{"url_path":"/sec/payp/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 Major Shareholders and Related Party Transactions","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-06-30","source_url":"https://www.sec.gov/Archives/edgar/data/2080845/0001193125-26-289382-index.html","accession_number":"0001193125-26-289382","cik":"0002080845","ticker":"PAYP","issuer_name":"PayPay Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/2080845/0001193125-26-289382-index.html","primary_entity_key":"0002080845","primary_entity_name":"PayPay Corp"},"word_count":4330,"has_tables":true,"body_markdown":"Item 7. Major Shareholders and Related Party Transactions\n\nA Major shareholders\n\nThe following table sets forth information regarding the beneficial and record ownership of our common shares as of May 31, 2026, by each person known to us to beneficially or of record own 5% or more of our outstanding common shares.\n\n \n\n \n\n \n\n \n\n \n\nShareholder\n\n \n\nNumber of\nShares Owned\n\n \n\nPercentage of Total Shares\nOutstanding\n\nB Holdings Corporation\n\n \n\n318,721,600\n\n \n\n47.07%\n\nSVF II Piranha (DE) LLC\n\n \n\n192,829,840\n\n \n\n28.48%\n\nThe Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders\n(Standing proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)\n\n \n\n63,504,895\n\n \n\n9.38%\n\nSoftBank Corp.\n\n \n\n51,043,400\n\n \n\n7.54%\n\nLY Corporation\n\n \n\n51,043,400\n\n \n\n7.54%\n\nTotal\n\n \n\n677,143,135\n\n \n\n100.00%\n\nThe Bank of New York Mellon holds these shares of record solely in its capacity as the depositary for our American Depositary Receipt program and does not exercise beneficial ownership over these shares in its own right.\n\n \n\nNone of our shares of common stock entitles the holder to any preferential voting rights.\n\nDuring the past three years, the percentage ownership of our major shareholders changed as follows. Based on our shareholder register and related transfer records, B Holdings Corporation, SVF II Piranha (DE) LLC, SoftBank Corp. and LY Corporation held approximately 54.78%, 34.00%, 5.61% and 5.61%, respectively, of our outstanding common shares as of March 31, 2023, and approximately 49.99%, 34.00%, 8.01% and 8.01%, respectively, after giving effect to the capital increase on April 10, 2025. The subsequent changes to the percentages shown in the table above primarily resulted from SVF II Piranha (DE) LLC’s sale of common shares in our initial public offering and\n\n105\n\n[Table of Contents](#toc_page)\n\n \n\nour issuances of common shares in connection with the initial public offering, the exercise of the over-allotment option and stock option exercises. The 200-for-1 stock split effected on November 15, 2025 did not affect their percentage ownership.\n\nAs of May 31, 2026, 256,334,735 common shares, or 37.86% of our outstanding common shares, were held of record in the United States by two record holders: The Bank of New York Mellon, as depositary for our ADR program, which held 63,504,895 common shares, or 9.38% of our outstanding common shares, and SVF II Piranha (DE) LLC, which held 192,829,840 common shares, or 28.48% of our outstanding common shares. The Bank of New York Mellon holds such shares solely in its capacity as depositary and does not beneficially own them in its own right.\n\nAs of May 31, 2026, except for The Bank of New York Mellon, all of our major shareholders listed above were directly or indirectly controlled by SoftBank Group Corp., a Japanese public company listed on the Tokyo Stock Exchange. Accordingly, SoftBank Group Corp. may be deemed to beneficially own 90.62% of the aggregate voting power of our issued and outstanding shares. To our knowledge, there are no arrangements that may, at a subsequent date, result in a change in control of the company.\n\nB Related party transactions\n\nOur material related party transactions since April 1, 2022 are summarized below.\n\nOur Related Party Transaction Policy\n\nUnder our current policies, transactions that fall within the scope of Article 356, paragraph (1), item (ii) and (iii) of the Companies Act, which may include transactions between PayPay and SoftBank Corp., LY Corporation, SB Payment Service Corporation, Fukuoka SoftBank HAWKS Corp., PayPay SC Corporation or B Holdings Corporation, for which any of our directors serve as a representative director, are subject to approval by both our Audit and Supervisory Committee and our board of directors regardless of the expected transaction amount. In addition, related party transactions with our controlling shareholders, such as SoftBank Group Corp., that are expected to exceed ¥1 billion are subject to approval by our Audit and Supervisory Committee and by our board of directors. All other transactions that are expected to exceed ¥1 billion are subject to approval by our Audit and Supervisory Committee.