19 January 2018
visit www.ebaday.com

Watchdog questions Mastercard takeover of VocaLink

04 January 2017  |  17424 views  |  1 Mastercard logo

MasterCard's £700m acquisition of UK-based payment provider VocaLink has hit a snag after the Competition and Markets Authority (CMA) voiced concerns over the deal.

The CMA is concerned that the acquisition will give MasterCard too much of an advantage when it comes to bidding for contracts, specifically for the provision of services to the Link ATM network which accounts for 70,000 cash machines across the UK and Europe

VocaLink currently supplies the software for the Link ATMs but the CMA is concerned that there will be a reduced number of bidders to choose from when its service provision is next put out to tender. The CMA deems that VocaLink and MasterCard are two of just three credible providers - the third being Visa.

In addition, VocaLink also supplies software for Bacs, the automated clearing house which processes the majority of UK salary payments and state benefits.

"The Link ATM network provides an essential service for millions of customers," said CMA acting chief executive Andrea Coscelli.
"It's important that Link has a good choice of providers when it comes to supplying the necessary infrastructure so it can take advantage of the opening up of payment systems to competition. These concerns warrant a closer investigation in the event that Mastercard cannot address them at this stage."

The CMA has given MasterCard and Vocalink until January 11th to remedy the concern with one likely scenario being that the part of VocaLink that services the LINK network is spun off as a separate entity.

In a statement, Mastercard says: "In its announcement, the CMA noted that it has no concerns related to providing payment infrastructure services to BACS or the Faster Payments Service. We’re pleased to have the opportunity to address their one concern, regarding the LINK ATM scheme, in the timeframe provided."

The CMA's intervention, which  it says is a response to concerns from the industry, comes after the UK's Payment Systems Regulator, back in February 2016, suggested a new ownership structure for VocaLink, which is currently owned by a small number of banks including Barclays, Lloyds and HSBC, and a more open and transparent procurement process for payment networks.

Yet despite these concerns, MasterCard's acquisition plans were initially approved back in July.

Comments: (1)

Anish Kapoor
Anish Kapoor - AccessPay - Manchester | 04 January, 2017, 16:54

The proposed sale of Vocalink to MasterCard, threatens to kill innovation in UK Payments – This was my damning verdict back in AUG 2016. I put some thought into this whole acquisition back then and my reasoning for the statement above can be found in a Finextra blog post. Read it here: Selling VocaLink to MasterCard will Kill Innovation in UK Payments.

2 thumb ups! 2 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

MasterCard agrees £700m VocaLink acquisition

MasterCard agrees £700m VocaLink acquisition

21 July 2016  |  17250 views  |  15 comments | 36 tweets | 38 linkedin
MasterCard enters exclusive talks over VocaLink takeover - Sky News

MasterCard enters exclusive talks over VocaLink takeover - Sky News

22 April 2016  |  12632 views  |  3 comments | 26 tweets | 32 linkedin
MasterCard mulls £1 billion takeover of VocaLink - SkyNews

MasterCard mulls £1 billion takeover of VocaLink - SkyNews

03 March 2016  |  10956 views  |  8 comments | 23 tweets | 16 linkedin
Payments competition body says banks should sell stakes in VocaLink

Payments competition body says banks should sell stakes in VocaLink

25 February 2016  |  9595 views  |  5 comments | 13 tweets | 16 linkedin
VocaLink restructures business for European push; CCO Wilson steps down

VocaLink restructures business for European push; CCO Wilson steps down

16 November 2009  |  11774 views  |  0 comments

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.vasco.comvisit www.thomsonreuters.infovisit www.capgemini.com

Top topics

Most viewed Most shared
Europe begins Open Banking era in subdued styleEurope begins Open Banking era in subdued...
11022 views comments | 32 tweets | 37 linkedin
Crypto mining threatened by power capacity concernsCrypto mining threatened by power capacity...
10232 views comments | 17 tweets | 18 linkedin
Wells Fargo to close 900 branchesWells Fargo to close 900 branches
9843 views comments | 14 tweets | 16 linkedin
KFC introduces Bitcoin BucketKFC introduces Bitcoin Bucket
9327 views comments | 18 tweets | 16 linkedin
FinTech Scotland appoints new CEOFinTech Scotland appoints new CEO
8351 views comments | 8 tweets | 6 linkedin

Featured job

Germany, Austria or Switzerland

Find your next job