Paysafe aims at ‘stickier’ affiliate access

Paysafe aims at ‘stickier’ affiliate access

Monday, September 5, 2016 Posted by Andy McCarron
The C$40m buyout of Income Access holds significance for the affiliate sector

Paysafe says the acquisition of affiliate technology and services provider Income Access will enhance its overall offer in the online gambling space and make its offering “stickier” by embedding further the company’s existing relationships with online gambling operators.

Under the terms of the deal announced last week, Paysafe will pay an initial consideration of C$28m (£16.2m) for the business, with a further $12m (£7.0m) due in three instalments over the following 18-months.

Talking to, Lorenzo Pellegrino, divisional chief executive at Paysafe overseeing the Neteller and Skrill operations, said the deal brought with it a market-ready platform incorporating underlying technology, relationships and payment processing in one platform.

“It embeds our relationship with merchants as a preferred payment service provider for their affiliate payments and allows us to expand our collaborative marketing efforts to drive new customer acquisition,” he said.

David Bufton, finance director at major affiliate network iBusMedia which owns the PokerNews website, said the strategic sense of the move was clear. “With exposure to such a large affiliate user base, Paysafe can gain further exposure through the existing network and it also has a great opportunity where it can expose its payment processing products on a larger scale to operators, not to mention strengthening its negotiating position with operators,” he said.

The affiliate sector has seen some major moves in recent months with affiliate networks being the subject of corporate buyouts. In July, Cherry’s affiliate arm GameLounge bought Interclick for £1.1m, in April Swedish affiliate marketing firm Catena Media bought out AskGamblers while in March another Swedish company, Gaming Innovation Group, added both Magenti Media and Dutch affiliate firm Delta Network to its roster of networks.

Bufton suggests the Income Access deal reinforces the value that affiliates have in the marketplace but also indicates the degree to which the sector is evolving. “The affiliate space has changed significantly in the past few years, to the point where is it is much more difficult to start up as a smaller affiliate than it was five years ago due to the size of the major players in the affiliate industry, increased competition and also the shrinking margins that are available to affiliates,” he said.

“The bigger the ownership funnel widens, the bigger the scope to keep value within the organisation, and as more companies realise this, the more prevalent the corporatisation of the affiliate space will be.”

Income Access was formed in 2002 and has built up a formidable footprint in the affiliate space, providing technology and marketing services for a huge roster of affiliates and affiliate programmes. Income Access has long-standing relationships with the affiliate programmes at many of the largest operators including Coral, Sportingbet, Sky Betting & Gaming, PMU, BetVictor and Twin Spires.

Pellegrino said Paysafe views affiliate marketing as likely to become more important for operators when it comes to customer acquisition. “We see this channel growing continuously as new product; and in the tech and search tools that are being created,” he said. “Like the advancement of mobile traffic over the past few years – which opened up a whole new sector of affiliation partnerships - we will continue to see this channel grow and be a priority resource in the iGaming space.”

Totally Gaming says: The size of the acquisitions in the affiliate space in terms of financials may be relatively small but they are just as significant for the sector as the big mega-mergers taking place at the top end of the market. The Income Access buyout places Paysafe at the very centre of an evolving space and this move, tying itself closer to one of the most important channels for new player acquisition, gives it highly significant leverage with the operators.


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