Vocalink

{{Infobox company

| name = Vocalink

| logo = VocaLink Mastercard logo.png

| caption =

| type = Private

| traded_as =

| industry = Payments

| fate =

| predecessor = Voca Limited and LINK (UK)

| successor =

| foundation = {{Start date|2007|07|02}}{{citation needed|date=July 2013}}

| founder =

| defunct =

| location_city = Rickmansworth

| locations =

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| key_people = Keith Douglas (CEO)
Elizabeth Fullerton-Rome (Independent Chair)

| products =

| production =

| services =

| revenue =

| operating_income =

| net_income =

| aum =

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| equity =

| owner = Barclays plc, Nationwide Building Society and Santander (2.7%)
Mastercard (97.3%)

| num_employees =

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| location_country = United Kingdom

| homepage = [http://www.vocalink.com/ www.vocalink.com]

}}

Vocalink is a payment systems company headquartered in the United Kingdom, created in 2007 from the merger between Voca and LINK.{{cite web|title=Merger between LINK Interchange Network Limited and Voca Limited|url=https://www.gov.uk/cma-cases/link-interchange-network-ltd-voca-ltd|work=Office of Fair Trading|publisher=www.oft.gov.uk|access-date=15 May 2017}} It designs, builds and operates the UK payments infrastructure, which underpins the provision of the Bacs payment system and the UK ATM LINK switching platform covering 65,000 ATMs and the UK Faster Payments systems.{{cite web|title=Written evidence submitted by VocaLink|url=https://publications.parliament.uk/pa/cm201011/cmselect/cmtreasy/612/612vw08.htm|work=House of Commons|publisher=www.parliament.uk|access-date=14 March 2013}}

Vocalink processes over 90% of UK salaries, more than 70% of household bills and 98% of state benefits.{{cite web|title=Competition and Choice in Retail Banking|url=https://publications.parliament.uk/pa/cm201011/cmselect/cmtreasy/612/612vw.pdf|work=Pg10. Vol 3, Ninth Report of Session 2010–11|publisher=House of Commons Treasury Committee|access-date=15 September 2010}} In 2013 the company processed over 10.5 billion UK payments with a value of over £5 trillion.{{cite news|title=VocaLink Partners with BCSIS to Offer Immediate Payments in Singapore|url=http://www.prnewswire.co.uk/news-releases/vocalink-partners-with-bcsis-to-offer-immediate-payments-in-singapore-176190741.html|access-date=16 April 2013|newspaper=P Newswire UK|date=29 October 2012}} In July 2016 MasterCard purchased a 92% stake in the company, with the remainder to be held by UK banks for a period of three years.{{cite news|title=MasterCard swoops for Britain's ATM operator Vocalink|url=https://www.bbc.co.uk/news/business-36855983|access-date=21 July 2016|newspaper=BBC News|date=21 July 2016}}

Background

In 1968, the Joint Stock Banks Clearing Committee chaired by Dennis Gladwell, set-up the Inter-Bank Computer Bureau to modernise the existing paper-based standing order system. Secure electronic funds transfer between banks was introduced from later that year,{{cite report|page=10|edition=Vol 3|title=Ninth Report of Session 2010–11|publisher=House of Commons Treasury Committee|date=15 September 2010}} significantly reducing both the processing time and human error associated with paper-based transactions, particularly bulk payments.{{cite web |title=Bacs Ltd and Charteris in new initiative to help major Bacs users |url=http://www.charteris.com/news/2004/bacs-ltd-and-charteris-in-new-initiative-to-help-major-bacs-users |publisher=Charteris plc |year=2004}} In 1971 the company adopted the name "Bankers Automated Clearing Services Limited", soon shortened to Bacs, which was formally adopted as the company's name in 1985.{{cite web|title=Bacs Corporate History|url=https://www.bacs.co.uk/About/pages/corporateoverview.aspx|publisher=Bacs|access-date=15 May 2017}}

=Cruickshank Report=

In November 1998 HM Treasury commissioned a review of competition within the UK banking sector, to be chaired by Sir Don Cruickshank. Reporting in March 2000, [https://www.vocalink.com/media/1603/cruickshank_report_2000.pdf The Cruickshank Report] of competition within the UK banking sector recommended that:{{cite journal|title=The Cruickshank report on competition in UK banking: Assessment and implications|journal=Journal of Financial Regulation and Compliance|volume=9|issue=2|pages=161–170|date=1 June 2014|doi=10.1108/eb025071|last1=Wolgast|first1=Michael}}

Clearance scheme ownership and management should be split from infrastructure operation and delivery
Infrastructure management should be conducted on a commercial basis with fair and open access to third parties
A need for a low-cost way to transfer money quickly{{cite web|title=The Cruickshank report: Competition in the banking industry under scrutiny|url=http://competition.practicallaw.com/7-101-1508|publisher=Practical Law Company|access-date=14 March 2013}}

