Mastercard’s Vocalink Fined $16 Million for UK Compliance Failure

The Bank of England has fined Mastercard-owned Vocalink $16.2 million for inadequate risk management.

The penalty, announced Wednesday (July 9), relates to the failure of the company — which provides real-time payments in the U.K. — to comply with governance weaknesses identified by the central bank in 2022.

It is the first time the Bank of England (BoE) has levied financial penalties against a financial market infrastructure company.

“Vocalink fell short of its obligation to have adequate risk management and governance arrangements when responding to the bank’s direction,” Sarah Breeden, the BoE’s deputy governor for financial stability, said in a news release. “Its failure to comply with that direction in full has resulted in a significant fine.”

According to the release, the BoE criticized Vocalink’s efforts to address the BoE’s requirements and found it had failed to comply with the bank’s wishes.

However, the fine could have been worse, the release noted. Vocalink was able to reduce its penalty by cooperating with the investigation, admitting to the compliance failure early and agreeing to settle the matter. Without these reductions, the fine imposed by the BoE would have been 20 million pounds, or $27 million.

“We are pleased to resolve this matter which relates to issues identified in 2020,” a Vocalink spokesperson said in a statement provided to PYMNTS. “Since then, we’ve delivered a number of improvements, as recognized in the bank’s final notice. The historic issues related to internal systems and controls had no impact on the service we delivered to U.K. consumers and businesses.”

In other real-time payments news, recent PYMNTS Intelligence Research finds a mismatch in the way financial institutions (FIs) approach this payment method.

According to the report “The Real-Time Leap: Closing the Gap Between Receiving and Sending,” a collaboration with TCH, financial institutions have enabled real-time payment receipt, although few give their customers the ability to send funds instantly.

“This imbalance limits the full potential of these advanced networks and leaves customer expectations unmet,” PYMNTS wrote earlier this week. “This year’s instant momentum will necessitate banks leaping from merely receiving to fully enabling send-and-receive capabilities. FIs that do not implement sending alongside receiving risk losing market share to competitors.”