UK: MasterCard’s £700m takeover of VocaLink is in trouble with the competition watchdog

The UK’s Competition and Markets Authority is ordering changed to MasterCard’s planned £700 million takeover of London-based payments company VocaLink due to “competition concerns.”

The CMA said on Wednesday that “a number of industry participants have raised concerns … including loss of competition in payment infrastructure.”

The watchdog said it investigated and agrees that the deal would give MasterCard too great a control over bidding for contracts with the UK ATM network.

Both MasterCard and VocaLink provide services to the LINK ATM network, which accounts for 70,000 cash machines across the UK and Europe. VocaLink provides software to the network.

The CMA says MasterCard and VocaLink’s “merger would reduce the number of bidders and limit the ability of the LINK scheme to obtain good value when tendering for an infrastructure provider.”

The watchdog is giving MasterCard and VocaLink until January 11 to propose a remedy to its concerns before launching a full investigation. A likely remedy would be the selling off or spinning out the part of VocaLink that works with LINK.

Andrea Coscelli, acting CEO of the CMA, says in Wednesday’s statement: “The LINK ATM network provides an essential service for millions of customers. 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.

“These concerns warrant a closer investigation in the event that Mastercard cannot address them at this stage.”

Full Content: Business Insider

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