NETeller report shows recovery

The Money

NETeller released its third-quarter report this week, showing that the company may have taken a big hit this year with its troubles in the United States, but its revenues are stabilizing again.

"The third quarter has demonstrated the resilience of the NETeller business and the results from our European and Asia Pacific businesses show that we are regaining the trust of customers and continuing to deliver innovative solutions to our merchants," said Ron Martin, NETeller president and CEO.

He also pointed out that geographic diversification remains a key part of the company's growth strategy, and the NETeller board continues to be mindful of regulatory concerns in certain markets.

"Our strong presence at EiG in Barcelona reiterated our commitment and focus to the online gaming sector, and I believe we are progressing well in one of our core mission objectives, to be the preeminent provider of payment solutions for selected markets in the online gaming sector," Martin said.

"The launch of the first phase of our global card program is proceeding as planned and we are on track to offer additional card-related services during the first half of 2008. The Board remains confident about the prospects for the business for the full year and beyond."

NETeller took a $149 million hit in the United States after its founders were arrested in that country and an investigation was brought against the company for helping facilitate online gambling in the nation.

NETeller started shutting down online gambling payment processing for U.S. residents soon after the founders, who were no longer affiliated with the company, were arrested. Later it settled the case by agreeing to pay millions to U.S. authorities.

Now the company is reporting that active customers are up 14%, from 83,627 in the third quarter of 2006 to 94,925 in this year's third quarter.

The overall revenue for the quarter actually saw a 75% decrease from last year's third quarter, but excluding North America from the numbers, there was some positive growth for the company. European revenues grew 19% and Asia Pacific revenue grew 40%.

According to the report, the NETeller Group made progress in the 2007 third quarter with its product development program and also in furthering its payment options.

"A key update introduced at the end of the quarter was a simplification of the sign up process designed to improve new customer conversions," said the company in a release.

"Other developments have included a flexible merchant rate plan, additional customer funds top up features, and a pilot of an affiliate program."

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