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Message from Key Person in FinTech Segment

August 2018

We are committed to growing further through expansions to our base of premium cardholders and new collaboration businesses.
Yoshinori Saito Senior Executive Officer
President and Representative Director,
Epos Card Co., Ltd.

In the fiscal year ended March 31, 2018, the FinTech segment achieved impressive performance on the back of growth in card shopping transactions through EPOS cards, leading the segment to post higher operating income for the sixth consecutive year and to achieve its target for ROIC. A particularly notable accomplishment was the continued strong growth of transactions by holders of premium cards, namely our Platinum and Gold cards. These transactions exceeded ¥1 trillion for the first time in the year under review, once again driving overall growth.

Previously, the number of new cards issued at Marui and Modi stores had been chronically low as a result of the transition to shopping centers and fixed-term rental contracts. By stepping up coordination between stores and cards in our recruitment measures, we have realized steady recovery in the number of card applications. At the same time, the number of external facilities with which we collaborate reached 22 on August 31, 2018. Our aggressive development of collaboration cards with anime and other content creators has translated to smooth progress toward achieving our goal of issuing 800,000 new cards a year. Going forward, we will accelerate recruitment measures associated with the Internet and services to increase application numbers. In the fiscal year ending March 31, 2019, we commenced collaboration with GMO Payment Gateway, Japan’s largest e-commerce payment proxy company, and ABLE. INC., a major rental housing brokerage and management company. Meanwhile, we are working to address card cancellations, a major factor behind the sluggish growth of cardholders, by encouraging cardholders to upgrade to Gold cards to increase renewal rates. We thus aim to quickly achieve new application numbers of more than 1 million.

MARUI GROUP is making steady progress toward realizing its vision for financial inclusion. In August 2018, we launched our securities business to expand our lineup of financial services to address the previously neglected needs of EPOS cardholders pertaining to asset building. We are also preparing for the rapid changes projected in the payment service market, which will include the advent of QR code payments, a payment method expected to spread as cashless payments become more prominent.

Furthermore, we are investing in our system infrastructure to automate credit card application and debt collection procedures, which are expected to increase together with transaction volumes, in order to improve productivity. Profit growth in our credit card services operations has led to higher operating receivables. We are working to combat this trend by boosting service revenues that do not require additional assets, such as revenues from rent guarantees, to heighten profitability and capital efficiency.

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