Cardtronics will face some in-depth questions about its proposed multi-million dollar acquisition of Canada’s DirectCash Payments from the U.K.’s Competition and Markets Authority (CMA).
The world’s largest providers of non-bank ATMs (as Cardronics describes itself) agreed to buy DCP in a deal worth around $460 million in October 2016. Both firms have agreed to provide free-to-use and pay-to-use machines in the U.K. in places like supermarkets, convenience stores and pubs.
However, the CMA is not totally convinced after its initial investigation into the deal — and has voiced concerns that the merger could reduce competition enough in some areas to markedly increase costs for consumers looking to withdraw cash.
“Given the potential lack of suitable sites and the cost of supplying new ATMs, entry into these local areas by competitors would not be sufficiently likely to prevent an increase in fees,” the CMA noted.
The merger will now move on to an “in-depth phase 2” investigation, unless Cardtronics can find mitigations suitable to appease the CMA.
The CMA has had much payments-related regulation on its plate of late. It had previously successfully sought concessions from Diebold and Wincor Nixdorf in relation to their merger and Mastercard during its acquisition of Vocalink.