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Yes, great article and yes, there is clearly a need for harmonization.  I was not aware of the W3C payments activity until I googled it but now I'm somewhat concerned about industry participation on the working groups.  Although Amex is widely represented, MasterCard is less so, and Visa appears to be completely absent!  Is this an issue?  As someone wedded to the EMV infrastructure and deeply involved over the years in EMV 3DS, I believe, rightly or wrongly, that it should be "embedded" or at least "seriously taken account of" rather than "killed"!

Surprise, surprise!

@Ketharaman:  I think there's still confusion over the so-called "take rate" - a term I've never come across before.

Just to be clear, MasterCard, like Visa and as far as I know like most transaction processing companies, charges its bank customers a transaction processing fee for every transaction processed which is normally a fixed amount per transaction and is typically a few fractions of a cent.  This is what should be compared with the Vocalink fee which from your figures I calculate to be 0.0165p per transaction (£182million/11billion).  I'd be surprised if the transaction processing fee rates were markedly different.

In addition, MasterCard charges its bank customers an assessment fee for the use of its brand - with similar sorts of rates.  But this should be compared with whatever is charged by FPSL, not Vocalink.

As a completely separate issue, MasterCard's bank customers charge their merchant customers a merchant service charge which is typically an ad valorum charge of 1-3%.  I think this is what you're referring to when you talk about "the much higher take rate of MC".  In fact MasterCard gets none of this merchant service charge and none of the interchange charge which contributes to it.

This is a complex and hugely misunderstood area so I'm not surprised you're confused :-).

This is a 

Anish - your piece is very well-argued and I agree that this is a highly significant development but my reaction is much more positive - see  MasterCard agrees £700m VocaLink acquisition (I commented too Ketharaman :-)).

I think David hits the nail on the head by pointing out that for any payments scheme there should be a separation between the technology or infrastructure provider and the branded business service.  As I understand it MasterCard would be acting solely as the infrastructure provider in this case - we're not talking about MasterCard-branded Faster Payments are we?  Also, I think we need to look at this as a global rather than just a UK development.  From this perspective MasterCard, as an infrastructure provider, already operates in a highly efficient marketplace characterised by intense competition amongst a handful of big transaction processing firms such as First Data, Equens, Visa of course, TSYS, Elavon, SIA-SSB, PBS, Six and so on, as well as Vocalink and MasterCard itself.  Hardly a monopoly!

Ketharaman - you're right to draw attention to pricing, but firstly, the ad valorum charges of 1%+ are what MasterCard, or more precisely MasterCard banks as the branded business service providers, charge for card payments - I believe Mastercard transaction processing rates are much lower and are transaction based rather than ad valorum.  Secondly, I've always thought that UK banks were missing a trick by underpricing BACS and Faster Payments - in effect giving it away for free!

So going back to David's point, I think it's up to FPSL and the UK banking community to make sure they develop BACS and Faster Payments into innovative and fairly priced payment schemes and if FPSL feels that MasterCard is the best infrastructure provider to meet this goal then so be it.  As David points out, they can always go out to tender again at a later date.

Interesting!  I agree with Bo.  IoT means new levels of e-ID and e-Trust.  I wonder if the answer lies in leveraging the global card payments network, underpinned by EMV chip technology.  It's already at the heart of mobile payments security.  Presumably all the "things" in the IoT will be chipped and will require some sort of PKI cryptography for the whole thing to work securely and reliably.  An extension of the existing EMV chip infrastructure may be just the job!

Yes, it's win-win for MasterCard in the UK now they're buying Vocalink.  They'll make money from both "pull" and "push" payments.

I agree with Ganesh.  This is a really smart move by MasterCard.  £700 million looks like a bargain.  I've always thought that much more could be done on the back of Faster Payments and MasterCard is probably just the right sort of company to do it - my guess is that new added value products will turn out to be the main revenue drivers in the longer term Ketharaman.  Branding will be interesting!

Yeah, and they typically have a surcharge of 12.5% for paying by card. Only an idiot would choose to pay this way.

Very entertaining post Elizabeth, but with an important message.  Namely that our industry is 90% about infrastructure, crumbling or otherwise - something which I suspect the current enthusiasm for "Fintech" sometimes loses sight of.

Please keep diving in Bill - you're absolutely right!  This Vinod Khosla is clearly an imbecile.  As several people have pointed out, NFC is enabled by EMV.  And although Ross Anderson and his Cambridge people have been scaremongering about EMV security for years (decades?) the number of actual EMV security breaches in the real world is as far as I know zero.