Mastercard thinks the U.K. is a jolly good place to do business. With its $920 million purchase of processor VocaLink, the card brand gets a firm owned by 13 U.K. banks that did 11 billion transactions in 2015, but that gaudy number might be the milk and sugar in the cup of tea that is a platform it coveted.
The same day Visa made an ACH-related move by partnering with PayPal so the two mega brands putting their money in bank accounts is no coincidence. ACH represents 50 percent of total electronic payment flows across the world’s 50 largest countries.
“VocaLink is one of the largest processors in Europe, but the real strategic value for Mastercard will come from the Faster Payments platform,” says Aite Group senior analyst Ron van Wezel.
Faster Payments technology uses Zapp, a mobile payments app for digital debit payments that should slot nicely with Mastercard’s contactless acceptance network as well as its overall Masterpass strategy (any payment, anytime, anywhere, with any device).
“The world is moving towards near real-time payments,” says van Wezel. “The technology platform is also operational in Singapore. ACH payments, and faster payments in particular, may become an alternative for card payments in eCommerce.”
The deal includes the U.K. ACH BACS, which aids direct payments among bank accounts; Faster Payments, which offers real-time, mobile and online payments from account to account; and the ATM switching network LINK.
BACS and Faster Payments play in the business to business, business to consumer, person to person, government to citizen, and consumer bill payment arenas, whereas Mastercard’s wheelhouse is C2B. VocaLink handles 9 of every 10 of the U.K.’s salary payments with direct deposit, and 70 percent of the the country’s household bills and government benefits.
So Brexit be damned, Mastercard is putting on the kettle.