Yahoo Finance VocaLink Boss Nets £5m From Mastercard Deal
The chief executive of VocaLink will be handed a multi-million pound windfall from Mastercard's takeover of the British payments firm.
Sky News has learnt that David Yates, who will remain with the business following the deal, is in line to receive a payout of around £5m.
The bonanza will come after months of negotiations between MasterCard and VocaLink, which processed 11 billion transactions last year - more than half of all payments made in the UK.
The takeover , which could be worth up to £869m, will also crystallise useful payments to the UK's biggest high street banks, including Barclays (LSE: BARC.L - news) , Lloyds Banking Group (Other OTC: LLOBF - news) and Royal Bank of Scotland (LSE: RBS.L - news) .
VocaLink runs services for banks, including BACS, Faster Payments and Link cashpoints, as well as the mobile payments service Zapp.
The company is responsible for processing almost 90% of salaries, a majority of household bills and almost all state benefit payments.
Its sale, for which the Payment Systems Regulator had pressed in an attempt to boost competition, was welcomed by the Chancellor Philip Hammond, who said it showed that "Britain remains an attractive destination for international investors".
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".
Mr Yates 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."
Other parties, including Sia (Shanghai: 600009.SS - news) , an Italian payments group, and a number of private equity firms had expressed an interest in acquiring the British company.
The company was also behind the delivery of the Current Account Switch Service which launched in the UK in 2013, and which was hailed by ministers as a key element of plans to make the retail banking sector more competitive.
However, figures published this week showed that the rate of switching has slowed, which is likely to intensify the pressure on competition watchdogs to take more radical steps.
The quickening pace of cross-border consolidation in payments is being driven by a recognition that such infrastructure does not necessarily need to be owned along traditional geographical lines.
Under Sir John Gieve, the former Bank of England deputy governor who is its chairman, and Mr Yates, VocaLink has expanded abroad, signing agreements in Singapore, Thailand and the US.
News (Other OTC: NWSAL - news) of the VocaLink deal with Mastercard, which was revealed by Sky News in March, came just weeks after Visa Inc (Xetra: A0NC7B - news) was forced by regulators in Brussels to amend the terms of a takeover of Visa Europe to ease anti-trust concerns.
A VocaLink spokesman declined to comment on the payout to Mr Yates.
