The U.K.’s VocaLink processes 90 percent of the nation’s salaries, 70 percent of household bills and nearly the entirety of state benefits — meaning there is basically no business or person in the entire country that didn’t use its technology in some capacity last year. All in, VocaLink processes 11 billion transactions with a net value of $8.4 trillion.
VocaLink is also owned and controlled by a small number of U.K. banks at present, though that is something the U.K. Payment Systems Regulator (PSR) would like to see change. It has recently noted its belief that banks ought to sell their stake in VocaLink in the name of providing more innovation and competition to the market.
“The evidence we have gathered shows that common ownership is hampering competition and the speed of innovation in the market. There needs to be a fundamental change in the industry to encourage new entrants to compete on service, price and innovation in an open and transparent way,” noted Hannah Nixon, PSR managing director.
The regulator, apart from the sale, is also advocating for a new procurement process for future payments networks that it believes will better allow for more competitive and transparent procurement.
“This will be an open, independently monitored process, based on best practice,” states the report. “It will be used as soon as an operator’s current contract with VocaLink comes up for renewal.”
The regulatory body is also recommending the introduction of a common messaging standard in the hopes that it will better even out the competitive landscape.
“Our proposals will increase competition and create more opportunities for challengers, FinTechs and other organizations looking to enter the market,” said Nixon. “This will create the conditions for greater innovation, which is in the interests of those that use the infrastructure services directly and the U.K. economy as a whole.”
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