Bad Debt and Credit Risk in the Merpay Credit Business
First written in FY2021. 14 of 16 entries say "Worsened", first in FY2022. Latest entry: FY2026.
Mercari moved to the "Worse" side of this theme in 2022, the same year as the typical company in this theme.
The whole theme swung hardest in 2022: 6 of 17 companies on the "Worse" side.
9 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「The balance of receivables (Note 2) grew steadily by 44.4% year on year to ¥358.1 billion. The receivables collection rate (Note 3) remained high at 99.4% through strict credit controls leveraging our proprietary AI credit assessment and other measures.」
The credit balance expanded to ¥358.1 billion, increasing exposure to credit risk. Meanwhile, the collection rate remained at 99.4%, and the allowance for doubtful accounts was ¥24.2 billion. - FY2026-H1WorsenedAnnual report
「The receivables balance (Note 2) grew steadily to ¥300.7 billion, up 41.0% year on year, while the collection rate (Note 3) remained at 99.3% through strict credit controls leveraging proprietary AI-based credit assessment.」
Credit receivables increased 41.0% year on year to ¥300.7 billion, increasing exposure to bad debt and credit risk. Meanwhile, the collection rate remained at 99.3%. - FY2025WorsenedAnnual report
「Driven by growth in Fixed-Amount Payment receivables, full-year revenue continued to grow at a high rate, rising 15% year on year, or 18% excluding the accounting treatment under which part of point expenses is deducted from revenue. The company also promoted management focused on monetization, resulting in core operating profit of ¥4.5 billion. Meanwhile, the receivables balance (Note 3) reached ¥248.1 billion and continued to grow steadily, while the receivables collection rate (Note 4) remained high at 99.3% through strict credit controls leveraging proprietary AI-based credit assessment.」
Credit receivables expanded to ¥248.1 billion, increasing exposure to credit risk. Meanwhile, the collection rate was 99.3% and core operating profit was ¥4.5 billion. - FY2025-H1WorsenedAnnual report
「As the customer base expanded due to high usability and the receivables balance (Note 3) grew to ¥213.3 billion, the receivables collection rate (Note 4) remained high at 99.3% through strict credit controls leveraging proprietary AI-based credit assessment, achieving healthy growth.」
The credit service's receivables balance expanded to ¥213.3 billion, increasing exposure to credit risk. Meanwhile, the receivables collection rate was reported at 99.3%. - FY2024WorsenedAnnual report
「As growth in the Credit service drove the receivables balance (Note 4) to ¥187.2 billion, the receivables collection rate (Note 5) also improved to 99.2% through strict credit controls leveraging proprietary AI-based credit assessment, achieving healthy growth.」
The Credit service's receivables balance expanded to ¥187.2 billion, increasing exposure to credit risk. Meanwhile, the collection rate improved to 99.2% through AI-based credit assessment and other measures. - FY2024-Q3WorsenedAnnual report
「Trade and other receivables increased by ¥58,636 million from the end of the previous consolidated fiscal year, mainly due to increased use of Merpay Smart Money (pay-next-month and fixed-amount payment plans).」
As use of Merpay Smart Money increased, trade and other receivables rose by ¥58,636 million, increasing exposure to credit risk associated with the credit business. - FY2024-Q2WorsenedAnnual report
「As the receivables balance (Note 4) surpassed ¥150 billion alongside stable growth in the Credit service, the collection rate (Note 5) also remained on track at 99.1%.」
The Credit service's receivables balance surpassed ¥150 billion, increasing exposure to bad debt and credit risk. Meanwhile, the collection rate was reported at 99.1%. - FY2024-Q1WorsenedAnnual report
「Trade and other receivables increased by ¥14,235 million from the end of the previous consolidated fiscal year, mainly due to increased use of Merpay Smart Money (pay-next-month and fixed-amount payment plans).」
As use of Merpay Smart Money increased, trade and other receivables rose by ¥14,235 million, increasing exposure to credit risk associated with the credit business. - FY2023WorsenedAnnual report
「As the receivables balance (Note 5) grew to ¥117.8 billion, driven by the growth of Fixed-Amount Payments, the receivables collection rate (Note 6) also improved to 98.7% through strict credit controls leveraging proprietary AI-based credit assessment, achieving healthy growth.」
The receivables balance grew to ¥117.8 billion as the Credit service expanded, increasing exposure to credit risk. Meanwhile, the collection rate improved to 98.7% through AI-based credit assessment and other measures. - FY2023-Q3WorsenedAnnual report
「The Credit service continued to drive growth. In addition to the expansion of existing services, centered on Fixed-Amount Payments, usage through Mercard also contributed, and the receivables balance (Note 3) surpassed ¥100 billion. The collection rate for receivables (Note 4) also remained stable.」
As usage of the Credit service and Mercard expanded, the receivables balance surpassed ¥100 billion, increasing exposure to credit risk. The company stated that the receivables collection rate remained stable. - FY2022WorsenedAnnual report
「The allowance for doubtful accounts increased from ¥2,416 million at the end of the previous consolidated fiscal year to ¥4,807 million at the end of the current consolidated fiscal year.」
As Merpay's credit balance expanded, the allowance for doubtful accounts increased from ¥2,416 million to ¥4,807 million, increasing exposure to bad debt and credit risk. - FY2021First statedAnnual report
「Although the allowance for doubtful accounts at the end of the current consolidated fiscal year represents the best estimate available at this time, the assumptions used in the estimate are subject to uncertainty. If changes in economic conditions or other factors alter borrowers' credit risk, they may have a material impact on the allowance for doubtful accounts and the provision for doubtful accounts recognized in the consolidated financial statements for the next consolidated fiscal year.」
As its credit business expanded through Merpay Smart Money and other services, the company recorded an allowance for doubtful accounts of ¥2,416 million and, for the first time, separately identified credit risk as a significant accounting estimate affecting future allowances and expenses based on changes in borrowers' repayment capacity, collection rates and factors such as COVID-19.