Sumitomo Mitsui Card Company, Limited. (President: Yukihiko Onishi, "SMCC"), GMO Payment Gateway, Inc. (President & Chief Executive Officer: Issei Ainoura, "GMO-PG") and GMO Payment Service (President & Chief Executive Officer: Katsunari Mukai, "GMO-PS") announces the signing of a Memorandum of Understanding for the business alliance ("the Alliance") regarding Buy Now Pay Later ("BNPL") on May 23, 2022.

BNPL, as the name implies, refers to making the payment after the goods are received. It has gained much traction as a payment method that supplements credit card with its growing popularity with users overseas. Use of this payment method is also expanding in Japan, where it is referred to as deferred payment ('atobarai' in Japanese), especially for online purchases and among the younger generation, for its ease-of-use of completing the payment without the need to input credit card details as well as being able to make the payment after receiving the goods.

Both SMCC and GMO-PG have undertaken several initiatives to resolve issues faced by business operators and consumers/users in the domestic cashless market, such as the launch of "stera" payment platform. Given the expanding BNPL market in Japan, the three companies of SMCC, GMO-PG and GMO-PS (a consolidated subsidiary of GMO-PG) have hereby reached an agreement to establish a joint BNPL brand to provide a novel service with the aim to become the No. 1 BNPL service provider.

SMCC aims to establish a commanding position as a comprehensive payment provider that goes beyond the credit card market, by offering one-stop multi-payment method services to business operators by newly entering the BNPL market. GMO-PG and GMO-PS offers the deferred payment service of "GMO Payment After Delivery" (by GMO-PS since 2013 onwards) and "Condo Pay byGMO" (by GMO-PG since 2020 onwards). Together with SMCC and by leveraging our know-how and track record, we hereby announce our intention to launch a new service ("the new service") to further expand the BNPL service line-up.

SMCC, GMO-PG and GMO-PS expects to begin operation of the new service around Spring 2023.

The new service aims to provide innovative and novel BNPL service to business operators and users, by building on GMO-PG group's know-how of its existing deferred payment service and systems and infusing SMCC's know-how in credit assessment and installment payments garnered over more than 50 years in the credit card business.

The deferred payment service in Japan mainly applies to E-Commerce online shopping where the payment is completed after assessment of the creditworthiness of each transaction, based on the frequency of purchase and type of merchandise. Payment by the consumer/user is usually made after receiving the goods, paid at places such as convenience store in a single installment. The new service envisaged by the three companies will not only provide the deferred payment but also provide long-term installment payments. In addition, the new service will also provide service for offline market by utilizing the stera^※1 platform, provided by SMCC and GMO-PG, installed at the merchant's stores.

Furthermore, SMCC also plans to offer the new service by linking it to Vpass, a members-only proprietary app for their credit card payment users. Furthermore, consideration is underway for digital convergence services with Individual Credit Purchase business.

The three companies will continue to rigorously deliberate on the concrete details of the service, including the service's moniker, and will promptly announce the particulars upon finalizing the service details.

※１ "stera" is a payment platform for business operators that helps resolve the various challenges in cashless implementation. stera was developed by SMCC in conjunction with GMO-PG, GMO Financial Gate, Inc. and Visa.

SMCC, GMO-PG and GMO-PS will continue our endeavors to advance cashless migration by providing user-friendly and secure payment services.