A Better Alternative

DISC enables the trusted exchange of data in ways that reduce costs, improve security and allow individuals to control the ownership and use of their transaction and identity information.

Interview with Robert Kay in City AM

MasterCard response awaited to CMA concerns

The issue of competition in payments infrastructure will be not resolved by the CMA’s decision on MasterCard’s proposed acquisition of VocaLink.

The request to MasterCard from the Competition and Markets Authority (CMA) that it address potential concerns on the company’s acquisition of Vocalink will be revisited this week. The CMA has given Mastercard a deadline of 11 January to satisfy it that no further investigation into the impact of the deal is warranted.

Mastercard, for its part, welcomed the CMA decision. “The thoroughness of the CMA’s review reflects the significance of this deal and its potential for the industry,” said a spokesperson for MasterCard, who pointed out that the CMA has no concerns related to BACS or the Faster Payments Service, but only to the LINK ATM scheme. The CMA is seeking assurance that the merger will not reduce competition in service provision to cash machines using Link ATM technology.

In July, MasterCard announced that it had acquired Vocalink, which underpins an estimated £6 trillion of UK payments a year, including most salaries, household bills and state benefits. In addition to LINK, VocaLink operates payments technology platforms for BACS, the Automated Clearing House, and Faster Payments, the real-time account-to-account service.

Announcing the CMA decision, Andrea Coscelli, acting chief executive of the CMA, stressed the importance of LINK having “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.”

The LINK ATM network connects the UK’s cash machines and is recognised under section 184 of the Banking Act 2009 as an inter-bank payment system. Its membership includes the UK’s main debit and cash machine card issuers as well as all the main cash machine operators, both bank-owned and independent.


The alleged concern is over the ownership of one of the three credible providers of infrastructure services to LINK passing to one of the remaining potential providers. However, a market review in February 2016 by the Payment Systems Regulator, the sectoral regulator, already expressed concern that the collective ownership of VocaLink was having a negative impact on innovation and competition in the industry. “The Bacs, FPS and LINK interbank payment systems are currently owned by a relatively small number of banks, who also own the main infrastructure provider these systems rely on, VocaLink,” the PSR noted. “While this ownership arrangement has resulted in payment systems that are relatively robust and resilient, there have been concerns that it may limit competition and in turn limit innovation.”

Whether or not the CMA pursues further investigation of the MasterCard/VocaLink deal, the question of competition with LINK –rather than for services to LINK – will remain open. The PSR recently proposed mandating a competitive procurement process to enable new infrastructure providers with different technology to enter the market.