The Green Sheet Online Edition
April 12, 2010 • Issue 10:04:01
Prepaid profile: Neovia Financial PLC
The 'fun money' company
Online gaming is two sides of the same coin. On one side is the universe of massively multiplayer role playing games where gamers take on personas and enter virtual worlds; it is a multibillion dollar industry. But equally lucrative is the flip side of that coin: online games of chance, such as poker and bingo.
As a player on the online gambling side, Neovia Financial PLC has been "phenomenally successful" with its Net+ prepaid card, according to Dan Starr, Executive Vice President at the U.K.-based processor. "It's probably one of the bigger prepaid programs," he said. "We've put north of $170 million through our prepaid product last year, in terms of volume flow."
The MasterCard Worldwide-branded card works with Neovia's Neteller e-wallet. Neteller allows online gamblers to electronically transfer funds to a variety of gambling sites, such as SEGA Corp.'s SEGACasino and SEGAPoker, BSkyB Ltd.'s Sky Bet and Sky Poker, and BeatYa Online Entertainment Ltd.'s Yatzy Duel, Backgammon and Mahjong.
Online gamblers direct deposit funds into their Neteller wallets and go from one gambling site to another, winning and losing as they go. Neteller has over 100,000 active accounts, with between $70 million to $100 million sitting in those accounts and waiting to be spent, Starr said. Approximately half of Neteller users opt for the Net+ card, he added.
Starr sees a direct corollary in the expansion of Net+ card users in the last 12 months to the contraction in the amount of credit available to consumers. He said 70 percent of U.K. adults had access to credit cards in 2008; that figure plummeted to 62 percent in 2009. "If you haven't got a credit card to spend online, the next best thing is a prepaid account," Starr said. "So there's been a good uptick in interest in prepaid, and the access has shifted from credit accounts to debit accounts."
Starr pointed out that using game cards for online role playing is a one-way process - physical money is transferred into virtual currencies and used for game time or to somehow enhance virtual world experiences. "The ability to cash out as a consumer and take those virtual currencies into real money is quite difficult," he said.
But that is exactly what the Net+ card does. Gamblers can take their online winnings back into the real world via the cards for purchases over the phone, online or in person - and wherever MasterCard is accepted.
The Net+ card is also increasingly being used as a person-to-person money transfer service, enabling friends to reimburse each other for concert tickets and the like, Starr said. But the main purpose of Neteller and the Net+ card is for the spending of what Starr calls consumers' "fun money."
"[Neteller] is used quite extensively in the online gambling sector purely because people like to separate their household income from their fun money," he said. "You paid your mortgage. you bought your new shoes; you are left with your fun money; not in your jam pot, you want to stick it somewhere and spend it. And when you spend it, you're done."
The Net+ card helps protect consumers from the effects of online fraud as much as it helps separate necessary expenses from disposable income. Online fraud and identity theft are of great concern to consumers, Starr said. "So if you're shopping at a merchant that you don't like the look of or don't trust or have never been to before, what you probably don't want to do is put the debit or credit card tied to your bank account on it," he added. By putting funds on a prepaid card, all consumers lose is the disposable cash on the card in the event of online fraud, he said.
Playing to win
In January 2010, Neteller was chosen for the third year in a row as the Best Payment System for Affiliates at the iGaming Affiliate Awards in London. The affiliates noted that secure, fast, consumer-friendly payment systems are of primary importance. Germany-based online game developer Travian Games GmbH has 5 million players worldwide and recently integrated Neteller into its massively multiplayer online gaming sites. Ditto for Austrian-based Crafty Studios Game Development GmbH, makers of Devil Fight 2.
"Multiplayer video gaming wins, digital content wins," Starr said. "[We are making] great progress in this market so we are quite excited."
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