Friday, January 19, 2007

Citadel, Others Follow NETeller in Flashing Their Heels

Boy, the sight of a certain few online payment processors rushing to the door was akin to watching a pack of pols flee a photo opportunity with just-identified members of the KKK.

Citadel Commerce (also including myCitadel and Citadel Checks), Central Coin and eChecks all bailed from the U.S. market in the day or two following NETeller's pullout. Or, more technically, they no longer offer financing channels between U.S. customers and known gambling sites; as with these sites, reports that they are completely out of the U.S. market are not quite accurate. They're still open to business for Americans, but they will not provide a transfer service to gambling sites.

All of these companies are either publicly traded or are housed in the UK or Canada, the perils of which we've outlined on several previous occasions. It is no surprise that they have pulled out; it's only the timing that's a matter of inconvenience.

Anyhow, we've entered what will be a contraction phase for online poker. There's no way around that, now, but I'm still not quite in the "sky is falling" camp outlined by a couple of other writers. Alternate funding methods will emerge, but it will take weeks or months to occur. In the meantime, the options are meager. Click2Pay is out there and works for some sites, ePassporte is preferred by Stars but has ghastly fees connected (and hence, I don't plan on using it), and a few others exist as well.

Perhaps you're not familiar with the fact that this has happened once already, with PayPal back in 2001. One of the curiosities is that the PayPal agreement with the Feds was prominently mentioned in the indictments against the NETeller founders. Far be it from me to insinuate that this is just another small factor in all of what's going down. Rest assured that when online poker reaches an expansion stage in the U.S. once again, PayPal will be firmly placed as the U.S. government's "recommended" choice of funding services. Call it a prediction, even.

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