Mastercard says the UK’s Competition & Markets Authority’s decision has cleared the way for the completion of the company’s planned acquisition of VocaLink.
The CMA gave final approval for the proposed set of remedies that address the competition concerns the CMA identified earlier this year. The deal is now expected to close in the coming weeks.
“We believe the future of payments will be defined by choice,” said Michael Miebach, chief product officer, Mastercard. “Adding bank account-based payments alongside our card network extends what we can do and how we can do it. Together, we’ll be one partner to meet all payment needs of businesses, governments and consumers.”
“We have the opportunity to extend everything that we’ve accomplished with cards to bank account-based payments and redraw the lines of what’s possible in commerce. We’ll make it more inclusive, by expanding access to electronic payments. We’ll break down barriers, by innovating across payment types and payment flows. We’ll make it faster, bringing additional real-time payment options to more places and across more devices,” Miebach continued.
Now that the regulatory review has concluded, Mastercard and VocaLink will work to close the transaction within the next few weeks. Upon closing, David Yates will join the Mastercard management committee and become executive chair of VocaLink. Paul Stoddart will be promoted to CEO of VocaLink.
“MasterCard’s acquisition of Vocalink represents a win-win for both companies,” says Tom Hay, head of Payments at Icon Solutions.
“VocaLink knows that payments processing is a scale game, and the only way to drive further scale is for it to pick up volumes in mainland Europe and beyond.
For MasterCard the rationale is twofold. VocaLink’s Immediate Payments System gives MasterCard a presence in non-card payments, and with its global reach and network of banks, would drive a level of market penetration that VocaLink could never achieve alone. The second reason is the Zapp system. Zapp has been struggling to achieve ignition, and MasterCard’s backing could provide the boost that it needs and provide MasterCard with a new route into UK debit payments, which Visa has dominated for years now.
As real-time payments become “the new normal” we may finally be seeing the convergence of card payment networks with non-card payment networks. A global MasterCard network offering real-time payments of both types is a force to be reckoned with.”