The floor is yours for an introduction into Neosurf and what the company does.
Neosurf have been around since 2004, in the same space as paysafecard and what was Ukash. A number of us in the team here used to be at Ukash, including myself. Our own payment method is an alternative payment method, in the gambling industry’s terminology. Local payment is something people use more now, which I’d much prefer. We produce prepaid vouchers essentially but we have our own technology and we’re across 58 countries. We reach customers that want to use Neosurf securely or even hiding – in a legitimate manner, not an illegal one – transactions of gambling on their bank account, sometimes from their spouses. We also reach into areas across 38 countries in Africa, where banking isn’t that easy, and we connect to wallets. We reach a local payment method and we deliver that into a number of sectors – the gambling sector is a significant one for us.
I come from Ukash; in between Ukashand Neosurf, I worked in lending at Wonga.
At the end of 2015, Paysafe had bought and killed the brand Ukash. And Nicolas [Saubié], who is the President of the company, saw an opportunity and realised we needed to put some real effort behind the commercial side. So we brought in a few Ukash people and lots of others – the business has grown exponentially. We now have a team of about 30 people in the UK, people in the US and Israel; France is still our headquarters. We’ve got people in Australia and we have a few offices in different countries, as well. We’re a very, very strong team, getting out there pushing as the alternative to paysafecard, doing really well and enjoying ourselves.
Can you tell us about the work you do with the esports sector?
It’s interesting because we’re talking about gambling here but one of the sectors we’re growing in is games. We went into esports sponsorship and I can’t begin to tell you how much we’ve learnt. We started with a UK team that became a bit too expensive as it’s a premier team – Excel. In January 2020, we did a Neosurf Cup for League of Legends.
The December before that, I was introduced to what the esports arena is, at the League of Legends World Championship in Paris, and I was blown away with the enthusiasm and the quantity of people. We now sponsor teams called the Dire Wolves in Australia. That’s been an amazing success for us; they’ve got teams across different esports. We’re looking forward tothe FIFA eWorld Cup that they’ll be taking part in. We’ve learned about the enthusiasm, the size of the audience, the involvement the audience gets. I now can follow a League of Legends battle but back in December I had no idea what I was watching! Then we’ve got the team K1CK, that’s got a Portuguese element with five different teams, and a League of Legends team in Poland. There is a growing crossover with esports and betting.
Payments are boring. We are a payments service but payments itself is boring. The only way we can really improve and help our clients is by understanding how to convert. So our payment mechanism has to be something that will convert into a deposit. By working with the esports side, it’s really helped us cross over to the gambling side in terms of understanding the consumer.
You’ve achieved growth in the area of cash payments. But this is an intriguing topic, because cashless is on the rise and a lot of commentators say cash is dead. What’s your take on this view, especially given the growth you’ve seen?
We’ve got some very interesting stats on it. Cash, at the end of the day, was our core proposition. It’s true that in certain countries cashless and more digitised is taking over. We’ve seen the growth go with that. We’ve seen a massive rise in online sales of our vouchers. We’ve done some data to analyse whether that is purely Covid-driven or whether it’s a pattern. You can see with gamers and the pattern of timing that it’s not just to do with Covid. Even in the UK, and France which is our first country, cash vouchers are still being bought. Whether people are using their cashless card in the convenience store during Covid, we haven’t got the full answer to that.
But in some countries cash is the only way. Most of us who sit in this industry and talk about it live in a country where we’ve got a card that can be tapped. The other day I needed to tip someone and didn’t have any cash on me – it made me giggle considering the business we’re in. But there are other countries that aren’t like that, so cash is still important. We’re building our position in the US – some people say we’re late to the game but I say no, we wanted to wait and see how things panned out. Someone told me cash isn’t really important in the US – but I think that’s wrong. It costs you dollar to breathe in New York.
I think PayNearMe are doing a really good service out there. We did a bit of research about prepaid cards – people are spending cash on gambling in America. But they’re going out and buying a prepaid card and then using that to deposit. It triggered to me when DraftKings decided to go into getting a prepaid card. It is still important – cash isn’t disappearing. However, there is a massive transition – about a third of our vouchers are issued digitally.
But cash definitely hasn’t died.
We certainly take your point about cash. But you have mentioned the trend of growth in digital, so how do you compete in this space given the heavy competition?
We bring two things here. We have more and more strength within our own digital service, so participating with the online distributors has really supported our position. It’s also our use of our Myneosurf wallet, by making that the best user experience and really learning how to make sure the consumer is looked after. I keep saying this but payments are boring and you’ve just got to get it right. You’ve got a whole lot of regulations and a whole process to go through. Less is more: simplicity.