MasterCard enters exclusive talks over VocaLink takeover - Sky News

MasterCard enters exclusive talks over VocaLink takeover - Sky News

MasterCard has entered exclusive talks over a possible $1 billion takeover of VocaLink, the operator of the UK's Faster Payments system and Zapp mobile service, according to a report by Sky News.

According to the report, the 13 banks which are shareholders in Vocalink have approved a period of exclusivity within which Mastercard can negotiate a takeover of the company.

News of the talks come two months after the UK's Payment Systems Regulator (PSR) said banks should sell their stakes in VocaLink to help increase innovation and competition in the nation's critical payments infrastructure.

In the UK, VocaLink processes over 90% of salaries, more than 70% of household bills and almost all state benefits. Nearly every business and person in the UK uses its technology and last year the company processed over 11 billion transactions with a value of £6 trillion.

The PSR believes that the common ownership of VocaLink by a small number of banks is having a "negative impact on innovation and competition in the industry".

MasterCard is understood to be attracted to VocaLink’s Immediate Payments System, which is live in Singapore and has won deals in the US and Thailand, and the Zapp system, which would give the card scheme a new route into UK debit payments, currently a Visa stronghold.

The news comes just hours after Visa Inc was forced to amend the terms of its acquisition of Visa Europe, scrapping a planned earn-out in exchange for an extra EUR1.75 billion in cash.

With VocaLink also apparently in play, the UK's top banks could be sitting on a massive cash windfall.

Both MasterCard and VocaLink have declined to comment.

Comments: (3)

A Finextra member
A Finextra member 22 April, 2016, 15:10Be the first to give this comment the thumbs up 0 likes

Good timing for MasterCard to buy their future out! Does anyone think they (& similar others) can survive with antiquated plastics? Hail API's! A new world order is here!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 April, 2016, 19:18Be the first to give this comment the thumbs up 0 likes

"UK's top banks could be sitting on a massive cash windfall." Good. It will come to use if they're slapped with the next billion dollar fine!

Gerard Hergenroeder
Gerard Hergenroeder - Payments Shark - Millersvile 28 April, 2016, 23:26Be the first to give this comment the thumbs up 0 likes

This acquisition by MasterCard makes a lot of sense. MasterCard could become the most disruptive entity in the payments business. It enables them to hedge their existing business as they position for the next generation of payment solutions. This is clearly the most strategic acquisition in their history with potentially long lasting results.

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