Skrill USA Vice President Joe Hall recently discussed problems with processing credit card payments in the US online gambling market, as well as his company's plans to expand into American jurisdictions. Hall said his company would like to have the 99% coverage it has in the European market. The company currently accepts payments and withdrawals at three New Jersey licensees: Virgin Poker, PartyPoker, and Tropicana.
Before the passage of the UIGEA, Skrill processed payments in most areas of the USA. In fact, it was the first online payment processor to receive approval from the FSA, back in 2001. At the time, Skrill was known by the brand name "Moneybookers". Joe Hall talked with NJ.com after it was announced that PayPal and Neteller, Skrill's biggest competitors, would return to the US gaming market. Both companies recently gained approval to enter the New Jersey Division of Gaming Enforcement.
The US Market Is More Complex than Europe
According to Hall, the US market is "more complex" than European payment processing, because of the myriad of federal, state, and local laws which companies face. Skrill's plan is to reenter the US market through a phased initiative.
Hall said, "Phase 1 was to launch our existing product into the newly regulated US market in a compliant way. Phase 1 was completed when we launched in NJ with PartyPoker, Tropicana and Virgin Casino."
That phase has occurred, and the payment processing server is entering a new stage of its initiative. Hall added, "Phase 2 is where we are today, and it's a critical piece, localising our product to a US audience. That means changing our tone, language, adding new payment options, adding a standalone US app, working with new US business."
To that end, the company has begun a corporate partnership with the World Poker Tour, which is still a popular television brand.
Easier Payments Equal More Gamblers
The reintroduction of the big name electronic money transfer services is a positive sign for the online gambling initiatives in New Jersey, Nevada, and Delaware--the three US states where online gaming is legal. People are less likely to gamble on a website, if it doesn't have their favorite payment service.
When people discuss reasons for the disappointing results from the New Jersey gambling industry, lack of payment methods is a top explanation. If a person has to open up an account and offer their banking and credit card information to a new company, they are less likely to gamble. They often back out of the transaction and find some other form of entertainment.
Credit Cards Decline
Players can use credit cards and debit cards, but studies show that Visa payments decline between 55% to 60% of the time in the New Jersey gaming market. This is seen as a fairly conventional number. MasterCard payments are somewhat better, but they decline between 25% and 30% of the time. American Express does not allow gaming-related transactions.
Under those circumstances, the most trusted payment methods are Neteller, Skrill, and PayPal. Many Americans have PayPal accounts, because it it the semi-official payment services for Ebay transactions. Ebay owns PayPal, and many merchants on the website won't accept any other form of payment. This compels many American bargain hunters to use PayPal, so it's the most widespread of the US-friendly web wallet companies.
Skrill and Neteller
Among those without such an advantage, Neteller and Skrill-Moneybookers are the next most popular. Neteller once was synonymous with online gambling. Nearly ten years after its 2005 legal troubles with the U.S. federal authorities, Neteller remains a major payment and withdrawal method, though it has diversified beyond the industry.
For years, Skrill has been the major competitor to Neteller in the global online gambling industry. The company began in Canada under the name Moneybookers, but it eventually was bought by Investcorp Technology Partners, a holding company out of the United Arab Emirates. By 2008, Moneybookers claimed to be used in every country in the world. They had 5.5 million customers.
Investcorp bought up many smaller rivals, while changing the name from Moneybookers to Skrill (originally to reflect the mobile gaming brand). In 2013, the company was sold to a London-based UK firm, CVC Capital Partners.
With the best payment methods all ready to join in the New Jersey online gambling industry, Internet casinos and poker rooms should bring in significantly more revenues. With the introduction of PokerStars and Full Tilt Poker to the market, the gaming revenues should max out for the state. People might finally see the full potential of New Jersey's gaming market tapped.
It might not be long before other payment methods work better, too. In 2015, payments via credit card could become more reliable. Speculation in in the industry suggests that Visa and Mastercard both plan on introducing a new MCC processing code, which should facilitate more efficient service.
