After launching the Masterpass mobile payment app for retail stores last week, payment giant Mastercard today announced it has agreed to purchase a majority stake of U.K.-based VocaLink for up to $1.14 billion.
In the all-cash deal, Mastercard will pay $920 million for a 92.4% stake in VocaLink and an additional $220 million if performance targets are met. The outstanding 7.6% share of VocaLink will remain in the hands of its 13 bank shareholders.
The acquisition is expected to offer Mastercard a stronger footing in the United Kingdom where VocaLink processes more than 90% of salaries and more than 70% of household bills. In 2015, the company processed 11 billion transactions and its revenues totaled $240 million. Once the deal is complete, VocaLink CEO David Yates will join the Mastercard management committee.
Mastercard told TechCrunch that the deal is unrelated to Brexit. “As you can imagine, it has been worked on for many months,” a spokesperson said. “MasterCard has been keen to acquire VocaLink for many months before the Brexit vote even took place. Brexit isn’t a factor in this transaction.”
This news comes a week after the New York-based company’s July 14 event that unveiled an enhanced version of the Masterpass digital payments service along with Mastercard’s new logo which features a lowercase c to signify the company’s transition from physical cards to digital payments. The expansion of Masterpass allows consumers to make contactless payments at more than 5 million brick-and-mortar stores in 77 countries.
Masterpass is partnering with multiple banks to allow consumers to use online banking credentials to log into the Masterpass Wallet. The company is also partnering with Pizza Hut Asia, Cheesecake Factory, ShopRite, JetBlue, mobile ticketing-service Masabi, and says there are more to come.
Mastercard anticipates consumers will reach for their phones instead of their wallets at the point of sale. This concept, while now made possible with the availability of Masterpass, ApplePay, Samsung Pay, Wells Fargo Wallet, ChasePay, etc., has yet to take hold.
At FinovateFall 2014, Mastercard took the stage to launch Mastercard Pay with Rewards, a solution that allows cardholders to redeem points at the point-of-sale. The company presented its Developer Zone at FinDEVr San Francisco 2014.