processing for Ecommerce operator

Transaction Handles daily transaction Spread Short-term loans receivable lending

Early payment Improves cash flows by moving up Spread Advance payments-trade service the date of payment to merchant

Spread Payment after Pays sales proceed without waiting Accounts receivable-other delivery for deposit from consumer Fee

Provided by GMO Payment Service, our subsidiary

■GMO Payment After Delivery ■Market size of deferred payment Buyer can pay at post office or CVS after receiving goods Annual growth rate of 40% or more Payment terms is 2 weeks. Market size for 2017: ¥420 billion (expected) 4,20bil EC site （expected）

＋44.8％

②Credit check ③Goods delivery / receipt

⑤Deposit ①Order

④Mailing invoice/payment slip

Convenience store Post office, bank

⑥Payment Consumer

Payment services with 2weeks+

payment terms are also delivered. FY2013 FY2014 FY2015 FY2016 FY2017 ※ (source) “Current situation and future forecast of online payment service providers 2018” issued by Yano Research Institute Ltd.

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 15 Overseas strategies Target 50% overseas sales ratio by assisting JPN companies foray into Asian market and our investment strategies ■Investment target ■Payment processing business Asia: Top payment-related company US: Innovator Providing payment services to Japanese companies that entered Portfolios Asian market (Z.com Payment)

YoY ＋67％ Japan’s first Fintech fund targeting payment-related US startups in Asia (JPY 2 billion fund) Hong Kong

Taiwan Invest in Fintech-related or cutting-edge payment India Thailand service companies Vietnam

Philippines

Malaysia GDP Singapore Approx.¥250T 5-6% Growth Indonesia

FY2015 FY2016 FY2017 FY2018 Transaction value in Asia soaring

GMO-PG overseas bases

Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 16 Payment enhancement: Mobile payment and authentication Focus on investment in MACROKIOSK, acquiring of Asian banks and big companies Company name Macro Kiosk Berhad Strategy: Going after scale, then profit Location Malaysia and 11 other countries in Asia ①Payment-related business Set up sales teams in India and Europe Headcount 253 ②Business expansion in new countries Provide payment service, collaborating with 2C2P, our Financial results Revenue :4,563 million yen equity method affiliate ③Development of new products GMO-PG’s stake 70％ ④Entry into new areas by M&A Acquisition cost Approx. 1,121 million yen

Business SMS mobile solution (about 90％) model delivered to 95％ of Malaysian banks GUANGZHOU Carrier billing gateway (about 10％) MACAU TAICHUNG delivered to 50+ major carriers in 12 countries DUBAI HONG KONG BANGKOK MANILA HO CHI MINH KUALA LUMPUR SINGAPORE

JAKARTA

SYDNEY (as of the end of September 2018)

GMO Payment Gateway’s subsidiaries and equity affiliates

GMO Payment Gateway, Inc.

＜ Consolidated subsidiary＞ Multi payment（targets small-sized merchant） GMO Epsilon, Inc. （Financial results of FY2017 under JGAAP） Revenue：2,617 million yen, Operating profit：1,807 million yen (J-GAAP) GMO Medical Reservations Technology Co., Ltd.

Payment after delivery GMO Payment Service, Inc.

Card-present payment GMO Financial Gate, Inc. （As of end of Sep. 2017）65.0％ stake

Global Card System

Overseas GMO-Z.COM PAYMENT GATEWAY PTE. LTD. （Singapore）

GMO-Z.com PAYMENT GATEWAY HONG KONG LIMITED （Headquartered in Hong Kong and a branch in Taiwan）

GMO Z COM PAYMENT GATEWAY MALAYSIA SDN.BHD. （Malaysia）

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

Overseas Macro Kiosk Berhad （As of end of Sep. 2017）70.0％ stake

< Equity method affiliate > Multiple payment SMBC GMO PAYMENT （As of end of Sep. 2017）49.0％ stake

Overseas 2C2P Pte. Ltd. （As of end of Sep. 2017）32.0％ stake

■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 ■Capital stock 4,712 million yen ■Major shareholders GMO Internet, Inc., Sumitomo Mitsui Banking Corporation, Issei Ainoura ,etc ■Management team Chairman & Director Masatoshi Kumagai President & Chief Executive Officer Issei Ainoura Director, Executive Vice President Ryu Muramatsu Director, Executive Vice President Satoru Isozaki Senior Managing Director Yuichi Hisada Director Tomoyuki Murakami Director Shinichi Sugiyama Director Yusuke Arai Director Masashi Yasuda Director Masaru Yoshioka Director Takehito Kaneko Senior executive officer Takeshi Yoshii Senior executive officer Takashi Mitani Executive officer Katsunari Mukai Executive officer Yoshikazu Yanagishima Executive officer Kazunari Taguchi Executive officer Tatsuhito Muramatsu Executive officer Kiyonobu Inayama Executive officer Shingo Ito Executive officer Yoshinori Inoguchi Executive officer Hirofumi Tozawa Executive officer Yasunori Hatada External Director Masaya Onagi External Director Akio Sato Full-time auditor Yasuhiro Kanda Auditor Takashi Iinuma External Auditor Kazutaka Yoshida External Auditor Kazuhiko Okamoto ■Auditor Deloitte Touche Tohmatsu LLC ■Consolidated subsidiaries GMO Epsilon, Inc., GMO Payment Service, Inc., GMO Financial Gate, Inc., GMO-Z.com Payment Gateway Pte. Ltd. (Singapore), Macro Kiosk Berhad, etc. ■Equity affiliates SMBC GMO Payment, Inc., 2C2P Pte. Ltd., etc. （As of end of September 2018） Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 19 Appendix

Problems with online credit card payment in the early days of Ecommerce Payment Consumer Merchant company ①order taking Authorization

（get approval number） Credit Credit card company

Large volume of sales slips network

②Enter each ③Make sales report to each into the credit card company ④Mail sales report CAT terminal （sales processing） to each credit card company

Issues for merchants  Order entry into CAT terminal and our system ⑤Check whether payment has been received  Sorting documents for each credit card company Payment  Insufficient check on incoming payment  Human error

Payment processing service adds operational efficiency to credit card payment Payment Payment Consumer Merchants company Processing

①Order taking company Credit Credit card company Credit・sales

Update card data Network

Real-time credit decision Send Sales processing sales data

②Check whether payment has been Payment received (data collation)

In the early days of Ecommerce, credit card payment was processed offline between merchant and credit card company, causing burden on both sides. Payment processing companies were established to eliminate the burden on both parties.