Recently, online payment solution provider Skrill was acquired by Optimal Payments. The €1.1 billion acquisition deal will see two of the most preferred payment processors by online gambling customers – Skrill itself and NETELLER – being managed by one and the same parent company.
It could be said that both providers of payment services rely quite a lot on Internet gambling operations, as a substantial amount of their revenues is contributed by those same operations. Upon the transaction’s completion, executives for Skrill and Optimal Payments said that they intend to further increase proceeds from online gambling, as the market is known to be growing at an extremely rapid pace.
Since it was founded back in 2001, Skrill has undergone a number of changes in order to turn into what it is now. Although the company started as an online payment processor, it gradually became much larger and is now involved in other activities as well. The following paragraphs represent a somewhat brief overview of Skrill’s establishment, development and relations to one particular industry – online gambling, which, as already mentioned, has been gaining a lot of popularity over the past several years and is expected to further increase its influence and to attract the attention of more and more gambling customers of different nationalities and social status.
A Brief History of Skrill
Skrill, or Moneybookers as it was initially named, was founded back in 2001 by Daniel Klein and Benjamin Kullmann. Although registered that year, the online payment and money transfer website moneybookers.com officially commenced operations in April 2002. Over the first year and a half of operations, Moneybookers had about 2 million registered users. In other words, it seems that the company gained popularity and customers’ trust quite quickly.
In 2008, or six years after Moneybookers started offering its services, it reported to be handling more than 6 million customer accounts and to be operating in a total of 200 countries around the globe.
In 2010, the company was ranked UK’s fastest growing private equity business entity based on its profits. In 2011, it announced that its customer base has reached a total of 25 million. As of 2015, Skrill employs more than 560 people from as many as 30 nationalities. Those work in the company’s London-based headquarters as well as in its offices across Europe and the USA.
Skrill currently handles more than 36 million accounts. Its customers are able to both receive and send money to and from 200 different countries and as many as 40 currencies. The website also provides its services to 156,000 businesses around the world.
Customers of Skrill are able to send and receive money, deposit funds on various international gambling sites, own and use Skrill’s prepaid MasterCard in a number of locations around the world, etc. Speaking of online gaming, the e-wallet was given the green light by the New Jersey Division of Gaming Enforcement to go live with its services in the state, which is only one of three to offer Internet gambling options. This happened in 2013, when six poker operators were allowed to launch such operations within the state’s borders. Thus, Skrill turned into an indispensable part of the gaming experience of New Jersey-located gambling customers.
As it could be seen, the online payments processor grew quite quickly and became one of the leaders in this constantly expanding niche. Over the course of its development, Skrill or Moneybookers went through a number of alterations and important changes that contributed and are to contribute to the company’s popularization and expansion. Two of those significant changes were the e-wallet’s re-branding announced in 2010 and its acquisition by rival Isle of Man-based online payments company Optimal Payments, which was finalized in August 2015.
Change of Name
As mentioned above, Moneybookers announced its planned re-branding in 2010. Back then, the company explained its move with the fact that everything in life changed and it considered it was the right time for such a major change. Its new name – Skrill – has a number of definitions in different slang dictionaries. However, it seems that it has been gradually coined as another term for money.
Moneybookers explained that it had chosen that particular name as a means to best introduce what it has always strived to offer to its customers – innovative and safe ways to pay for their online purchases and to send/receive money, flexibility, choice, “reliability and peace of mind.”
Back then, some assumed that the re-branding from Moneybookers to Skrill could be seen as the company’s attempt to further expand its services within the online retail sector and to limit its operations related to online gambling. Yet, it turned out that this was not the case at all. At the time of the changeover, Moneybookers was among the preferred payment methods on the websites of some of the world’s biggest gambling operators. Now, five years later, Skrill is among the preferred payment methods listed on the websites of even more online bookmakers and card rooms. What is more, it is generally considered by gambling customers among the most efficient providers of ways to transfer money for the purposes of Internet gambling.
Here it is important to note that being founded and headquartered in London, Skrill is administered through UK’s Financial Services Authority and is subject to the country’s financial laws. It also could be said that over the past several years, the site has been a direct competitor to giant PayPal and NETELLER.
In August 2015, Skrill’s competition with the latter e-wallet provider was put to an end after the completion of a key acquisition deal.
