MasterCard has entered exclusive talks over a possible $1 billion takeover of VocaLink, the operator of the UK's Faster Payments system and Zapp mobile service, according to a report by Sky News.
According to the report, the 13 banks which are shareholders in Vocalink have approved a period of exclusivity within which Mastercard can negotiate a takeover of the company.
News of the talks come two months after the UK's Payment Systems Regulator (PSR) said banks should sell their stakes in VocaLink to help increase innovation and competition in the nation's critical payments infrastructure.
In the UK, VocaLink processes over 90% of salaries, more than 70% of household bills and almost all state benefits. Nearly every business and person in the UK uses its technology and last year the company processed over 11 billion transactions with a value of £6 trillion.
The PSR believes that the common ownership of VocaLink by a small number of banks is having a "negative impact on innovation and competition in the industry".
MasterCard is understood to be attracted to VocaLink’s Immediate Payments System, which is live in Singapore and has won deals in the US and Thailand, and the Zapp system, which would give the card scheme a new route into UK debit payments, currently a Visa stronghold.
The news comes just hours after Visa Inc was forced to amend the terms of its acquisition of Visa Europe, scrapping a planned earn-out in exchange for an extra EUR1.75 billion in cash.
With VocaLink also apparently in play, the UK's top banks could be sitting on a massive cash windfall.
Both MasterCard and VocaLink have declined to comment.