Mastercard buys payments group VocaLink in £869m deal

RBS has a 21.4% stake in VocaLink. Picture: Ian Rutherford
RBS has a 21.4% stake in VocaLink. Picture: Ian Rutherford
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Payments and cashpoint giant VocaLink is being sold to Mastercard in a deal worth up to £869 million.

Mastercard is snapping up a 92.4 per cent stake in the business for £700m, with a further potential £169m due if performance targets are met.

VocaLink runs services for banks, including Bacs, Faster Payments and Link cashpoints, as well as mobile app Zapp.

It is owned by a group of 18 banks, including Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland.

Edinburgh-based RBS, which has a 21.4 per cent stake in VocaLink, said it expects to book a pre-tax profit of about £150m when the deal completes.

READ MORE: RBS losses more than double to £968m in first quarter

The deal comes after the Payment Systems Regulator called in February for banks to sell their stake in VocaLink to “open the market and allow for more effective competition and innovation”.

It said at the time that banks should loosen their grip on the way payments are processed, with VocaLink processing more than 90 per cent of salaries, 70 per cent of household bills and almost all state benefits in the UK.

The Payment Systems Regulator said: “We will discuss developments with MasterCard and VocaLink and – where appropriate – with the relevant merger authority. Our main consideration is that the infrastructure delivers good outcomes for the people and businesses that use it.

“That discussions are taking place about ownership, and changes being made, is an encouraging sign that people are starting to question the status quo and ask whether it offers effective competition.”