Banks make millions from MasterCard takeover deal

PAYMENTS and cash machine giant Voca Link is being sold to MasterCard in a deal worth up to £869m.

MasterCard is snapping up a 92.4pc stake in Voca Link for £700m, with a further potential £169m due if performance targets are met.

Voca Link runs services for banks including BACS, Faster Payments and Link cashpoints, as well as mobile app Zapp. It is responsible for about £6trillion of payments and 11bn transactions – more than half of all payments made in the UK.

It also processes more than 90pc of salaries, over 70pc of household bills and almost all state benefits.

The firm is owned by a group of 18 banks, including HSBC, Natwest owner Royal Bank of Scotland, Lloyds and Barclays.

But in February a review by the Payment Systems Regulator found that innovation and competition were being stifled by the dominance of the large High Street lenders. So they were ordered to sell off Voca Link.

Under this deal the banks will retain a 7.6pc stake for at least three years. Taxpayer-backed lender RBS is one of the largest shareholders, with a 21.4pc stake. The lender said it would see a profits boost of around £150m as a result of the sale.

Barclays said it would gain up to £133m for its 15.2pc stake, while the Co-operative Bank will get up to £28.3m for its 3.3pc shareholding.

Ajay Banga, president and chief executive of MasterCard, said: ‘We’re excited about the opportunity to play a bigger role in payments in the UK, a very strategic market for us.’

David Yates, chief executive of Voca Link, will join the MasterCard management committee after the deal. He said: ‘We will continue to focus on ensuring that the UK systems perform seamlessly.

‘At the same time, we’ll invest in further innovation to power competitive payments solutions for consumers and businesses around the globe.’

Chancellor Philip Hammond said the deal ‘shows that Britain remains an attractive destination for international investors’.