Message from Key Person in FinTech Business
The Japanese credit card market is still developing. It is expected that the installation of infrastructure leading up to the Tokyo 2020 Olympic and Paralympic Games will stimulate average annual growth of 8% in this market and that annual transaction amounts will increase from the current ¥50 trillion to more than ¥70 trillion. The growth of EPOS card transactions is particularly strong, exceeding the industry average, and we will target further growth in the future (see Figure 1).
The number of cardholders of EPOS Card was roughly one-fourth that of other retail-type credit card companies, standing at only 6.1 million on March 31, 2016. Similarly, while EPOS card transactions have risen above ¥1 trillion, those of other companies’ cards amount to more than ¥4 trillion. Nonetheless, the amount of operating income per active EPOS card is exceptionally high in comparison to rival cards, making for impressive profit margins (see Figure 2).
In consideration of the growth potential of the credit card market and the strengths of EPOS cards, MARUI GROUP embarked on a new endeavor in its credit card operations by undertaking the transition to the FinTech business in April 2016. We have thus redefined, and effectively expanded, the target scope of our business with the aim of realizing ongoing growth. We will continue to evolve our services to make them easy to use by a wider range of customers, regardless of the differences in their income level or the region in which they live. To customers, the appeal of EPOS cards can be found in the ever-expanding range of unique services and benefits that make customers feel they made the right decision in using their card, provide peace of mind, and offer small joys. Recently, we have been collaborating with anime and video game companies to step up initiatives for expanding the range of cardholders among the younger generation, our primary target demographic. From a business perspective, we will strive to increase operating income and boost capital efficiency. These goals will be accomplished in part by developing a highly unique business through further coordination with other Group companies, such as M & C SYSTEMS, which is lending its strengths in system development. In addition, we will leverage our customer assets and expertise to expand our financial service operations (see Figure 3).
Figure 1: Card Shopping Transaction Trends and Future Credit Card Market
Source: Consumer Credit Statistics from Japan (FY2015), Japan Consumer Credit Association for data from the fiscal years ended March 31, 2012–2016, preliminary calculation by MARUI GROUP for the fiscal year ending March 31, 2021
Figure 2: Comparison with Competitors (Figures from FY2016, segment based; Source: MARUI GROUP)
Figure 3: FinTech Growth Strategies