In response, on 1 December 2003, Bacs Payment Schemes Ltd (BPSL) was split from Bacs Limited. BPSL was established as a not for profit company with members from the banking industry, the purpose of which is to promote the use of automated payment schemes and govern the rules of the Bacs scheme. Bacs Limited owns the infrastructure to run the Bacs scheme. Bacs Limited was permitted to continue to use the Bacs name for one year, becoming Voca Limited on 12 October 2004.{{cite web|title=Bacs|url=https://www.bacs.co.uk/NewsCentre/Pages/FAQs.aspx|publisher=Bacs|access-date=16 April 2013}}

=LINK Interchange Network Ltd=

LINK Interchange Network Ltd was formed in 1985 to create interoperability between ATMs across the United Kingdom. It became an international network in the 1990s through connection with the MasterCard and Visa networks. In October 2002 LINK launched the first service that used ATMs as a retail channel, enabling the facility to top-up a mobile phone at an ATM, bringing banking and mobile phones together for the consumer.{{cite web|title=Top Up and Go|url=http://www.topupandgo.com/why-choose-atms.aspx|publisher=Top Up and Go|access-date=15 March 2013}}

Faster Payments Service

In 2005 a joint proposal from Voca and LINK was selected to deliver the payment-processing infrastructure for the Faster Payments Service, a near real-time interbank transfer for internet and telephone banking.{{cite news|last=Peachey|first=Kevin|title=How fast is faster payment plan?|url=http://news.bbc.co.uk/1/hi/business/7411338.stm|access-date=14 March 2013|newspaper=news.bbc.co.uk/|date=22 May 2008}}

After Voca's bulk processing was brought together with LINK's real-time payment switching, the companies agreed to merge on 2 July 2007 to form VocaLink.{{Cite web |date=2007-03-06 |title=Voca and LINK Announce Intention to Merge |url=https://www.theglobaltreasurer.com/2007/03/06/voca-and-link-announce-intention-to-merge/ |access-date=2024-03-28 |website=The Global Treasurer |language=en-US}} Since its launch in 2008, over 3 billion real-time faster payment transactions have been processed by VocaLink.{{cite web|title=OFT approves Voca-Link merger|url=http://www.computerworlduk.com/news/it-business/2893/oft-approves-voca-link-merger/|publisher=www.computerworlduk.com|access-date=14 March 2013}}

UK payments infrastructure

=Bacs=

Bacs provides two payment products to consumers:

Bacs Direct Credits, payer-initiated interbank transfers. VocaLink processes 2 billion of these payments every year, including over 90% of all UK salaries and 98% of state benefits.
Direct Debits, transfers initiated by authorised payees. Three-quarters of UK adults have at least one direct debit commitment; the average person has at least six.{{cite news|title=Late payments debt high enough to put UK SMEs out of business|url=http://www.sourcewire.com/news/74306/late-payments-debt-high-enough-to-put-uk-smes-out|access-date=14 March 2013|newspaper=www.sourcewire.com|date=28 September 2012}}

VocaLink provides the underlying BacsTEL-IP infrastructure for Bacs,{{cite web|title=Voca flicks the SOA switch - Voca has overhauled its IT architecture in preparation for pan-European payments.|url=http://www.information-age.com/technology/applications-and-development/273486/voca-flicks-the-soa-switch|publisher=www.information-age.com|access-date=15 March 2013}} which processes over 5.6 billion of clearing and settlement of automated payments a year,{{cite web|title=VocaLink|url=https://www.paymentsuk.org.uk/news-events/events/vocalink|publisher=The Payments Council|access-date=14 March 2013}} with a value of £4.2 trillion.

=LINK=

VocaLink provides the switching infrastructure behind LINK, the busiest ATM switching system in the world which switches over 3.5 billion card-initiated transactions from 130 million enabled cards annually.{{cite web|title=LINK - the UK ATM network|url=http://www.link.co.uk/about-link/|access-date=16 May 2017|archive-url=https://web.archive.org/web/20170430060357/http://www.link.co.uk/about-link/|archive-date=30 April 2017|url-status=dead|df=dmy-all}}

=Faster Payments Service=

VocaLink designed, built, and operates the infrastructure for the Faster Payments Service on behalf of the Faster Payments Scheme. Running in parallel with Bacs and CHAPS, launched in 2008 it enables interbank transfers in real-time. Since 2008, over three billion Faster Payments transactions have been securely processed by VocaLink.{{cite web|url=http://realbusiness.co.uk/article/15026-late-payments-debt-high-enough-to-put-uk-smes-out-of-business|title=Late payments debt high enough to put UK SMEs out of business|author=Vanessa Zainzinger|publisher=Real Business|date=28 September 2012|access-date=19 July 2014}}

Mobile payments

=Zapp=

VocaLink has developed Zapp, a function that will reside within mobile banking apps to allow users to make real-time payments to retailers when shopping online or in-store. The service will be open to all financial institutions, merchants, acquirers, and consumers when it launches in 2015.{{cite web|url=https://www.bbc.co.uk/news/technology-25727333|title=UK lenders to offer Zapp payments in banking apps|author=Leo Kelion|publisher=BBC News|date=January 15, 2014|access-date=July 22, 2014}}{{update after|2016}}