\n\nRelationship with SoftBank Group companies\n\nAs of May 31, 2026, our principal shareholders were B Holdings Corporation (47.07%), SVF II Piranha (DE) LLC (28.48%), SoftBank Corp. (7.54%) and LY Corporation (7.54%).\n\nSoftBank Group Corp. is the parent company of SoftBank Corp. and LY Corporation. With respect to B Holdings Corporation, SoftBank Corp. holds 50% of its shares and LY Corporation indirectly holds the other 50% of its shares. SoftBank Group Corp. is also a beneficial owner of a majority of shares in SVF II Piranha (DE) LLC. SoftBank Group Corp., SoftBank Corp. and LY Corporation are listed on the Tokyo Stock Exchange.\n\nSince the launch of our PayPay app in 2018, we have had extensive business dealings with affiliated companies ultimately controlled by SoftBank Group Corp., including with respect to promoting and marketing our services, the secondment of employees and outsourcing of services as well as joint branding.\n\nManagement Agreement with B Holdings Corporation\n\nOn June 16, 2023, we entered into a management agreement with B Holdings Corporation, pursuant to which, as long as we are a consolidated subsidiary of LY Corporation, the prior written approval of B Holdings Corporation is required for us to (a) take any action to issue or grant our shares, stock options, convertible bonds or any other rights to acquire our shares (including disposal of treasury shares and treasury stock acquisition rights) if as a result of such action the percentage of voting rights held by B Holdings Corporation would be 50% or less (on a fully diluted basis assuming the exercise of all outstanding stock options, convertible bonds and rights to acquire our shares) and (b) sell, transfer, assign, grant a security interest in or dispose of assets, including shares, and business owned by us or our consolidated subsidiaries, which account for 20% or more of the book value of our total assets on a consolidated basis as of the latest fiscal year-end, to a third party other than our subsidiaries.\n\nRegistration Rights Agreement\n\nIn connection with our IPO, we have entered into a registration rights agreement (the “Registration Rights Agreement”) with certain of our principal shareholders identified on the signature pages thereto. The Registration Rights Agreement grants certain demand registration rights, short-form registration rights and piggyback registration rights in respect of our common shares and related indemnification rights from us, subject to customary restrictions and exceptions. All fees, costs and expenses of registrations, other than underwriting discounts and commissions, are expected to be borne by us. The form of the Registration Rights Agreement is filed as an exhibit to this Annual Report.\n\n106\n\n[Table of Contents](#toc_page)\n\n \n\nPrivate Placement\n\nWe have historically funded our operations through the issuance of shares to entities affiliated with SoftBank Group Corp. The following is a history of our securities issuances since April 1, 2022. On November 15, 2025, we effected a stock split of one share into 200 shares. The historical issuances of preferred shares and common shares described in this subsection have not been retroactively adjusted to reflect the Stock Split. The numbers of shares underlying stock options and the corresponding exercise prices presented in this subsection have been retroactively adjusted to reflect the Stock Split.\n\nCommon Shares\n\nOn April 1, 2022, we issued 140,000 common shares to SoftBank Corp., 280,000 common shares to SVF II Piranha (DE) LLC and 140,000 common shares to Yahoo Japan Corporation in exchange of the same number of Class A preferred shares held by them, respectively.\n\nOn October 1, 2022, we issued 545,000 common shares to SoftBank Corp. and 545,000 common shares to Z Intermediate Holdings Corporation in exchange of the same number of Class A preferred shares held by them, respectively.\n\nOn April 4, 2025, SVF II Piranha (DE) LLC exercised the stock options it purchased from One97 Communications Singapore Private Limited in December 2024 and we issued 159,012 common shares.\n\nOn April 10, 2025, we issued 94,802 common shares to SVF II Piranha (DE) LLC, 92,021 common shares to SoftBank Corp. and 92,021 common shares to LY Corporation for an aggregate consideration of JPY 105,722,866,068.\n\nStock Options\n\nSee “Item 6. Directors, Senior Management and Employees—B. Compensation—Stock Options” above.