Skrill – from Online Payment Processor to Gambling Affiliate

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.

CVC buys Skrill (Moneybookers) for 600 millions euros

It is CVC’s third major move in a week following its £750m acquisition of the white goods insurer Domestic & General and the announcement of exclusive talks to buy parts of the European business of Campbell Soup.

Skrill was formerly known as Moneybookers and processes payments for online retailers, gambling websites and media companies. Investcorp said it reported revenues of more than €200m last year and EBITDA of €50m.

CVC’s acquisition of a 75 percent stake in Skrill will be funded with around €250m of equity as well as debt financing provided by Credit Suisse, RBS and Jefferies. Investcorp, which invested €105m for a controlling stake in Skrill in 2007, will retain a “substantial minority position” and a seat on the board.

The Bahraini Group put Skrill up for sale by Barclays earlier this year following rapid growth and the acquisition last year of Paysafecard.com from Wertkarten, an Austrian provider of prepaid vouchers that enable consumers to shop online with a lower fraud risk, for €140m. The company now employs some 700 staff and boasts 35 million account holders, and 150,000 merchants. It competes with the eBay-owned digital wallet provider PayPal and Google Checkout, among others.

The company’s management team will remain in place folowing completion of the deal, which is subject to approval by regulators.

Skrill chief executive Siegfried Heimgaertner said: “We are delighted to have CVC on-board whilst retaining Investcorp as a significant investor.

“CVC’s global reach and experience will support our goal to become the first choice in payments on a global basis. The value-based transformation we began in 2012 will continue unabated through this year and into 2014.”

CVC senior managing director Peter Rutland said it would support Skrill’s international expansion plans. The company had planned to raise funding in a flotation but abandoned the idea in 2011 amid concern about the weak IPO market.

Skrill complete acquisition of Paysafecard

Skrill the winner of Payment Solutions Provider at the recent 6th International Gaming Awards have announced that the acquisition of paysafecard, the Austrian prepaid payments business, has been completed today. Skrill is majority owned by Investcorp Technology Partners.

As the European market leader in prepaid online payment, the acquisition of paysafecard represents a hugely significant step forward for Skrill, expanding its position as one of the world’s largest digital wallet providers. paysafecard’s products allow payments without a credit card or bank account at more than 4,000 online stores and more than 450,000 sales outlets in 33 countries across Europe, North America and South America. In 2012, it processed more than 55 million transactions.

Skrill and paysafecard’s combined offering will deliver an end-to-end stored value payment solution, combining a secure prepaid product that complements Skrill’s existing payments service. paysafecard’s offline distribution network adds to Skrill’s already significant online network that boasts more than 100 payment options in 200 countries worldwide. The joining together of Skrill and paysafecard also opens up the business to new markets within under-banked populations.

“For both sides this is a strategically important acquisition and we are pleased it is now finalised. paysafecard complements our current offering and strengthens our position in the key gaming and digital media markets verticals, establishing us as a provider of end-of-end transfer of stored value,” said Siegfried Heimgaertner, CEO of Skrill. “This is another significant step towards our long-term ambitions to become the first choice for online payments, helping our end-customers and merchants to pay and get paid globally.”

Michael Mueller, CEO of paysafecard, said, “Having grown into a market leader for prepaid payments our consolidation with Skrill is a natural next step for the business, taking our products to a global network of merchants and consumers. We have great faith in Skrill’s entrepreneurial vision, and look forward to continuing to grow the business.”

bwin.party caught up in Megaupload case

bwin.party Digital has defended its link to the recently indicted Megaupload.com, saying it was unaware of any of the company’s alleged illegal dealings.

The colourful founder of megaupload.com known as Kim Dotcom, formerly Kim Schmitz, aka Kim Tim Jim Vestor and Kimble is an internet entrepreneur who was arrested along with four others earlier this week and remains in police custody in New Zealand on suspicion of heading a global criminal conspiracy that involves copyright infringement and money laundering related to pirated films, music and TV programmes through his website megaupload.com

U.S. Authorities are seeking his extradition to face charges in the United States and if found guilty, he could face up to 20 years in prison. Dotcom (Schmitz) has previously been convicted for an array of charges ranging from hacking offences, insider trading, and embezzlement amongst others.

Unfortunately for bwin.party Digital, PartyGaming and its poker arm PartyPoker were named in the indictment under “Third Parties” for paying over $3 million for advertising on the megaupload site. A contract which was initiated around mid-November 2009 before its March 2011 merger with Bwin and was “still active on or about March, 18 2011″. Other’s named included PayPal and Moneybookers.

bwin.party was quick to respond with John Shepherd the company’s director of communications saying the company had terminated the contract once the news broke and that it “had no knowledge about any of the alleged activities undertaken by Megaupload.”

Moneybookers to rebrand as Skrill – hopes to become a verb

Moneybookers, the European PayPal alternative or “eWallet provider”, has announced that it is rebranding to Skrill.

The new name, which will take over as the consumer-facing brand by the end of 2011, is said to better capture the “ease and functionality of the company’s online payment suite”. Of course, the word skrill (short for skrilla) is already a commonly used slang word for money or “dough”, according to the infamous Urban Dictionary, which definitely makes more sense.

But there’s more.

Moneybookers Limited, which has been around for just under a decade, became the first e-money issuer to obtain an electronic money licence from the regulatory body the FSA and today claims over 15 million account holders and 70,000 merchants globally. While this year, Moneybookers was voted the UK’s fastest growing private-equity funded company by Deloitte and The Sunday Times. It’s apparently this “rapid growth” that has led Moneybookers to change its name.

Furthermore, Martin Ott, co-CEO of the new Skrill Holdings, appears to suggest that the company now wants to become a verb, something that Google and others have been determined to clamp down on for fear of risking their trademark.

“In the same way people ‘Google’ something or ‘Skype’ their friends, they can soon ‘Skrill’ their friends and family money and will use Skrill to pay whenever they shop online”, says Ott.

Moneybookers will be sold and rebranded as Skrill

A prominent online payment processor Moneybookers will raise about £200 million by floating on the London Stock Exchange in the next few months. The move comes after its Middle Eastern owner Investcorp last year tried to sell Moneybookers.

The majority stake is owned by the Bahrain-based investment group which acquired the company in 2007 for €105m. According to reports Investcorp hired JPMorgan to manage the sale and was understood to be looking for as much as €400m for the UK-based group but failed to attract a buyer.

The reports also say that as part of the floatation the shareholders, which also include the founders of the company, are considering the rebranding of the group into Skrill, a slang word for money.