Neteller's name change to mark a new chapter
By Roger, Blitz, Leisure Industries Correspondent
The Financial Times
Published: October 9 2008
Neteller will today bury the final remnants of its chequered history as a pure payments provider for the online gambling industry by announcing that it is changing its name.
The Aim-listed online payment processor will from November 17 be known as Neovia Financial, marking what it hopes will be the culmination of a turnround from the grim days of January 2007 when its cofounders were arrested in the US on illegal online gambling charges.
Their arrests came in the wake of Congress passing a bill tightening anti-gambling laws, which banned banks and credit card companies from processing online gambling payments.
Its shares were suspended for six months and it was forced to pay back $94m (£54m) to customers in a settlement with the US department of justice. Its pre-tax loss for 2007 was $185.7m.
The newly named group will retain the names of its three main brand products - Neteller, Netbanx and Net+ - but Ron Martin, chief executive, said the new parent name was aimed at rebuilding its credibility with merchants, customers, partners and regulators.
"An element of the strategy is moving beyond the US situation," Mr Martin said.
After exiting the US market, Neteller quit its Canadian base, cut more than half its staff and regrouped round European and Asian markets. It pledged to end its dependence on online gambling for revenue, merging its payment gateway with e-wallet operations and launching a new card, Net+.
Last month, it reported interim profits of $1.15m, and said it was heading for a maiden dividend payment.
Its non-gaming revenues stand at 18.5 per cent of total income, and Mr Martin said it was ahead of schedule in targeting 30 per cent in non-gaming revenues by 2010.
"Gaming will continue to be an important part of the business, but on the other hand we have built a payment capability much beyond gaming and many products have an application outside of gaming," said Mr Martin.
He refuted the suggestion that the company was avoiding mention of online gambling. "If anything, our site has moved closer to gaming from an appearance perspective. In our rebranding of the Neteller wallet, it's reaching out to the poker player."
Mr Martin added that market conditions were causing customers to rein in discretionary spending, "but from a Neteller perspective, we are looking at a three-year game plan that we don't believe is going to be materially impacted by what's going on today".  |