From High Roller Guides

Neteller is an electronic money service owned and operated by the British company Neteller PLC Group. The company was founded in 1999 and has corporate headquarters located on the Isle of Man. Customers can use their Neteller accounts to transfer funds online and deposit from or withdraw into banks around the world. Language support is offered in thirty languages around the clock. Dealing primarily with online gambling sites, the online payment processor was relatively small until PayPal stopped accepting gambling-related transactions in 2002.

[edit] Company description

Neteller PLC is a publicly traded company on the London Stock Exchange Alternative Investments Market with a symbol of NLR. Its initial public offering was in April 2004. By the end of 2005 its stock price had increased approximately 300%. The company is also regulated by the UK government’s Financial Services Authority (FSA). The company operates e-wallets under the Neteller and 1-Pay brands, and credit card processing and debit card businesses under the NetBanx brand. Over 3,500 merchants accept payment via the company’s services across many industries[1].

Revenue for the third quarter of 2005 more than doubled to US$45million compared to a year earlier, while pre-tax profits increased from $13million to $26million. Neteller's market cap at the end of 2005 was over US$1.5billion.Yahoo Finance: Neteller Neteller acquired its 3 millionth customer in the third quarter of 2006.

As of March 2007, due to a legal dispute with the US government and uncertainty over the loss of its U.S. customer base, the company's shares have been suspended for several months.

[edit] E-wallet service

The company's core product is an e-wallet, similar to PayPal, but focused primarily on gambling merchants. The company makes no mention of gambling on its homepage [2], but many of its merchants are in the online gambling business.

The company is regulated by the United Kingdom Financial Services Authority [3].

[edit] Fees and services

According to Neteller's April 2004 AIM placement prospectus, 60% of its income is derived from merchant fees [4]. Of this income, up to 97% comes from 'transfer to' fees charged at a rate of up to 7% of the value charged to the merchant. The remaining 3% of the merchant income comes from 'transfer from' fees, for payments back to the customer, which are charged at up to 2.5% of the value, but often much less.

For users depositing by bank transfer, no fees are charged. Credit card users are charged 3.9%. [5] The company offers an Instacash service, charged at 8.9%, which debits money instantly from the user's bank account. Currently this service is only available in Canada and Australia, following the US action against Neteller (below). Users can use the instacash service to deposit to many online merchants. The merchants are charged negotiated fees that are less than the rates consumers pay. Many gaming sites choose to absorb the instacash cost for payments to their own sites, and thus, the cost is frequently not charged to the end user.

Neteller users can open their account in Canadian Dollars, Euros, US Dollars, or Pounds Sterling [6]. When making or receiving a payment that is not in the currency of the user's account, a rate of 1.9% is applied.

Users can make peer-to-peer transfers to other Neteller users. These are charged at 1.9% of the value transferred, with no maximum. Currency exchange charges are also levied where the peer-to-peer accounts are not in the same currency. US users are currently restricted from making peer-to-peer transfers [7] due to the legal action described below.

Neteller offers an ATM card. As the Neteller wallet is not a bank account, the card cannot be used to withdraw money directly from the neteller account - instead money must be first transferred to the ATM card online [8]. The account is denominated in USD or CAD, even if the user's account is in another currency, and so users without a USD or CAD Neteller account will pay the 1.9% currency charge when loading the card. A further charge is levied if the ATM used is not dispensing US$. Accordingly, the neteller card works out expensive for non-US and Canadian users. For US users, a $2 loading charge is levied, plus $1.50 for a withdrawal. Charges are made for declined transactions, balance inquiries, as well as for POS sales. Following the US action against Neteller, US users can no longer use the card [9].

Withdrawals are also available by simple bank transfer or cheque. Fees levied are typically about £2 flat for any size of withdrawal.