A Zapp payment works through secure digital 'tokens', which means that customers don't reveal any of their financial details to retailers. This also means that merchants do not need to store card details.{{Cite web |date=13 June 2016 |title=VocaLink, Zapp Bring Faster Payments to Retailers |url=https://www.fintechfutures.com/2016/06/vocalink-zapp-bring-faster-payments-to-retailers/ |access-date=28 March 2024 |website=Fintech Futures}}{{Cite web |last=Jaekel |first=Brielle |title=Mastercard looks to maximize mobile payments capabilities with VocaLink acquisition {{!}} Retail Dive |url=https://www.retaildive.com/ex/mobilecommercedaily/mastercard-looks-to-maximize-payments-capabilities-with-vocalink-acquisition |access-date=2024-03-28 |website=www.retaildive.com |language=en-US}}

Zapp has been developed by VocaLink who operate the UK payments infrastructure. VocaLink processes over 90% of UK salaries, more than 70% of household bills and 98% of state benefits. In 2013 VocaLink processed over 10 billion transactions with a value of over £5 trillion.{{Citation needed|date=March 2024}}

Zapp is backed by four UK high street banks, meaning 18m consumer accounts are potentially Zapp-enabled: HSBC, Nationwide, Metro Bank, Santander.{{Needs citation|date=March 2024}}

International payments infrastructure

On 12 July 2010 through EAPS, LINK opened all UK cash machines to the similar German Girocard scheme operated by Zentraler Kreditausschuss.{{cite web|title=UK ATMs open to German Girocard Holders|url=http://www.link.co.uk/media/news-releases/news-releases-archive/uk-atms-open-to-german-girocard-holders/|publisher=LINK|access-date=16 May 2017|archive-url=https://web.archive.org/web/20161229053208/http://link.co.uk/media/news-releases/news-releases-archive/uk-atms-open-to-german-girocard-holders/|archive-date=29 December 2016|url-status=dead|df=dmy-all}} Similarly the VocaLink agreement with the Pulse network allows Discover card and Diners Club International cardholders to use LINK ATMs.{{cite news|title=DINERS CLUB INTERNATIONAL CARDS GAIN ACCESS TO THE LINK ATM NETWORK|url=https://www.dinersclub.com/about-us/press/diners-club-international-cards-gain-access-to-the-link-atm-network|access-date=16 May 2017}} VocaLink also provides a gateway service to Visa, MasterCard and China Union Pay.

Between 2007 and 2012, VocaLink operated a Single Euro Payments Area clearing and settlement mechanism, participating as a member of the European Automated Clearing House Association. The service was discontinued as a consequence of the low participation of VocaLink's shareholder UK banks into the platform.{{cite web|title=VocaLink ditches Sepa services| date=22 August 2011 |url=http://www.finextra.com/news/fullstory.aspx?newsitemid=22884|publisher=Finextra|access-date=13 November 2014}}

In May 2008, VocaLink signed a deal with the Swedish Automated Clearing House Bankgirot, to outsource part of the Swedish payments system. This was the first time that the processing of a national payments scheme has been transferred to a non-domestic player.{{cite web|title=Bankgirocentralen BGC AB launches strategic partnership with VocaLink|url=http://www.bgc.se/templates/NewsPage____6813.aspx|publisher=BGC|access-date=15 March 2013}}

In March 2014, in partnership with BCS Information Systems, VocaLink launched an immediate payments service, Fast And Secure Transfers (FAST) in Singapore, enabling fourteen Singaporean banks to offer the ability to transfer funds between bank accounts in real time.{{Cite web|date=2014-05-08|title=VocaLink launches Fast payments service in Singapore|url=https://www.electronicpaymentsinternational.com/news/vocalink-launches-fast-payments-service-in-singapore-4262476/|access-date=2021-03-09|website=Electronic Payments International|language=en-US}}

Mastercard acquisition

In July 2016, Mastercard announced that the company would be acquiring Vocalink.{{Cite web |last=Lunden |first=Ingrid |date=2016-07-21 |title=MasterCard jumps into UK payments technologies, buys VocaLink for up to $1.14B |url=https://techcrunch.com/2016/07/21/mastercard-jumps-into-uk-payments-technologies-buys-vocalink-for-up-to-1-14b/ |access-date=2024-03-26 |website=TechCrunch |language=en-US}} The acquisition was completed in May 2017 for a reported $920 million.{{Cite web |last=Peyton |first=Antony |date=2 May 2017 |title=Mastercard's $920m acquisition of VocaLink officially closes |url=https://www.fintechfutures.com/2017/05/mastercard-gets-regulatory-approval-to-buy-vocalink/ |access-date=26 March 2024 |website=Fintech Futures}}{{Cite web |last=GTNews |date=2017-05-02 |title=Mastercard closes deal to acquire VocaLink |url=https://www.theglobaltreasurer.com/2017/05/02/mastercard-closes-deal-to-acquire-vocalink/ |access-date=2024-03-26 |website=The Global Treasurer |language=en-US}}