UK payments and clearing network Voca is merging with Link, operator of the country's cash machine network, to form a European payments processor that will handle over eight billion transactions a year.
Voca - which was formerly known as Bacs - currently processes 90% of the UK's salaries and 15% of Europe's automated payment volume, while Link operates more than 60,000 cash machines across the UK.
The two groups, which are both owned by banks, say the new combined business - called VocaLink - will be one of the leading payments processors in Europe and will offer a broad range of services for both cash machines and automated payments.
The groups are already working together to develop a platform for the UK's Faster Payments initiative that will deliver real-time payments to the market by the end of the year.
The merger will also create a payment processor ready to compete on a pan-European scale when the Single Euro Payments Area (Sepa) in introduced in 2008. The first offerings from the new company will include Sepa-ready and real-time payment services designed to accelerate domestic and cross-border payments.
Under the terms of the proposed merger VocaLink will be managed through a new board including independent non-executives, but the busines swill be headed by current Voca chief executive Marion King, while Peter Presland, Link's current chairman, will assume the role of non-executive chairman.
Commenting on the merger proposal, King says: "The operational and intellectual synergies are clear. The move will create the broad product portfolio needed to compete in a wider European market in light of the introduction of Sepa."
Listen to Marion King explain the merger and the organisation's European strategy in an exclusive interview with Finextra: Finextra audio