Yahoo Finance UK Banks Net Windfall From Payment Firm Sale
Mastercard is to pay up to £869m for payments firm VocaLink after UK banks were urged to sell their stakes in the business.
Under the terms, the world's second-largest payments network provider will pay an initial sum of £700m for a 92% stake - with a further £169m due if performance targets are met.
The sale follows a call by the Payment Systems Regulator (PSR) for VocaLink's owners, 18 banks including Barclays (LSE: BARC.L - news) , Royal Bank of Scotland (LSE: RBS.L - news) (RBS) and Lloyds, to sell their shareholdings to "open the market and allow for more effective competition and innovation".
VocaLink runs services for banks, including Bacs, Faster Payments and Link cashpoints, as well as the mobile app Zapp.
It is responsible for processing almost 90% of salaries, a majority of household bills and almost all state benefit payments.
It handled more than 11 billion transactions last year with a value of £6tn.
Its sale was welcomed, on a number of fronts, by Chancellor Philip Hammond who said it showed that "Britain remains
an attractive destination for international investors" in the wake of the Brexit vote.
He added: "The PSR recommended the UK's biggest banks sell their stakes in VocaLink to improve banking competition in the UK which will deliver clear benefits for challenger banks, fintechs (financial technology
companies), UK consumers and small businesses."
RBS said it was to net about £150m from the sale of its stake, Barclays (Swiss: BARC.SW - news) £133m and Co-op Bank £28.3m.
Ajay Banga, president and chief executive of Mastercard, said: "We're excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us.
"VocaLink is a unique company with outstanding technology, assets and people".
Mastercard said VocaLink's chief executive, David Yates, was to join its management committee on completion - expected early next year.
He said: "We will continue to focus on ensuring that the UK systems perform seamlessly.
"At the same time, we'll invest in further innovation to power competitive payments solutions for consumers and businesses around the globe."
