Mastercard is exploring the sale of a majority stake in its UK payments subsidiary Vocalink back to British banks. This move comes as the Bank of England has raised concerns about a critical national payments asset being under US ownership. Vocalink is integral to the UK's retail payment system, processing over 90% of salaries, more than 70% of household bills, and 98% of state benefits. Mastercard acquired Vocalink in 2016 for £701 million (approximately $937.38 million) from a consortium of British banks. A potential deal for a 51% stake is estimated to be worth around £400 million (approximately $534.88 million).
This potential sale is believed to be influenced by regulatory scrutiny and a desire to win future contracts. Last year, Vocalink was fined £11.9 million (approximately $15.92 million) by the Bank of England for failures in risk management and governance. The Bank of England has also voiced concerns regarding the lack of competition between Mastercard and Visa, which together dominate a significant portion of British retail payments. By divesting a majority stake, Mastercard aims to address these concerns and position Vocalink favorably for securing a lucrative contract to build and operate a new national payment platform.
DeliveryCo, an entity backed by several leading UK banks and payment companies, is considered a likely buyer. The sale back to British banks through DeliveryCo would allow domestic banks to regain strategic control over the payments system, mitigating regulatory worries about foreign ownership and systemic risk. Mastercard could retain a 49% minority stake, allowing it to continue benefiting financially from Vocalink's operations without triggering national security alarms or regulatory issues from the Bank of England.
