1
III.
“Credit card and Installment Finance Business”1. Scope of the Survey
The credit card and installment finance business covered in this survey are (1) in case of the credit card business, enterprises which issue credit cards (or tickets) of their own and involve in credit guarantee when consumers (members) purchase products or services at member stores, payments for purchased goods or services for consumers and demand for payment or collection to/from members, while (2) in the installment finance business, enterprises which provide fund to the stores by collateralizing the receivables of the stores from installment sales and so on or purchasing such receivables.
However, enterprises which engage in the following businesses are not covered in this survey. 1) Enterprises which engage in part of the business only such as collection of receivables.
2) Enterprises which exclusively engage in mail-order sale, home-call sales and insurance guarantee.
3) Private financial institutions 4) Consumer loan companies 5) Factoring companies
2. Explanation of the Items in the Statistical Table
(1) The classification by affiliate of enterprise as follows:
1) “Bank and other financial companies”: affiliates of commercial banks, trust banks, securities companies, insurance companies, non-life insurance companies, etc.
2) “Credit loan company and its related companies”: third party credit that is registered based on the Installment Sales Act and those that do not fall on other classifications.
3) “Small-to-middle retail trade group: a group which is a member of a special shop association or a store association.
4) “Department store/volume retailer, distribution-related companies”: department stores,
volume retailers, and affiliates/business group companies of distributors.
5) “Installment finance companies”: enterprises which mainly engage in the installment finance business.
6) “Others”: enterprises which do not fall on those as mentioned above such as affiliates of
electronics companies or oil distributors.
7) “Ticket issuing companies”: companies included in ”others” and those which exclusively
engage in issuing taxi tickets.
(2) The number of employees: as on November 1, 2008.
2
employees in charge of the credit card and installment finance business counted by department. A The “management and sales department” generally refers to those in charge of the “general
affairs, planning, human resources, accounting, budget, or sales.
B The “customer/member shop management department” refers to those in charge of data management of information on members and member shops, etc.
C The “screening department” refers to those in charge of screening of information on application for a new credit card member, determining whether a card should be issued or not or the maximum limits for a credit card, etc.
D “Others” refers to those in charge of departments other than as mentioned above.
2) “Of that number, persons who are dispatched from business establishments under separate
management” means a person who is assigned/dispatched to the business establishment from a business establishment under separate management, or a person who works as subcontractors (accepted) among the employees by department as mentioned above.
(3) The annual sales (handling volume) are the handling volume of the entire business
establishments (credit given to the clients and the income of the commissions thereof and others) and sales, and handling volume and sales by business (the “credit card and installment finance business” and “others”) obtained during one year from November 1, 2007 to October 31, 2008 or one year before the closing date closest to the survey date. This is not profit or income, but the sales before business expenses are deducted (business revenue) (consumer tax included). Consequently, the relevant annual sales (annual handling volume) do not include incomes from management of assets and disposal of assets which are not conducted as business transactions. (4) The classification by kind of business is as follows:
<Credit card business, installment finance business>
1) “Sales credit”: a handling volume of products purchased and services provided when card
members used the company’s proper cards Note 1
2) “Consumer loan”: a handling volume (the sum of the loan amount, commissions and interest)
by the cash loan business using the company’s proper cards to card members.
3) “Installment finance”: a handling volume from the business that provides funds to the stores by collateralizing or purchasing the receivables of the stores related to installment sales, etc. However, a handling volume from meditation for each commodity is included in “sales credit” of “others”.
<Others>
(Finance/insurance business)
1) “Sales credit”: a handling volume from sales credit that does not depend on credit cards
(meditation for each commodity, tie-up loan, tie-up loan sales, etc.)
2) “Consumer finance”: a handling volume (the sum of loan, commissions and interest) that does not depend on credit cards (cards exclusively for loan, etc.).
3
not depend on credit cards excluding the “sales credit”, and the “consumer finance business” as mentioned above.
4) “Wholesale/retail trade business”: the sales obtained by deducting the handling volume of the “sales credit” mentioned above from sales of products at retail shops such as agents/brokers, general wholesalers, department stores/super markets and special stores.
5) “Others”: the sales of businesses other than as mentioned above (goods rental and leasing, etc.). Note: The company’s proper card is a credit card which a credit card company receives an
application from a client (including a case through a tie-up company), conducts a screening thereof and issues. It is formed so that a credit card company pays for a product purchased by a card member and requests the card member to pay back later. The so-called tie-up card is also used in such a method.
(5) “Balance of handling volume”: the balance of handling volume (receivables) in “sales credit”, “consumer finance” and ”installment finance” as of November 1, 2008 or at the closing day closest to the survey date.
(6) Operating income: an operating income (“admission and member fees”, “commission
revenue of the sales credit business from members”, “operating income on the consumer
loan from member stores”, “commission revenue from member stores”) of the credit card
business of the entire enterprises obtained during one year from November 1, 2007 to October 31, 2008 or one year before the closing date before the survey date and an operating income of the installment finance business. The income based on the revolving methodNote 2 is added as a figure which comprises the “commission revenue of the sales credit business from members” and the “operating income on the consumer loan from member stores”.
Note2: The revolving method refers to a method in which an amount gained by the computation based on the previously defined method on the bases of the sum of amounts of products/services is received at every pre-fixed periods.
(7) The member stores and the annual sales (annual handling volume) by industry are as
follows:
<The number of member stores by industry>
The industry-basis breakdown of shops in which credit cards can be used due to the efforts of their own of the company that engages in the credit card business to open new accounts and conclude direct contracts.
<The annual sales (handling volume) by industry>
The breakdown by industry of the annual handling volume of the sales credit business (to purchase products and provide services using credit cards) with a company proper card.
