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.
Showing posts with label Neteller. Show all posts
Showing posts with label Neteller. Show all posts
September 25, 2015
September 08, 2015
Optimal to change name to Paysafe Group
Optimal Payments the giant online payments firm has announced it is to change its operating name to Paysafe Group PLC at an Extraordinary General Meeting later in September.
The move comes as the payment firm looks to be admitted into the London Stock Exchange main market for listed securities. Optimal Payments have been busy over the last year acquiring leading smaller payments companies with the most recent and notable being that of Skrill for 1.1 billion euros.
The move comes as the payment firm looks to be admitted into the London Stock Exchange main market for listed securities. Optimal Payments have been busy over the last year acquiring leading smaller payments companies with the most recent and notable being that of Skrill for 1.1 billion euros.
March 23, 2015
Optimal Payments strikes €1.1bn digital wallet deal for Skrill
Optimal Payments has expanded its digital wallet with the €1.1bn reverse takeover of rival Skrill in a move that will propel the combined online payments business into the FTSE 250.
The company said the “transformational” deal would broaden its exposure to the “rapidly expanding online gaming sector” as well as the wider e-commerce world
The group has developed a payments technology system allowing gamblers to transfer winnings and place stakes across a range of gaming websites at the touch of a button, as well as enabling rapid-fire payments for live sports betting.
Skrill’s paysafecard brand is one of the largest pre-paid online voucher providers in Europe, enabling consumers without a bank account or credit card to purchase goods and services online.
“We thought they were out fishing for sprats and they have landed a whale,” said Ivor Jones, leisure analyst at Numis. “At a stroke, it brings a major competitor on board, sharply reduces [Optimal’s] exposure to Asia and brings credible venture capital investors on to the share register.”
Shares in Aim-traded Optimal were suspended on Monday morning after it announced the proposed acquisition, to be financed by a fully underwritten £451m rights issue plus existing cash and debt facilities, after which it will relist on the main market.
Skrill, which shelved plans for a £160m listing in 2011 and was once chaired by the former investment banker Bob Wigley, is majority owned by CVC Capital Partners. The private equity firm acquired a majority stake in the business for €600m from Investcorp 18 months ago.
“PayPal is the 800 pound gorilla in this industry, and while I’m not sure we’re in their rear view mirror yet, there’s room for a number two,” said Joel Leonoff, Optimal’s chief executive, adding that the deal was “a very significant acceleration of our business plan”.
As well as online gaming, the group has ambitions to target a greater share of the mobile payments market, although it faces stiff competition from tech giants Apple, Samsung and Google.
The space is rapidly consolidating as payment providers try to scale up as quickly as possible in the heavily regulated space. Last November, Skrill itself announced that it was acquiring another competitor, Ukash, in a deal that is yet to be completed.
Beneath it all is the growing dominance of smartphones in ecommerce and online gaming. “It actually sits on something more fundamental, which is the move towards mobile commerce. It’s the mobile ecosystem that’s emerging here,” said Robin Speakman, analyst at Shore Capital.
Digital wallets are an increasing necessity for online gamblers, who tend to play across multiple sites. Customers in “grey” markets, where online gambling is not formally regulated, also use wallets as a way of moving their money to gambling websites.
“In certain jurisdictions Visa and MasterCard are not available for online gambling,” said Gavin Kelleher, analyst at Goodbodys.
Mr Leonoff said that customers used their wallets as a “hub” to move money between websites like PartyGaming, PokerStars and 888.
Higher transaction speeds offered by digital wallets were crucial for live sports betting, he added: “If you’re watching a tennis game, you can bet whether a serve is going to be in or out, so it has to be really fast.”
The combined business would be well placed to target demand from emerging markets and the rapidly evolving mobile payments market, he said.
“We also cater to a very significant proportion of the world that is unbankable and doesn’t have the facilities to provide credit cards. We have helped the online gaming companies gain access to customers in South America where US-verified credit card payments were hard to obtain, which has greatly facilitated approval ratings.”
Optimal said it would acquire the entire listed share capital of Skrill for €720m cash and 37.5m new ordinary shares, after which parent company Sentinel Group Holdings would own nearly 8 per cent of the group.
Optimal said the deal had an enterprise value of €1.1bn, valuing Skrill at a multiple of 9.3 times earnings before interest, tax, depreciation and amortisation for the 12 months to September 2014, adjusted to reflect ongoing annual cost saving synergies of $40m, plus net debt of €256m.
The combined group would have annual revenues approaching $700m, and ebitda of $175m, Optimal said, diversifying its geographic exposure and customer base, offering over 100 payment types in 41 currencies and 22 languages. This would enable Optimal to “capitalise on expected growth in the North American regulated online gambling market,” the company added.
Optimal’s full-year results, released in tandem with its announcement on Monday, showed an 83 per cent increase in profit after tax to $57.7m on revenues that increased 44 per cent to $365m in the year to December 31.
The results were boosted by the acquisition of the Meritus and GMA businesses in the US last summer, plus a “significant” contribution from the World Cup.
Optimal intends to raise £451m through a five-for-three rights issue priced at 166p per share, a 60 per cent discount to Friday’s closing price of 419p, which has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets. Lazard additionally advised Optimal on the transaction.
Optimal said it had received “significant” shareholder support for the rights issue, including its largest shareholder Old Mutual which holds an 11.3 per cent stake.
If shareholder approval is granted at a general meeting on April 16, the new shares are expected to start trading on Aim a day later, with the acquisition expected to complete “in the third quarter of 2015”, the company said.
