PAY.JP’s functionality, adding financial capabilities alongside standard payment processing updates has been a major milestone. It’s rare for a PSP in Japan to expand into in-house financial services, and we were able to take the lead in this area. While the PAY.JP business drove top-line growth, the YELL BANK business contributed to profits over the year. It’s well known that we significantly expanded the existing YELL BANK service for shops using BASE. In addition to that, we have developed a comprehensive product lineup, including PoC, that contributes in many ways to cash flow improvements for the long-tail segment. Factoring alone remains a niche with limited target shops, but we’re working on product additions and updates to expand its user base. Rather than assembling a full lineup like a bank, we’re adding products that seem likely to contribute significantly to the long tail and SMEs. With YELL BANK alone, we can only support the deposit side for shops, which is insu cient; however, by expanding to withdrawal-side products, we believe our overall financial capabilities have increased. In 2024, we launched Pay ID 3-installment Post Pay, a BNPL installment payment service for Pay ID. While this business is in an earlier phase compared to our other products, we’re steadily moving toward our Group goal of building a “two-sided network” of merchants and purchasers to provide in-house payment services. As standard functions for payment products in the Japanese market, we need to support not only convenience store payments but also account transfers, and not just lump-sum payments (monthly clearance) but also installment payments. With these releases, we now o er the same functionality as credit cards, the most widely used payment method in Japan. In this sense, Pay ID Post Pay has finally become a full-fledged payment service this year. Furthermore, we’re preparing for shopping app monetization and associated product and perception improvements. For the BASE business, I believe the growth factor was that the value proposition of our product exceeded market expectations. For the PAY.JP business, even as payment processing industry players, including US companies, increasingly target enterprises, our consistent niche strategy of focusing on long-tail merchants has proven successful. Over the past several years, we’ve acquired merchants with significant future growth potential, and the robust growth of these promising merchants has greatly enhanced PAY.JP’s business growth. We will continue to aim for maximizing value creation through (1) expanding our target customers and (2) enhancing added value. Primarily, BASE and PAY.JP will drive (1), while YELL BANK and Pay ID will lead (2). The BASE business will pursue GMV growth while expanding the added value of its products and introducing new add-on features. Monetizing the Pay ID App will also help improve the take rate. To achieve this, we’ll continue to enhance our products so that shops can experience the customer acquisition benefits of the app. The PAY.JP business will continue to pursue growth in GMV while also seeking synergies across the Group in financial and other areas. Additionally, with METI leading e orts to strengthen countermeasures against fraudulent payments, we will also emphasize fraud detection. Furthermore, as our target users have broadened, increasing the diversity of payment method needs, we’re considering expanding beyond credit cards. We’re also promoting product enhancements and marketing strategies to improve new merchant acquisition. By adopting alternative approaches to bolster the PAY.JP business, distinct from the brand awareness strategies that we implemented for the BASE business until a few years ago, we’re now gradually starting to see results. For the YELL BANK business, we will enhance our e orts for product lineup expansion and external deployment. While YELL BANK has experienced strong growth recently, it remains a niche service within the broader financial services sector, with a limited user base. Therefore, when deploying externally, we aim to o er comprehensive financial services for the long tail and SMEs, addressing wider user needs. External deployment will require some time, but we plan to move forward steadily. From the business progress of PAY.JP YELL BANK, launched in 2024, we have learned that adjusting services according to merchant sales scale is essential. We will modify service design, rates, and other factors to suit the characteristics of merchants on each platform. For the want.jp business, we’ll proceed with development on schedule to provide features jointly developed with the BASE business. We expect to deliver these several years earlier than if the BASE business proceeded alone. We aim to leverage want.jp’s expertise in international shipping and platform deployment in various countries for shops that use BASE as well. Balancing growth and profitability is not easy, but group management makes this an attainable goal. It’s crucial to have multiple businesses in di erent phases, each growing steadily. As the new COO, I believe I’m expected to consolidate business decision-making and accelerate execution, so I’ll focus on these areas. Furthermore, I will regain momentum by refocusing on our mission. By leveraging synergies with Estore and other initiatives, we’ll progressively address the gaps in our value creation strategy diagram and build a sustainable growth foundation. We look forward to your continued support and expectations. To Our Stakeholders, as the New COO Reasons for Above-Market Growth Medium- to Long-term Management Policy and Fiscal Year Ending December 2025 Policy 11 Business & Strategy Governance Sustainability Facts & Data Overview
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