MasterCard has agreed to reduce the costs to the Link ATM network for switching infrastructure providers following a request from the Competition and Markets Authority (CMA).
The CMA announced that MasterCard’s $700m acquisition of VocaLink could face investigation unless it addressed the watchdog’s concerns.
These concerns were due to VocaLink and MasterCard being two of the three most credible providers of infrastructure services. Therefore, the merger would limit the ability of the Link scheme to obtain good value when tendering for an infrastructure provider.
Proposed solutions offered by MasterCard included:
- VocaLink making its connectivity infrastructure available to a new supplier of infrastructure services to Link. This could allow a competitor to use VocaLink’s connectivity to the Link ATM network, rather than building their own;
- Vocalink transferring or licensing to Link the intellectual property rights relating to the Link messaging standard, and
- VocaLink contributing to Link members’ switching costs.
MasterCard’s offer will be considered until the deadline of March 15 2017. If not accepted, the deal will be referred for an in-depth investigation.
In a statement, the CMA said: “The CMA has decided that there are reasonable grounds for believing that these proposals, or a modified version of them, might be acceptable to remedy the competition concerns it has identified.”