\n\nPlan-related issuance\n\nOn August 29, 2022, we issued 4,215 2nd series stock options, 4,215 3rd series stock options, 4,215 4th series stock options, 4,215 5th series stock options, 4,186 6th series stock options, 2,080 7th series stock options, 1,929 8th series stock options, 1,929 9th series stock options, 1,929 10th series stock options, 1,929 11th series stock options, 1,795 12th series stock options, 1,642 13th series stock options, 1,622 14th series stock options, 1,542 15th series stock options, 1,542 16th series stock options, 1,242 17th series stock options, 1,242 18th series stock options, 962 19th series stock options, 542 20th series stock options 542 21st series stock options, 871 22nd series stock options, 871 23rd series stock options, 806 24th series stock options, 806 25th series stock options, 626 26th series stock options, 365 27th series stock options, 365 28th series stock options, 365 29th series stock options, 365 30th series stock options, 365 31st series stock options, 420 32nd series stock options, 420 33rd series stock options, 420 34th series stock options, 400 35th series stock options, 400 36th series stock options, 533 37th series stock options, 533 38th series stock options, 518 39th series stock options, 518 40th series stock options, 518 41st series stock options, 836 42nd series stock options, 836 43rd series stock options, 836 44th series stock options, 836 45th series stock options and 836 46th series stock options, upon exercise of which an aggregate of the number of shares of our common stock adjusted for the Stock Split, will be acquired at an exercise price of JPY 1,300 per share respectively, and allocated them to Kotaeru Trust Co., Ltd., for future delivery of such stock options in accordance with the trust agreement between Kotaeru Trust Co., Ltd. and SoftBank Corp. and the trust agreement between Kotaeru Trust Co., Ltd. and LY Corporation to directors, corporate officers and employees of us and our subsidiaries designated by us as beneficiaries of the trusts in accordance with the trust management agreement between us, Kotaeru Trust Co., Ltd. and Kotaeru Holdings Co., Inc.\n\nOn May 31, 2025, we granted 38,127 47th series stock options and 2,675 48th series stock options through tax qualified-type stock options and 2,845 49th series stock options through one-yen-exercisable at retirement-type stock options. These stock options entitle the holders, upon exercise, to purchase the number of shares of our common stock, adjusted for the Stock Split, at an exercise price of JPY 1,300 per share for the 47th and 48th series stock options and JPY 1 per share for the 49th series stock options, respectively. These stock options were allocated to our directors, corporate officers and other employees.\n\nTransactions in connection with reorganization of PayPay Card Corporation\n\nCompany Split\n\nYahoo Japan Corporation was a wholly-owned subsidiary of Z Holdings Corporation before they merged to form LY Corporation. On October 1, 2022, PayPay Card Corporation took over LY Corporation’s (then Yahoo Japan Corporation) credit card merchant acquiring business for PayPay Card by means of a company split and PayPay Card Corporation issued 5,426 of its shares to LY Corporation (then Yahoo Japan Corporation) as consideration.\n\n107\n\n[Table of Contents](#toc_page)\n\n \n\nShare Purchase\n\nOn October 1, 2022, upon completion of the company split, we purchased all shares in PayPay Card Corporation from LY Corporation (then Yahoo Japan Corporation) for ¥63 billion pursuant to a share purchase agreement, whereby PayPay Card Corporation became our wholly-owned subsidiary.\n\nDistribution of Dividend\n\nOn September 30, 2022, prior to the above acquisition, PayPay Card Corporation, which was LY Corporation’s (then Yahoo Japan Corporation) wholly-owned subsidiary at the time, distributed dividends of ¥37 billion to LY Corporation (then Yahoo Japan Corporation) pursuant to the share purchase agreement between LY Corporation (then Yahoo Japan Corporation) and us.\n\nIssuance of Shares\n\nOn October 7, 2022, PayPay Card Corporation issued 5,018 of its shares to us and we paid ¥37 billion to PayPay Card Corporation as consideration.\n\nTransactions in connection with acquisition of shares in PayPay Securities Corporation\n\nPurchase of Newly Issued Shares\n\nOn April 10, 2023, we purchased 65,560 newly issued shares of PayPay Securities Corporation at a price of ¥100,000 per share while SoftBank Corp. and Mizuho Securities Co., Ltd. purchased 13,536 and 20,904 such shares, respectively. Upon the completion of this transaction, we held 35.0% shares in PayPay Securities Corporation while SoftBank Corp., Mizuho Securities Co., Ltd. and Z Holdings Corporation held 30.6%, 34.0% and 0.4%, respectively, whereby PayPay Securities Corporation remained a subsidiary of SoftBank Corp.