Chargeback Risk Associated with the Principal Member Agreement
First written in FY2016. 3 of 7 entries say "Worsened", first in FY2019. Latest entry: FY2025.
No other company in this theme has enough history to compare yet.
- FY2025WorsenedAnnual report
「Fiscal year under review 721,200」
The chargeback provision increased from ¥559.027 million in the previous fiscal year to ¥721.2 million. Provisioning against the recovery risk associated with principal merchant agreements has increased. - FY2024WorsenedAnnual report
「Fiscal year under review 559,027」
The chargeback provision balance increased from ¥320.963 million in the previous fiscal year to ¥559.027 million. The provision set aside for these risks has increased. - FY2022MitigatedAnnual report
「When contracting with a merchant, our Group conducts the credit card company's screening process, verifies that the merchant's website exists, checks the website's disclosures required under the Act on Specified Commercial Transactions, and conducts ongoing credit reviews after the contract is signed. We also manage outstanding receivables each month.」
The company specified merchant screening, ongoing credit reviews after contracting and monthly management of outstanding receivables as measures against chargeback risk. - FY2021Expanding the scope of risk to face-to-face prepaid servicesAnnual report
「In the face-to-face payments business, if a merchant providing ongoing services on a prepaid basis goes bankrupt, our Group may bear an amount equivalent to the portion of the fees prepaid by the merchant's customers for those ongoing services that had not yet been provided as of the merchant's bankruptcy.」
In addition to chargebacks under principal merchant agreements, the company specified the risk of bearing the value of unprovided services if a merchant offering ongoing prepaid services in the face-to-face payments business goes bankrupt. - FY2019WorsenedAnnual report
「Chargeback provision expense 356,000」
To cover losses expected to arise in the future from chargebacks, the company recognized a provision expense of ¥356 million in the fiscal year under review. - FY2018MitigatedAnnual report
「To avoid these risks, when a merchant joins, in addition to the credit card company's screening process, our Group verifies that the merchant's website exists and checks the website's disclosures required under the Act on Specified Commercial Transactions. We also manage outstanding receivables each month.」
The company specifies merchant screening, website verification and monthly management of outstanding receivables as measures against chargeback risk. - FY2016First statedAnnual report
「If it becomes apparent that a merchant has engaged in fraudulent sales billing or has entered a state equivalent to contract termination, such as bankruptcy, a chargeback risk arises because recovery may be difficult.」
The company explains that paying merchants in advance under principal merchant agreements creates a risk that recovery will be difficult after fraudulent billing or a merchant's bankruptcy.