A change in ownership may become necessary for payments company Vocalink as it faces mounting political pressure and a quest for funds to fuel expansion.
The UK’s biggest high street banks may relinquish ownership of the company behind Britain’s payments infrastructure, according to a Sky News report.
Sky News has learnt that Andrea Leadsom, the City Minister, and Mark Garnier, an influential member of the Treasury Select Committee, recently met bank executives and the boss of Vocalink to discuss the company’s future ahead of the launch of the new Payment Systems Regulator next spring.
Discussions have progressed as polticians such as Mrs Leadsom are understood to believe that independent ownership of Vocalink would be desirable.
The current system may be open to conflicts as interest as the government hopes small challenger banks will be able to have equal access to payments infrastructure. As it stands, the ownership of Vocalink is split between 17 banks, with the size of their shareholdings dependent upon their market size. The six biggest lenders, including Nationwide, the UK’s largest building society, also have representatives on the Vocalink board.
But Vocalink has been working towards innovation in the payments arena, launching smartphone app Zapp, which enables bank customers to pay for goods and services in-store and online using mobile devices.
Vocalink’s board wants to raise capital in order to expand more quickly, rolling out Zapp internationally with eyes on other international opportunities.
Whether Vocalink will end up selling a stake to a private equity firm, raising new debt, tapping existing shareholders for new funds, or – less likely – an initial public offering on the London Stock Exchange, is still unclear.
But as smaller banks and payments services start to make their mark in the payments industry, mostly by harnessing new ways to pay, the UK’s largest banks may have conflicting views over the benefits of their success.
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