01 October 2016
Find out more

VocaLink ditches Sepa services

22 August 2011  |  16165 views  |  4 Sepa

UK payments processor VocaLink is abandoning its single euro payments area (Sepa) services, blaming "comparatively low" volumes for the project's instruments.

VocaLink has enthusiastically sought to take advantage of Sepa as a means of expanding its European presence, signing up some of the world's biggest banks - including ABN Amro, Bank of America, Citi, RBS and Santander - for its Euro CSM offering as early as 2007.

In 2009 the company secured £60 million equity capital investment from its bank and building society shareholders to accelerate the expansion before putting Fred Bär in charge of a new Euro services business.

However, uptake of both Sepa direct debits and credit transfers has been sluggish, prompting long and tortuous negotiations towards the setting of migration deadlines.

Despite the fact that these deadlines now seem on the verge of being set, VocaLink says it will make a "phased withdrawal of its Euro CSM and Sepa value added services".

"Whilst Sepa has been a positive development for Europe, volumes remain comparatively low. As a result, we have decided to realign our global products to reflect our customers' current priorities around immediate payments," says Marion King, CEO, VocaLink.

As part of the latest organisational restructuring, it is creating a 'global transaction services' team that under Marc Terry will "deliver a wide range of services to global customers and partners through its unique immediate payments expertise and leading presence in clearing and switching".
KeywordsSEPA

Comments: (4)

Keith Richbell
Keith Richbell - eftpos Payments Australia Ltd. (ePAL) - Sydney | 22 August, 2011, 23:28

Given the public ownership of many of Vocalinks shareholders, I imagine UK politicans will want to know just how much public money was invested in this failed service, and who will be held to account?

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
A Finextra member
A Finextra member | 23 August, 2011, 10:29

With the end-date coming, SEPA transactions for the EEA are inevitable. This move by VOCALINK seems a definate break with their previous strategy and widen the gap between their product offering and non-UK (potential) customers...which may have been the aim of its owners.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
A Finextra member
A Finextra member | 23 August, 2011, 11:42

Martin Wilson, then Head of Vocalink Ventures and now CEO of Luup, and Paul Taylor, now an SVP at Bank of America in London, were the main internal sponsors of this initiative, so it is unfair to mention Fred Bar and not to mention these others, since Fred inherited a situation that was already unpromising.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Philip McCarthy-Clarke
Philip McCarthy-Clarke - Market Gravity - LONDON | 24 August, 2011, 16:19

It's pretty easy to be wise after the event.

In light of a major regulatory change, it was entirely appropriate for one of Europe's largest processors to develop a strategy and service line for SEPA. 

The thing I can't understand is why now? The business committed serious funding and horsepower to growing its European business, and appears to have pulled the plug just when things could be about to take a turn for the better.

Sunk costs aside, the potential margins in exploiting real-time payments (and derived retail/mobile payments) should be much better than SEPA clearing operation could ever be. Ironically, success in this space (and therefore future growth) will be dictated by the organisations ability to convince it's UK shareholders to take the innovative services it develops.

Faster Payments has real gamechanging potential - but UK bank self interest may mean it is never realised.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Banks protest as EU committee waves through Sepa rules

Banks protest as EU committee waves through Sepa rules

14 July 2011  |  9885 views  |  0 comments
EBAday 2011: the Sepa journey nears its end

EBAday 2011: the Sepa journey nears its end

16 June 2011  |  8546 views  |  1 comments
EPC warns Brussels to keep its nose out of payments business

EPC warns Brussels to keep its nose out of payments business

14 March 2011  |  12344 views  |  1 comments
EC sets Sepa migration deadlines

EC sets Sepa migration deadlines

16 December 2010  |  15824 views  |  4 comments
ECB's Tumpel-Gugerell sets out Sepa resolutions

ECB's Tumpel-Gugerell sets out Sepa resolutions

29 November 2010  |  14683 views  |  2 comments
EC migration plans would 'derail the entire Sepa project' - EPC

EC migration plans would 'derail the entire Sepa project' - EPC

01 November 2010  |  8982 views  |  0 comments
Brits want 'Immediate Mobile Payments' - VocaLink

Brits want 'Immediate Mobile Payments' - VocaLink

25 October 2010  |  9774 views  |  0 comments
VocaLink restructures business for European push; CCO Wilson steps down

VocaLink restructures business for European push; CCO Wilson steps down

16 November 2009  |  11290 views  |  0 comments
Vocalink secures £60m shareholder investment

Vocalink secures £60m shareholder investment

05 May 2009  |  8444 views  |  0 comments
VocaLink completes Sepa direct debit pilots with three European banks

VocaLink completes Sepa direct debit pilots with three European banks

11 February 2009  |  9591 views  |  0 comments
VocaLink launches Sepa direct debit pilot with Austrian bank

VocaLink launches Sepa direct debit pilot with Austrian bank

15 September 2008  |  6042 views  |  0 comments
Equens and VocaLink establish Sepa interoperability

Equens and VocaLink establish Sepa interoperability

09 September 2008  |  9188 views  |  0 comments
VocaLink secures payments processing deal with Sweden's BGC

VocaLink secures payments processing deal with Sweden's BGC

11 October 2007  |  7484 views  |  0 comments
VocaLink signs 10 banks to Sepa services

VocaLink signs 10 banks to Sepa services

02 July 2007  |  10398 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Find out moreVisit i2cinc.comVisit VocaLink.com

Top topics

Most viewed Most shared
Ripple rudely gatecrashes Sibos partyRipple rudely gatecrashes Sibos party
11285 views comments | 35 tweets | 33 linkedin
BNP Paribas is working with clients on blockchain deploymentBNP Paribas is working with clients on blo...
8248 views comments | 15 tweets | 31 linkedin
Banks ready for real-world blockchainBanks ready for real-world blockchain
7196 views comments | 22 tweets | 29 linkedin
PayPal and Lenovo team on biometric authentication for laptopsPayPal and Lenovo team on biometric authen...
6841 views comments | 13 tweets | 16 linkedin
hands typing furiouslyCan Blockchain Prevent Money Laundering?
6356 views 0 | 24 tweets | 9 linkedin

Featured job

Find your next job