Online payment processor Optimal Payments announced Monday that it has received approval from the UK’s Financial Conduct Authority (FCA) to acquire competitor the Skrill Group in a deal valued at $1.2 billion.
Both companies are major players in the online gaming industry, offering popular, easy-to-use e-wallets with which players can transfer funds to and from internet gambling sites. Old school players who have not ventured into the online poker arena in several years may not know either name, but they will certainly recognize their former identities: Optimal Payments was once Neteller, the former leading e-wallet in the industry before the UIGEA, and Skrill used to be Moneybookers.
In a press release from March, when the two companies originally agreed to the deal, Optimal Payments said:
The Directors of Optimal Payments believe that the acquisition will be transformational and value-enhancing for Optimal Payments and will create a leading payment and digital wallet provider with significant international scale and reach that is well positioned to capitalize on the substantial and growing payment processing and digital wallet markets, particularly within the rapidly expanding online gambling sector.
Optimal Payments Chairman, Dennis Jones, added:
We are taking advantage of an exceptional opportunity to acquire a business we know very well which, combined with Optimal Payments, will be a leading UK based online payments business with the essential scale necessary to be highly successful. These opportunities are few and far between. The Board believes this transformational transaction will be earnings accretive for shareholders from the first full fiscal year of ownership, will further diversify our client base and, additionally, will enable us to deliver enhanced services to existing and prospective merchants and customers in all of our global markets.
Skrill is accepted by virtually every licensed gambling site (though acceptance can vary by country), making it an excellent choice for online poker players to move funds in and out of the poker rooms. Skrill serves as an electronic wallet, a centralized location for players to keep money ready for future deposits. Players just link a bank account or credit card to their Skrill account and upload money as needed. Those funds then sit in the e-wallet until the player wants to deposit into an online poker room. When it’s time to deposit, the player just enters their Skrill account info with the poker room and the amount they want to transfer, and away they go.
One of the attractive things about Skrill is that fees are relatively low. For example, in the UK, it costs nothing to receive money, so cashouts from poker rooms into Skrill accounts are free. Fees for uploading funds into a Skrill account can vary. There is no charge when uploading from a bank account to Skrill, but there is a 1.9 percent charge for using a credit card. Withdrawal fees are relatively minimal – £2.05 to pull money out of a Skrill account to a bank account or VISA card.
Skrill can also be used at many non-gaming sites. The company claims that it is accepted at more than 156,000 online businesses, though most are not very well known. One big exception, though, is eBay.
