Billing System Corporation

The Group is registered as a Business Operator Entering into Contracts for Handling Credit Card Numbers, etc. under the amended Installment Sales Act, as an Electronic Payment Services Provider under the amended Banking Act, and as a Prepaid Payment Instrument Issuer under the Payment Services Act, and conducts its business under each of these regulatory frameworks. If future legal amendments restrict services, or if registration is revoked for any reason, this could have a material impact on the Payment Support Business as a whole. The Company maintains registration under each relevant law and continuously monitors regulatory developments.

The Company holds personal information in the course of providing payment intermediary services, and the volume handled is expected to increase as the business expands. If personal information were to be leaked due to unauthorized external access or unforeseen circumstances, this could result in loss of trust, customer attrition, damages claims, and other consequences, potentially having a significant impact on the business and financial results. As countermeasures, the Company has established information security-related regulations, set up a Personal Information Protection Committee, conducted training for officers and employees, and obtained Privacy Mark certification.

The Group operates payment systems connected via networks to financial institutions, convenience stores, credit card companies, and others, and there is a risk that services could be suspended due to a system failure at the Company or a connected party, or due to unauthorized external intrusion. In the event of a failure, this would directly affect business continuity and could lead to a loss of trust among customers and member merchants. The Company seeks to prevent and swiftly respond to such risks through system redundancy, regular maintenance, operational monitoring, and the establishment of an in-house CSIRT.

Revenue from the Quick Deposit Service tends to increase in transaction volume as market fluctuations in stocks, foreign exchange, and other markets widen; if the range of market fluctuation narrows and transaction volume declines, this could affect business performance. In addition, there is a risk that growth in transaction volume could slow due to strengthened security measures for online securities trading, prompted by a sharp rise in unauthorized use of securities accounts. As these external environmental changes are factors outside the Group's control, continuous monitoring is required.

Barriers to entry are not necessarily high in payment collection agency services such as credit card and convenience store payment for e-commerce sites, and competition among existing payment agency operators is intensifying. If intensified competition forces the Company into low-price competition, profitability could deteriorate, affecting business performance. On the other hand, the Company recognizes that the Quick Deposit Service has high barriers to entry, as it requires specialized know-how in system integration with financial institutions.

The pace of technological innovation in the payment support services industry is extremely rapid, and there is a risk that existing services such as the Payment Collection Agency Service, Quick Deposit Service, smartphone multi-payment services, and cashless payment terminals could become significantly obsolete due to the emergence of entirely new payment schemes. If such obsolescence progresses, it could affect business performance through customer attrition and reduced revenue. The Group continues to develop new services, including PayB, but a delayed response to technological change could lead to a decline in competitiveness.

Cashless payment terminals are imported from China, and procurement payments are made in US dollars, so a weaker yen results in higher procurement costs when converted into yen. In addition, an appreciation of the Chinese yuan could also raise procurement costs; if such increases cannot be appropriately passed on to selling prices, this could affect business performance. While the Company adjusts its position through advance currency conversion during periods of yen appreciation to secure more favorable rates than assumed, there are limits to its ability to respond if the yen depreciates more than expected.

The Company offers WeChat Pay and Alipay+ services for Chinese travelers, adopting a scheme in which payment proceeds within Japan are received from a contracted Chinese company and then remitted to member merchants. If a pandemic, changes in Chinese laws or economic conditions, or social and political turmoil due to war, terrorism, or conflict were to occur, this could result in a sharp decline in users or a suspension of remittances, affecting business performance. If there were a recurrence of a sharp decline in inbound visitors to Japan, as seen during the COVID-19 pandemic, there is a risk that revenue from this service could decline significantly.

As of December 31, 2025, the number of officers and employees stood at 109, a small organization, and unexpected resignations could significantly change the composition of the workforce. Securing sales personnel and system development staff has become an urgent priority as the business expands; if the Company is unable to secure, develop, and utilize the necessary talent, this could affect business performance through delays in service development and reduced customer support capabilities. The Company is working to strengthen its recruitment function and provide post-hire training to raise the overall level of the organization.

The Group has a business alliance with NTT DATA Corporation, to which it outsources part of the construction and operation of its payment collection systems. Although the Company recognizes that NTT DATA's systems have a high degree of reliability, if a failure were to occur due to unforeseen circumstances, this could prevent the Group's operations from functioning normally, potentially affecting its business and financial results. As this is an area with a high degree of dependence on the outsourcing partner, establishing alternative measures and coordination arrangements in the event of a failure is an important challenge.