\n\nShare Purchase and Third-Party Allotment of New Shares\n\nOn April 1, 2025, we purchased 57,265 shares of PayPay Securities Corporation at a price of ¥100,000 per share from SoftBank Corp. and 800 shares from LY Corporation, as well as acquired 70,000 new shares through a third-party allotment at the same price. Upon completion of this transaction, we held 75.2% of PayPay Securities Corporation while Mizuho Securities Co., Ltd. held 24.8%, making PayPay Securities Corporation our consolidated subsidiary.\n\n \n\nTransactions in connection with acquisition of shares in PayPay Bank Corporation\n\nOn December 13, 2022, PayPay Bank Corporation conducted a third-party allotment of 883,000 new shares of non-voting Class A preferred shares at a price of ¥79,200 per share, which were purchased by Z Financial Corporation (currently LY Corporation).\n\nIn April 2025, we completed the acquisition of 47.1% of the common shares and 100% of the non-voting Class A preferred shares of PayPay Bank Corporation from Z Financial Corporation (currently LY Corporation) and Mitsui Sumitomo Insurance Co., Ltd. Upon completion of this transaction, Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company held 46.6%, 5.3%, 0.5% and 0.5% of the common shares, respectively. Upon the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares, effective April 28, 2025, we held 75.5% of the common shares, making PayPay Bank Corporation our consolidated subsidiary. Sumitomo Mitsui Banking Corporation, Fujitsu Ltd., Taiju Life Insurance Company Limited and Sumitomo Life Insurance Company held 21.5%, 2.4%, 0.2% and 0.2%, respectively, of the common shares upon the conversion of the non-voting Class A preferred shares of PayPay Bank Corporation into common shares.\n\nFollowing the conversion of all non-voting Class A preferred shares of PayPay Bank Corporation into common shares, no non-voting Class A preferred shares remain outstanding as of the date of this Annual Report.\n\nLoans to PayPay Card Corporation from LY Corporation\n\nIn February 2018, PayPay Card Corporation (then YJ Card Corporation) entered into an agreement with LY Corporation (then Yahoo Japan Corporation), pursuant to which LY Corporation (then Yahoo Japan Corporation) agreed to provide loans of up to ¥70 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Yahoo Japan Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Yahoo Japan Corporation). In April 2019, PayPay Card Corporation entered into a ¥10 billion loan agreement with LY Corporation (then Yahoo Japan Corporation) due in December 2027, with a fixed interest rate of 0.5%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding under this loan agreement was ¥10 billion. There is\n\n108\n\n[Table of Contents](#toc_page)\n\n \n\nno remaining committed availability under this loan agreement.\n\nIn December 2019, PayPay Card Corporation entered into an agreement with LY Corporation (then Z Holdings Corporation), pursuant to which LY Corporation (then Z Holdings Corporation) agreed to provide loans of up to ¥25 billion to PayPay Card Corporation and PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation (then Z Holdings Corporation) with respect to any contractual obligation between PayPay Card Corporation and LY Corporation (then Z Holdings Corporation). In December 2019, LY Corporation (then Z Holdings Corporation) provided a ¥10 billion loan to PayPay Card Corporation due in December 2028, with a fixed interest rate of 0.6%, for general business purposes, including working capital. As of March 31, 2026, the amount outstanding under this loan agreement was ¥10 billion. There is no remaining committed availability under this loan agreement.\n\nIn February 2024, PayPay Card Corporation entered into a ¥15 billion term loan agreement with LY Corporation due in February 2026, with a fixed interest rate of 0.7%, for general business purposes, including working capital. Under the agreement, PayPay Card Corporation agreed to grant a security interest at the request of LY Corporation with respect to any contractual obligation between PayPay Card Corporation and LY Corporation. This loan was repaid in full in February 2026, and as of March 31, 2026, no amount was outstanding under this loan agreement.\n\nIn December 2024, LY Corporation and PayPay Card Corporation executed a memorandum of understanding pursuant to which the permitted use of proceeds for the intercompany loans described above was broadened to include business investments (including the provision of working capital and loans to PayPay Corporation for its business investments). The other principal terms of the loan agreements remain the same. The memorandum of understanding provides that the parties may agree from time to time to renew or extend the maturity of the loans described above. In the event of such renewal, the date of maturity is extendable unless LY Corporation provides one month of notice that the repayment date will not be extended, with the final maturity being no later than March 29, 2030. Any such renewal bears interest at a rate equal to LY Corporation’s average funding cost as of the day after the repayment date prior to the extension plus a spread of 0.1. As of March 31, 2026, the aggregate outstanding principal amount of the loans described above was ¥20 billion, consisting of the April 2019 and December 2019 loans, and the February 2024 term loan had been repaid in full in February 2026.