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Show Me the Money

It might not be the most glamourous topic, but if you’re in any way an online gamer—and we’re assuming you are reading GOM—you want to know where your money goes once you click “all in”. So Carmine Frisk looks into the current climate of payment processing with three heavy hitters in the industry, guaranteed to give you peace of mind.

Payment processing is at the same time a necessity, when it comes to online gaming, and hopelessly dull. It’s not exactly part of your A game repertoire at the bar, we hope, but when it comes to the millions who depend on smooth, trustworthy payment transfers, it’s our responsibility to keep you up to date on the leaders in the fundamental engineering integral to online gambling. Still with us? Good. So below we cornered a handful of giants in the field—Moneybookers, Neteller and Ukash—and on behalf of all our readers, we dish out the questions on what’s happening in the overlooked and taken-for-granted world of the nuts and bolts that keep the industry humming, and, hopefully, your bankrolls sturdy.

Moneybookers
Lorenzo Pellegrino, head of gaming sales and account management.

How can you break down your demographics?
Gaming shows a strong male demographic, aged 35-40. But with the growing online bingo sector, the female demographic is starting to grow. But since Moneybookers is largely diversified with most of its five million account holders using e-commerce or P2P money transfer services, the customer base varies widely in terms of age, gender and nationalities.

What have been the major challenges in the payment processing industry this year?
Our top priority is security and our sophisticated systems allow us to minimise risk for our account holders and merchants all over the world. The second issue is converting customers into active and paying customers. Our focus has been to constantly increase the conversion rate and facilitate customers to send and receive money with minimal steps with the highest possible security.

Why are you unique? What sets you apart from the competition?
As well as having the widest network of local payment options in the most countries available, we also offer VIP support, no chargeback guarantee, five million existing customers with customer service in 12 different languages and the highest and very quick conversion.

Who are your biggest competitors?
We are very fortunate that no other player in the industry is currently growing as fast as we are. There are a number of very good payment service providers but the majority, however, offers pure processing services. We believe that we have the best competitive offer in the market.

Where are your biggest markets?
Moneybookers largest market is the EU, however we are getting stronger in Asia and Australia as well. Moneybookers’ next big thing will be the expansion into Latin America and selected countries in Africa.

How did you weather the storm after UIGEA was passed in October 2006?
Moneybookers’ core focus has always been the European gaming market; we didn’t have any business in the US. When UIGEA was passed, the Moneybookers business model got much stronger. Although the new law has had an adverse affect on the gaming industry, generally speaking, Moneybookers felt a positive effect, which enabled us to acquire additional business.

Do you see a day when the online gaming market in the US will open up again?
It’s hard to say. There are too many factors are involved. The growth of the online gaming industry has been explosive, and there is certainly a chance in our perspective that there will be a shift in the US at some point in time. We will wait and see.

How is technology evolving to make payment processing more streamlined?
We’re constantly devising innovative new products and technology to streamline. Our recently developed ‘split gateway’ allows online merchants to process payment all over the world by integrating only one solution. Offering over 50 domestic payment options in over 35 countries is what Moneybookers is renowned for. Our ‘fast registration’ innovation also offers users to upload funds for the first time with minimal detail swap, and to pay-in quickly and effortlessly with the high security.

When people are skeptical about payment processing companies, how do you alleviate their concerns and convince them of trustworthy service?
Our solutions are developed with the same demands on security and performance as mainline banking institutions and online stock-trading services. With a Moneybookers virtual wallet, customers no longer need to give personal information to lots of different websites, minimising risk of ID theft. Plus, we’re regulated by the FSA.

Neteller
Dan Starr, VP marketing and sales

How can you break down your demographics?
In the gaming segment, our customers are generally 18-40, married male high rollers with no children.

What have been the major challenges in the payment processing industry this year?
For all ethical payment processors such as Neteller, it has been helping merchants navigate the changing regulatory payments environment in the gaming segment.

Why are you unique? What sets you apart from the competition?
For merchants, it’s our ability to bring a large number of well-funded and motivated consumers to their business, plus and service and support that is always available and flexible to their needs. For consumers, it’s our ability to help them move and manage their money online with no problems.

Who are your biggest competitors?
Consumers always fish in their pockets for credit or debit cards when they want to pay. The problem is that online, your card number is a fraudster’s gateway to your money. The Neteller e-wallet acts as a secure and private buffer between a consumer’s household accounts and their leisure funds. We believe it is a better solution for both consumers and merchants to pay and get paid online.

Where are your biggest markets?
Europe is our biggest market, followed by Asia.

How did you weather the storm after UIGEA was passed in October 2006?
The uncertainty that the UIGEA introduced was clearly a difficult time for the whole industry as well as Neteller. A lot of water has passed under the bridge since then. We are a very different company now and it all seems a long time ago.

Do you see a day when the online gaming market in the US will open up again?
We can’t comment about the US, but are very happy that most global markets are moving toward regulation, which allows better protection for both consumers and merchants.

How is technology evolving to make payment processing more streamlined?
I think you’ll see a lot from Neteller over the next 12 months. Like the Bionic Man, we are rebuilding the service to make it better, faster and stronger. We’ve already made a number of changes this year, but both our members and merchants will see significant new things in the back half of the year. We can’t say more at this point, but stay tuned.

When people are skeptical about payment processing companies, how do you alleviate their concerns and convince them of trustworthy service?
Every merchant in every industry uses a payment processor to handle their payments, from airlines to music stores but most of them go unseen. Consumers, in fact, prefer that a payment specialist is handling their card and financial information rather than the merchant themselves. A payment processor can undertake the highest level of privacy or compliance handling. For online purchases, consumers have a stronger preference that data is held securely by a trusted third party because often they don’t know the merchant’s reputation. The Neteller Group is highly trusted and regarded in the payments space due to our track record, and by the very fact that we are regulated and compliant.

Ukash
Mark Chirnside, CEO.

How can you break down your demographics?
The genuinely unbanked, those without mainstream credit or debit cards; those nervous about using their cards online or those who prefer to use cash.

What have been the major challenges in the payment processing industry this year?
Persuading operators and merchants that alternative payments of all kinds can be the way to reach new consumers, and reassuring those existing consumers who are increasingly nervous about the risks of using debit and cards online.

Why are you unique? What sets you apart from the competition?
Ukash is free of charge to the consumer, we assure payment to the merchant and we’re FSA regulated.

Who are your biggest competitors?
Paysafecard in Germany.

Where are your biggest markets?
The UK, Spain and Germany.

How did you weather the storm after UIGEA was passed in October 2006?
Ukash wasn’t available in the USA so this wasn’t an issue. However we have been able to help operators that were affected to expand their European business through expanding their acceptance of Ukash.

Do you see a day when the online gaming market in the US will open up again?
Yes.

How is technology evolving to make payment processing more streamlined?
Innovations such as UkashMobile and UkashOut are both attracting serious attention from gaming operators because they make it much easier and much more cost efficient to get funds in and out of the player’s account using one XML-based technology.

When people are skeptical about payment processing companies, how do you alleviate their concerns and convince them of trustworthy service?
Being FSA regulated, with an Electronic Money Institution licence, helps give Ukash credibility while we aim to deal openly and transparently with all of our merchants and consumers.
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