The online gaming software developer acquired the Antigua-based online payments company specialized in integrated debit card solutions for a consideration of 40,000,000 shares (£3 million at the closing share price of 7.5p on 13 April 2006).
The acquisition of First Pay is a significant strategic milestone as IQL seeks to become a leading global provider of online payment processing services.
A major asset acquired pursuant to the First Pay transaction is a unique, long term payment processing agreement with the NetBet family of gaming companies, including World Sports Exchange (WSEX), an Antigua-based sportsbook. The payment processing agreement provides for WSEX to deliver $250,000,000 in payment processing volume to First Pay over the term of the agreement (three years) under certain terms and conditions. WSEX is one of the earliest entrants into the remote gaming business (1996) and operates one of the most successful internet sportsbooks.
First Pay was established by World Sports Exchange and its payment processing consultant, Sean Forward. Mr Forward, who has managed the payment and reconciliation operations of all of the NetBet companies for the prior four years, will assume an executive role at IQL. Mr Forward has recently relocated from the UK to Antigua where he has overseen the First Pay product launch, which went into live production in April 2006.
IQL, which has historically generated revenue from selling software to gaming operators, is now generating revenue from selling payment services to gaming operators. IQL has further diversified its sources of revenues by selling financial services directly to consumers for a fee. Through First Pay, IQL generates fees from debit cards, including ATM withdrawal fees, point of sale fees, transfer fees, monthly participation fees and a percentage of VISA interchange shared with the bank that issues the debit cards.
“The developments today reflect a fundamental shift in IQL\’s business model toward recurring revenue and toward sales linked to the dollar volume of transactions. Gaming is expected to continue a double digit, multi-billion dollar year over year growth and IQL is now poised to maximize its participation in this growth,” commented Mike Muscato, Chairman of IQ-Ludorum.
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