\n\nCash Deposits by PayPay Card Corporation with LY Corporation\n\nIn October 2021, PayPay Card Corporation entered into a cash deposit agreement with LY Corporation (then Z Holdings Corporation) with a floating interest rate to be monthly agreed at no more than 2% per annum in order to improve funding efficiency through group financing, pursuant to which PayPay Card Corporation has deposited cash to LY Corporation (previously Z Holdings Corporation). Under the agreement, the deposits can be withdrawn by PayPay Card Corporation based on its financial and business needs, after discussing with LY Corporation. In addition, the agreement may be terminated based on PayPay Card Corporation’s financial and business needs only upon discussion with LY Corporation.\n\nTransactions with LY Corporation\n\nYahoo Japan Corporation was a wholly-owned subsidiary of Z Holdings Corporation before they merged to form LY Corporation.\n\nSettlement Fee for e-commerce\n\nOn January 9, 2019, we entered into an agency agreement with LY Corporation (then Yahoo Japan Corporation), pursuant to which LY Corporation acts as an agent for its merchants using our payment settlement services on e-commerce platforms operated by LY Corporation, whereby LY Corporation pays settlement fees to us on behalf of the merchants.\n\nCollaborative Promotion\n\nLY Corporation (previously Yahoo Japan Corporation) has utilized PayPay Points as its loyalty points offered to its customers. For instance, LY Corporation (previously Yahoo Japan Corporation) has offered promotional campaigns from time to time to customers of its e-commerce platforms such as Yahoo! JAPAN Shopping. LY Corporation pays to us cash amounts, which we record under our assets, corresponding to PayPay Points granted to its customers which are recorded as PayPay Users’ deposits under our liabilities, helping us to add LY Corporation’s customers to our user base.\n\nIn October 2022, we entered into an agreement with LY Corporation (then Yahoo Japan Corporation) on promotion, advertising, user acquisition and user incentives, pursuant to which LY Corporation (then Yahoo Japan Corporation) produced and placed advertisements for promotional campaigns to grant PayPay Points to customers using our payment settlement services on its e-commerce platform by allocating expenses between LY Corporation (then Yahoo Japan Corporation) and us.\n\n109\n\n[Table of Contents](#toc_page)\n\n \n\nAgency Agreement for PayPay Card’s Merchant Acquisition\n\nOn July 30, 2018, we entered into an agency agreement with LY Corporation (then Yahoo Japan Corporation) for the PayPay Card (then YJ Card) credit card merchant acquiring business operated by LY Corporation (then Yahoo Japan Corporation) as the acquirer at that time. Under the agreement, we have been acting as an agent for PayPay merchants who applied for PayPay Card membership, whereby we receive merchants’ receivables generated from payments using PayPay Cards at their shops from the acquirer and pay settlement fees to the acquirer on behalf of the merchants. On October 1, 2022, PayPay Card Corporation succeeded the status as a party to this agreement, or the status as the acquirer, from LY Corporation (then Yahoo Japan Corporation).\n\nSettlement Fee for e-commerce (PayPay Card Corporation)\n\nSince October 2022, LY Corporation (previously Yahoo Japan Corporation) has been acting as an agent for merchants using its e-commerce platforms, where PayPay Card (previously YJ Card) can be used as a payment method, whereby LY Corporation pays settlement fees on behalf of the merchants to PayPay Card Corporation (previously YJ Card Corporation).\n\nFor the transactions described above, we recorded revenue for the years ended March 31, 2024, 2025 and 2026 of ¥15.7 billion, ¥18.3 billion and ¥21.9 billion, respectively. In addition, the volume of rendering settlement service for the years ended March 31, 2024, 2025 and 2026 were ¥1,769.0 billion, ¥1,825.1 billion and ¥2,097.8 billion, respectively.\n\nPayPay Points Arrangements Paid to LY Corporation (previously Yahoo Japan Corporation) (PayPay Card Corporation)\n\nPayPay Card holders who use PayPay Card to make purchases on LY Corporation’s (previously Yahoo Japan Corporation) e-commerce platforms are granted PayPay Points equivalent to a percentage of the value of such purchases. PayPay Card Corporation pays to LY Corporation cash amounts corresponding to the PayPay Points granted through the purchases described above.