Tuesday, October 31, 2006

e-Wallets and Other Online Banking Services, Part I

Ineligibility for the Boy Scouts doesn't prevent me from appropriating their motto for the theme of this primer-style posting: "Be Prepared."

With that in mind, we'll spend a few million pixels running down the state of the e-wallet online banking industry, as it pertains to U.S. players and their pending abilities to fund online poker. Since it's clear that the methods used for online banking are changing, it behooves us all to know who's who and what's what, and how likely the conduit is to remain open to U.S. players.

As an aside, if one had a few thousand to spare, none of these matters are even a concern; it'd be much easier to start an offshore shell corporation, set up a trust-company ownership in a second country and a banking outlet in a third, and obtain debit and ACH cards on that well-buffered account as a way of buttressing against certain free-trade-obstructing barriers. And properly disclosed, it's all quite legal, too. But that stuff's out of my league, and likely yours as well, so we're stuck exploring more of the "common man" channels.

Let's get back on topic and check out a few of the e-wallet services, and let's get the bad news out of the way at the start:

1) Firepay (a division of FireOne Group PLC, incorporated in Great Britain) --- Already toast to U.S. consumers... and I personally say good riddance.

2) NETeller (incorporated in the Isle of Man, and also has offices in London and Canada) --- On the way out, sometime within the next 245 days. I expect it later rather than sooner, since I think NETeller, which relies primarily on online gaming for its economic existence, will bleed the existing market as long as it can before pulling out. (A couple of knowledgeable poker folks that I've checked with believe this, too.) There is some conjecture that NETeller will essentially spin itself off as a privately held business, and go through some island-banking procedures --- such as those in the Cayman Islands --- in its next incarnation. NETeller has announced its intent to comply with the U.S., yet it needs to do something to be able to survive; its dependence on the gaming sector is almost total.

3) Click2Pay (a division of Wirecard AG, incorporated in Germany) --- Curiously non-commital at this point. They'll likely be available short-term, and are indeed the "preferred provider" of a couple-of second-tier sites, but they may not be in the business of serving U.S. online gamblers past the 270-day window.

4) MoneyBookers (a division of Wirecard AG, incorporated in Germany) --- Already gone from the U.S. market in the Firepay sense.

5) Western Union (incorporated right here in the U.S.) --- It's listed on Poker Stars but it's not really an option for U.S. players, for multiple reasons. MoneyGrams might be able to be sent to third-party processors, but it's likely to be a small-scale solution, not a large-scale one.

6) eWallet Express (incorporated in Florida) --- I was hoping that eWallet Express might be one of the payment services that will fit the needs of U.S. online gamblers, but it seems as though the Florida incorporation precludes that, tribal status or no; eWallet Express is a division of Navaho Networks, Inc. They've been reported as planning n staying in the U.S. market, but I have questions on their ability ro privide banking-system connectivity.

7) ePassporte (incorporated in St. Kitts-Nevis-Anguilla) --- Interesting and indeterminate option. Bill Rini says this: "No clear indication from ePassporte though many sites have never allowed withdrawals from ePassporte because they are primarily a credit card-ish sort of solution." However, Compatible Poker says this: "The guy on the phone support said they will stay open after the 270 time period." ePassPorte is actually a pre-paid Visa debit-card solution, best as I can determine. It's not a great solution, but it is out there.

8) Central Coin (incorporated in the Turks and Caicos Islands, part of the British West Indies) --- Interesting. Part of the British Commonwealth, but not traded publicly, as far as I can tell. Again, Compatible Poker offers some positive news, reporting that "they will continue business as usual with no plans of closing to USA gamblers." Central Coin may well be a survivor, as it relates to the U.S. gambling market.

9) myCitadel/Citadel Checks/Citadel Commerce (Citadel Commerce Corp. is the parent company, and it is itself of a division of ESI Inc., a Canadian concern.) --- I tilt this one to the negative for several reasons: (1) They acknowledge the UIGEA and are non-committal about it; (2) their CFO resigned, announced on the same day the UIGEA was signed; and (3) most importantly, two Canadian-chartered banks are shareholders in the parent company. Despite this, they are still confirmed as accepting transactions for the time being, though it may well be a NETeller-type situation, where they're simply milking the market while they're preparing the next step.

10) InstaDebit (based in Toronto, and they also have U.S. interests) --- No statement from them as yet, but it's hard to imagine how they'll be able to stay in the U.S. online-gambling market after the 270-day window.

11) PaySpark (a division of CSC24seven.com, which is based in Cyprus) --- not much of a following yet, though I did see it listed as an option for some Microgaming sites, such as Royal Vegas Poker and Poker Time. This one has some interesting connections, but independent of the political stuff, I'd rate it as one of the most likely to survive.

12) ATMOnline (another Canadian-corporation division, this one out of Vancouver) --- Available now, but not likely to be there later on.

We'll have more in the next post, including additional e-Wallet services and some alternative payment solutions.

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