The competition watchdog has raised concerns that a takeover of a payments system by Mastercard could have an impact on the Link cash machine network.
The Competition and Markets Authority has given Mastercard a week to tackle its concerns that its takeover of Vocalink will restrict the number of companies able to provide systems to Link, which operates more than 70,000 automatic teller machines (ATMs) around the UK.
Andrea Coscelli, acting chief executive of the CMA, said: “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.”
It was announced in July that the US card provider Mastercard would buy Vocalink, owned by a consortium of high street banks, for about £700m. At the time, Philip Hammond heralded the deal as showing international companies had confidence in the UK after Brexit.
Vocalink and Mastercard are two of three possible providers of services to Link, the CMA said.
The competition body did not find any concerns about the impact of the transaction on Bacs, the automated clearing service, or faster payments (FPS), which allows real-time payments between banks. It said there were many credible alternatives to Vocalink and Mastercard in these two areas.
Mastercard said: “We’re pleased to have the opportunity to address their one concern, regarding the Link ATM scheme, in the timeframe provided. This acquisition promises to bring greater choice and innovation to the payment ecosystem, enabling people, governments and businesses to pay the way they want to pay.”
The CMA said a number of industry participants had raised concerns with the transaction and it had investigated a number of theories of harm including loss of competition in payment infrastructure services to Bacs, FPS and Link.
The government has been trying to encourage competition in the mechanisms by which money is moved around the financial system, and has set up the Payments Systems Regulator to oversee the market.
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