\n\nWe award PayPay Points to new PayPay Card holders in exchange for the issuance of PayPay Card and additional PayPay Points when a certain number of purchases are made with PayPay Card following such issuance as an incentive to increase our PayPay Card holder base and the use of PayPay Card. When new cardholders apply for PayPay Card through LY Corporation’s e-commerce platforms, PayPay Card Corporation pays to LY Corporation cash amounts, corresponding to the PayPay Points awarded as a result of the application and subsequent purchases described above.\n\nFor the transactions described above, we recorded expenses of user incentives as transaction and service deductions for the years ended March 31, 2024, 2025 and 2026 of ¥6,573 million, ¥2,814 million and ¥2,897 million, respectively.\n\nTransactions with SoftBank Corp.\n\nCollaborative Promotion\n\nSoftBank Corp. has utilized PayPay Points, PayPay Point Code with which users can pre-load their PayPay Balance and PayPay Coupons with which users can earn additional PayPay Points for payments using our payment settlement services as part of its loyalty programs offered to its customers. SoftBank Corp. pays to us cash amounts, which we record under our assets, corresponding to PayPay Points, PayPay Point Code and PayPay Coupons granted to its customers, which we record as PayPay User’s deposits under our liabilities, helping us to add SoftBank Corp.’s customers to our user base.\n\nFor the transactions described above, the volume of settlement amounts for Granting PayPay points to users on behalf of SoftBank Corp. for the year ended March 31, 2024, 2025 and 2026 were ¥19,888 million, ¥36,385 million and ¥55,699 million, respectively.\n\nSecuritization of SoftBank Corp.’s Receivables\n\nSoftBank Corp. has securitized its receivables from installment sales of mobile devices for funding and PayPay Bank Corporation has purchased certain beneficiary interest in those securitized installment receivables from SoftBank Corp. Securitized installment receivables are recorded as securities under our assets on our consolidated statements of financial position.\n\nFor the transactions described above, we recorded on securities for the years ended March 31, 2024, 2025 and 2026 of ¥80,278 million, ¥123,050 million and ¥139,630 million, respectively.\n\n110\n\n[Table of Contents](#toc_page)\n\n \n\nTransactions with SB Payment Service Corp.\n\nSB Payment Service Corp. is a wholly-owned subsidiary of SoftBank Corp.\n\nSettlement Fee\n\nSB Payment Service Corp. acts as our payment service provider, among others, and assists our merchants using our payment settlement services. Under a general agency agreement with SB Payment Service Corp., we transfer funds to SB Payment Service Corp. corresponding to the amount of purchases our users make with our PayPay app at merchants’ stores less settlement fees we charge the merchants. SB Payment Service Corp. is then responsible for paying merchants from the transferred funds. SB Payment Service Corp. also provides us with various services, such as access to a payment gateway which connects the merchants to our payment system, and supports our relations with the merchants by checking information provided by the merchants and by communicating with the merchants on our behalf. We pay SB Payment Service Corp. a fee for merchants that connect to our payment system using the payment gateway, which is calculated based on a percentage applied to the value of transactions made through SB Payment Service Corp.’s systems.\n\nFor the transactions described above, the volume of settlement amounts for the years ended March 31, 2024, 2025 and 2026 were ¥419.1 billion, ¥721.4 billion and ¥1,011.2 billion, respectively.\n\nFund Source Cost\n\nWhen users increase their PayPay Balance by carrier billing or SoftBank Card, a prepaid payment instrument, SB Payment Service Corp. transfers funds to the users’ PayPay Balance as a payment agent and we pay SB Payment Service Corp. a Fund Source Cost and expenses relating to uncollectible receivables. In addition, when SB Payment Service Corp. transfers funds to the users’ PayPay Balance, we record accounts receivable for SB Payment Service Corp. of an equal amount to the amount of funds transferred.\n\nFor the transactions described above, we recorded such expenses for the years ended March 31, 2024, 2025 and 2026 of ¥10.2 billion, ¥8.8 billion and ¥8.7 billion, respectively. In addition, the volume of settlement amounts for the years ended March 31, 2024, 2025 and 2026 were ¥912,322 million, ¥615,825 million and ¥591,330 million, respectively.\n\nC Interests of experts and counsel\n\nNone."}