Mastercard's $900 million acquisition of British payment company VocaLink is under fire, as the U.K.'s Competition and Markets Authority contends the deal will give the card network an unfair advantage in ATM-related negotiations.
VocaLink provides software for the Link ATM network, which covers about 70,000 machines in the U.K. and Europe. The CMA is worried this will result in reduced bidders for future contracts, since the combined Mastercard/VocaLink will leave only Visa as a viable competitor.
"The Link ATM network provides an essential service for millions of customers," said Andrea Coscelli, CMA's acting chief, in a release. "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."
VocaLink also powers Bacs, the clearinghouse that processes most of the U.K.'s government salaries and benefits.The CMA has given Mastercard and VocaLink until Jan. 11 to address its concerns.
In a statement, Mastercard said "the CMA noted that it has no concerns related to providing 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. This acquisition promises to bring greater choice and innovation to the payment ecosystem, enabling people, governments and business to pay the way they want to pay."
Master Card credit cards are arranged for a photograph in New York, Friday, February 9, 2007. Photographer: Daniel Acker/Bloomberg News.
While banks will likely increase near-term dividend plans, analysts and investors are more focused on the long-term outlook for capital requirements from regulators.
The Financial Technology Association — which had been granted the right to defend the Consumer Financial Protection Bureau's open banking rule after the bureau declined to defend it — filed a motion Sunday to preserve the rule.
Kevin Fromer, who has headed the Financial Services Forum since 2017, announced his departure Monday. Fromer transformed the Financial Services Forum to advance the interests of the largest U.S. banks.
