According to the reports, U.K. Competition and Markets Authority said in a statement on Wednesday, January 4, 2017 that it is worried that Mastercard Inc. (NYSE:MA) takeover of VocaLink gives surge to competition worries, and is seeking actions from the companies to address these matters.
Meanwhile they have until Jan. 11 to suggest a solution, or the watchdog will refer the deal for an in-depth enquiry, it said.
Last year in July Mastercard Inc. (NYSE:MA) proclaimed that it was set to take over 92.4% of VocaLink Holdings Ltd. in an agreement prized at about $920 million. If the agreement concludes, a majority of VocaLink’s existing owners will keep a 7.6% stake for at least three years.
Furthermore MastercardU.K. Holdco Ltd., a subsidiary of Mastercard already possesses and functions credit and debit card schemes Mastercard, Maestro and Cirrus, and has also bid to source infrastructure services to U.K. interbank payment systems.
VocaLink’s technology offers the backbone for non-card transactions such as employer payroll deposits and consumer bill payments, handing out over 90% of salaries, more than 70% of domestic bills and almost all state benefits in the U.K.
VocaLink’s technology also unites the set-up of Britain’s automated teller machine network among its participating banks. VocaLink meanwhile posted $240 million in revenue last year and handled more than 11 billion transactions.
Moreover Vocalink is retained by a group of 18 banks and building societies, with the four biggest being Royal Bank of Scotland Group PLC, Barclays PLC BARC HSBC Holdings PLC, and Lloyds Banking Group PLC.
Following the deal was announced in last July the U.K. Payment Systems Regulator said the four largest stockholders of VocaLink should sell all, or part of their holdings in the structure provider if its takeover by Mastercard (MA) doesn’t go forward, to open up the market and lift competition.