The company said the “transformational” deal would broaden its exposure to the “rapidly expanding online gaming sector” as well as the wider e-commerce world
The group has developed a payments technology system allowing gamblers to transfer winnings and place stakes across a range of gaming websites at the touch of a button, as well as enabling rapid-fire payments for live sports betting.
Skrill’s paysafecard brand is one of the largest pre-paid online voucher providers in Europe, enabling consumers without a bank account or credit card to purchase goods and services online.
“We thought they were out fishing for sprats and they have landed a whale,” said Ivor Jones, leisure analyst at Numis. “At a stroke, it brings a major competitor on board, sharply reduces [Optimal’s] exposure to Asia and brings credible venture capital investors on to the share register.”
Shares in Aim-traded Optimal were suspended on Monday morning after it announced the proposed acquisition, to be financed by a fully underwritten £451m rights issue plus existing cash and debt facilities, after which it will relist on the main market.
Skrill, which shelved plans for a £160m listing in 2011 and was once chaired by the former investment banker Bob Wigley, is majority owned by CVC Capital Partners. The private equity firm acquired a majority stake in the business for €600m from Investcorp 18 months ago.
“PayPal is the 800 pound gorilla in this industry, and while I’m not sure we’re in their rear view mirror yet, there’s room for a number two,” said Joel Leonoff, Optimal’s chief executive, adding that the deal was “a very significant acceleration of our business plan”.
As well as online gaming, the group has ambitions to target a greater share of the mobile payments market, although it faces stiff competition from tech giants Apple, Samsung and Google.
The space is rapidly consolidating as payment providers try to scale up as quickly as possible in the heavily regulated space. Last November, Skrill itself announced that it was acquiring another competitor, Ukash, in a deal that is yet to be completed.
Beneath it all is the growing dominance of smartphones in ecommerce and online gaming. “It actually sits on something more fundamental, which is the move towards mobile commerce. It’s the mobile ecosystem that’s emerging here,” said Robin Speakman, analyst at Shore Capital.
Digital wallets are an increasing necessity for online gamblers, who tend to play across multiple sites. Customers in “grey” markets, where online gambling is not formally regulated, also use wallets as a way of moving their money to gambling websites.
“In certain jurisdictions Visa and MasterCard are not available for online gambling,” said Gavin Kelleher, analyst at Goodbodys.
Mr Leonoff said that customers used their wallets as a “hub” to move money between websites like PartyGaming, PokerStars and 888.
Higher transaction speeds offered by digital wallets were crucial for live sports betting, he added: “If you’re watching a tennis game, you can bet whether a serve is going to be in or out, so it has to be really fast.”
The combined business would be well placed to target demand from emerging markets and the rapidly evolving mobile payments market, he said.
“We also cater to a very significant proportion of the world that is unbankable and doesn’t have the facilities to provide credit cards. We have helped the online gaming companies gain access to customers in South America where US-verified credit card payments were hard to obtain, which has greatly facilitated approval ratings.”
Optimal said it would acquire the entire listed share capital of Skrill for €720m cash and 37.5m new ordinary shares, after which parent company Sentinel Group Holdings would own nearly 8 per cent of the group.
Optimal said the deal had an enterprise value of €1.1bn, valuing Skrill at a multiple of 9.3 times earnings before interest, tax, depreciation and amortisation for the 12 months to September 2014, adjusted to reflect ongoing annual cost saving synergies of $40m, plus net debt of €256m.
The combined group would have annual revenues approaching $700m, and ebitda of $175m, Optimal said, diversifying its geographic exposure and customer base, offering over 100 payment types in 41 currencies and 22 languages. This would enable Optimal to “capitalise on expected growth in the North American regulated online gambling market,” the company added.
Optimal’s full-year results, released in tandem with its announcement on Monday, showed an 83 per cent increase in profit after tax to $57.7m on revenues that increased 44 per cent to $365m in the year to December 31.
The results were boosted by the acquisition of the Meritus and GMA businesses in the US last summer, plus a “significant” contribution from the World Cup.
Optimal intends to raise £451m through a five-for-three rights issue priced at 166p per share, a 60 per cent discount to Friday’s closing price of 419p, which has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets. Lazard additionally advised Optimal on the transaction.
Optimal said it had received “significant” shareholder support for the rights issue, including its largest shareholder Old Mutual which holds an 11.3 per cent stake.
If shareholder approval is granted at a general meeting on April 16, the new shares are expected to start trading on Aim a day later, with the acquisition expected to complete “in the third quarter of 2015”, the company said.
August 22, 2014
PayPal to process US igaming transactions
EBay owned payment processing operator PayPal is considering allowing customer transactions in US state licensed igaming territories.
The news that PayPal the world largest payment processor could allow payment transactions for US igaming customers was brought to light by Poker news website – Onlinepokerreport.com.
“Sources tell OPR that PayPal will start processing regulated US online #gambling payments in coming months,” OPR tweeted. “Handful of operators to start.”
The news of PayPal allowing US transactions will come as good news to state licensed igaming operators, who have been frustrated at the lack of third party payment providers willing to take transactions
At present, Skrill (formaly known as “Moneybookers”) is the top payment processor in the state of New Jersey. Neteller is the web wallet of choise for Nevada and Delaware.
The news that PayPal the world largest payment processor could allow payment transactions for US igaming customers was brought to light by Poker news website – Onlinepokerreport.com.
“Sources tell OPR that PayPal will start processing regulated US online #gambling payments in coming months,” OPR tweeted. “Handful of operators to start.”
The news of PayPal allowing US transactions will come as good news to state licensed igaming operators, who have been frustrated at the lack of third party payment providers willing to take transactions
At present, Skrill (formaly known as “Moneybookers”) is the top payment processor in the state of New Jersey. Neteller is the web wallet of choise for Nevada and Delaware.
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