<Industry classification>
1) “Department, general super market”: retail establishments which sell various products
covering cloths, foods and housing, whose handling products are difficult to judge which ones are their main line, and which have more than 50 employees at any time.
4
and housing, and are retail establishments other than “department, general super market”.
3) “Restaurant”: business establishments where people eat and drink mainly on the site such as buffets, restaurants, soba/noodle shops, sushi shops, coffee shops, fancy Japanese restaurants, bars, cabarets, night clubs, bars and beer halls, etc.
4) “Hotel”: business establishments that provide lodging and dining for a short period.
5) “Others”: business establishments of entertainment business and so on other than as mentioned above, including foreign establishments.
(8) The number of credit members (contracts): the number of the effective contracts of the
company’s proper cards which are issued based on the credit card membership contracts concluded, and the numbers on corporation or individual member basis excluding the number of family member cards issued which are incidental to contracted members from the number of issuance.
1) “Total number of members”: the total number of members as of November 1, 2008 or the
closing date closest to the survey date.
2) “Of that number, the number of members who joined during the past year”: the number of
persons who newly concluded contracts of the company’s proper cards during one year between November 1, 2007 to October 31, 2008, or one year before the closing date closest to the survey date.
3) “The number of members who quitted the membership during the past year”: the number of
persons who cancelled the credit card contract during one year between November 1, 2007 to October 31, 2008, or one year before the closing date closest to the survey date. However, the cancellation of family member cards of the current members only is excluded.
(9) “The number of the kind of credit cards issued and the issued number by the annual membership fee”: the kind of credit cards and the number of credit cards issued for individual members (including family members) by the annual membership fee classification (free of chargeNote3, less than ¥5,000 yen, ¥5,000 yen re more) as of November 1, 2008 or on the closing day which is closest to the survey date.
Note 3: The cards of free annual fees refers to credit cards which do not require membership fees for an indefinite period excluding those which are free for the first year only or become free depending on the usage situation.
(10) The number of credit cards issued: the number of the company’s proper cards effectively issued as of November 1, 2008 or on the closing day closest to the survey date, the numbers of individual member (including family members) cards and corporation member cards excluding those of the members who quitted the membership and those which have not been updated after the expiry date.
1) “Of that number, the number of the tie-up cards issued”: the number of the effectively issued tie-up cards collaborated with other commercial firms among the company’s proper cards.
2) “Of that number, IC cards”: the number of IC cards (credit cards which have installed IC
(integrated circuit tip) and its ratio to the number of the company’s proper cards issued.
5
cards.
(12) Annual operating cost: the annual sum of “total salary paid”, “sub-contracting cost”, “advertising cost”, “depreciation and amortization”, “rental cost” (“land/buildings”, “machinery/equipment”) and “other operating costs” of the entire enterprises during one year from November 1, 2007 and October 31, 2008, or one year before the closing day nearest to the survey date.
1) Total salary paid: the sum of the annual salary paid (periodically or specially paid money such as base salary, bonus and benefits) and retirement allowance (including taxes).
It includes compensation and salary of executives paid from operating cost, pay for part-time employees and others or temporary and daily employees, and pay for those who are assigned or dispatched (who work at business establishments under separate management such as other companies) to whom the respective business establishment mainly pays)
2) “Sub-contracting cost”: costs involved in giving out business either partially or totally to others in the form of assignment, undertaking, and so on.
3) “Depreciation and amortization”: an amount for write-off of buildings,
machine/facilities/equipment and others which cost ¥100,000 or more
4) “Rental cost”: the sum of cost incurred from the rental of “land and buildings” and “machinery and equipment” to engage in a business.
A “Land and buildings”: the total annual rental cost in case of engaging in a business by
borrowing “land and buildings.” Common service charges such as administrative expenses and monthly parking fees are included in the cost of “land and buildings”.
B “Machinery and equipment”: the total annual rental cost of “information related equipment” such as computers and personal computers, “transportation equipment” such as automobiles, “office equipment” such as copying machines, and are divided into “information and communication electronics equipment” and “others”.
• “Information and communication electronics equipment”: the total rental cost of wired communication equipment, radio communication equipment, broadcasting equipment, automatic exchange equipment, facsimile, computer, terminals, auxiliaries, computer equipment, personal computer, etc.
• “Others”: the total rental cost of machine and equipment other than information and communication electronics equipment including “transportation equipment” such as automobiles, “office equipment” such as copying machines.
5) “Provision for loan loss reserve” : an item of the “credit card and installment finance business” and the estimated loan loss amounts of receivables, loan receivables, etc.
6) “Financial cost”: an item of the “credit card and installment finance business” and expenses such as interest payable, discounts on note payable, etc.
7) “Other operating cost”: all operating costs as listed below excluding those as mentioned above: Packing and shipping cost, payment commission, sales commission, travel expense, transportation expense, expenses for perishable tools and equipment and fixtures, business entertainment expense, repair cost, tax and duties, donation, welfare expense, membership fees, conference expense, communication expense, utility bills, labor cost of temporary employees, rental cost of the items other than land/buildings and machinery/equipment, etc.
6
3. Codes and Note
(1) The codes used in the “Summary” and statistical tables in this survey report are as follows: 1) “-” means “n/a”, “…” means “unknown (not surveyed),” “0” means “ a rounded off number,”
and “” means a “minus figure”.
2) “x” means a numerical figure concerning one or two business establishments which is kept confidential in order to keep the secret of each respondent. In addition, in the case where the figure is related to three or more business establishment, ”x” is used in the same way, if the figure of the first or second business establishment can be identified from the context.
(2) As the published numbers are rounded off, the sum of the each figure in the breakdown and the total number may be different.