Optimal Payments’ Takeover
In March 2015, Optimal Payments, owner of renowned providers of various payment services, such as NETELLER, NETBANX, Net+, etc., proposed to buy Skrill for the amount of €1.1 billion ($1.2 billion). The deal was not finalized until August, as it has been subject to both shareholder and regulatory approval. The FCA gave the green light to the transaction as it considered Optimal Payments had met all the necessary takeover obligations. CVC Capital Partners, which bought a majority stake in Skrill Group for the total amount of €600 million back in 2013, also gave the nod to the acquisition.
Executives of the two business entities pointed out that the merger marked the beginning of “a global fintech champion” and “a powerful force” in “the fast growing digital payments space.” They also noted that deal is transformational not only because it creates a leader in the digital wallet services but also because it gives Optimal Payments the chance to further expand its presence in the constantly growing online gambling market.
Prior to acquiring Skrill, the company had said that revenue from services related to online gambling operations accounted for almost 46% of its overall revenue. Adding yet another leader in the provision of payment options for this swiftly and constantly growing market to its portfolio means that this figure has every chance to go up in future.
Analysts predicted that the acquisition deal will be quite profitable for Optimal Payments. The combined entity is expected to post annual EBITDA of about £117 million. The figure is expected to increase to £160 million in 2017. In comparison, Optimal Payments’ standalone EBITDA was £58 million.
The Many-Faced Skrill
Apart from the traditional services that every self-respecting e-wallet platform offers, the options offered by Skrill are not just limited to that. Being one of the most preferred providers of payment solutions for the online gambling industry, it is not a surprise that the company has made its foray into the world of gambling affiliate marketing, offering exclusive gaming and betting options and bonuses for some of the world’s biggest gaming sites.
But what exactly is affiliate marketing and how does it work?
Affiliate Marketing in a Nutshell
Generally speaking, affiliate marketing is a rapidly growing market and it is quite a useful means for retailers and other types of businesses to popularize their services and product offering through their affiliates or in other words, companies that advertise them on the Internet by means of various approaches. Those approaches could vary broadly – from the orthodox ones, such as organic SEO, e-mail and content marketing, etc. to less traditional ones.
This particular industry has four main players – the retailer, which offers certain services or products and seeks proper advertising for those, the network, which features a wide variety of affiliates to choose from, the publisher, also known as the affiliate itself, and the customer, whom affiliate marketing addresses. The affiliates’ purpose is to bring visitors to the retailer’s website and typically, they get rewarded for this.
Skrill as a Gambling Affiliate
A quick tour around Skrill’s website makes it quite clear that the company has not been involved only in the provision of payment solutions for individuals and business organizations. Yes, it is true that it gives customers the opportunity to quickly and conveniently send and receive money, pay what they need to pay via a 1-Tap mobile optimized payment solution, and many more. Yet, apparently, the company has also decided to delve into the world of affiliate marketing.
Skrill itself features its own affiliate program, which many consider quite alluring. The company promises money rewards to websites that have brought new customers to its own website. But Skrill’s involvement is not limited to this. Its recently introduced Promotional Centre or Exclusive Offers, as the section has been named after the website’s latest update, is just what a typical affiliate offers to customers.
Skrill’s Exclusive Offers is particularly oriented towards two groups of people – gambling customers and traders. For the purposes of this article, we will pay more attention to the gambling customer and what he or she could find in the section.
As a gambling affiliate, Skrill has resorted to a number of marketing approaches in order to draw the attention of people who are already into online gambling as well as of potential gambling customers. In the first place, the website features banners of some of the world’s biggest and most popular gambling operators that provide their services on the major regulated online gaming markets.
Skrill also provides comprehensive reviews on what they offer. Gambling customers as well as potential ones can choose from several gaming options, including sports betting, casino games, poker, and bingo.
Being an affiliate of some of the major online gambling companies on a global scale is quite indicative of Skrill’s involvement in an industry that is expected to further grow in the years to come. With operators constantly expanding their presence and introducing their services to new regulated markets, it seems that the future of the popular online payment processor and its new parent company Optimal Payments is to be even more closely related to the gambling industry. And as it turns out, this involvement is to be related not only to the provision of reliable payment solutions but also of securing operators with successful affiliate marketing activities.
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