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MasterCard eyes expanded payment options, stronger UK market presence with VocaLink deal

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MasterCard eyes expanded payment options, stronger UK market presence with VocaLink deal

The planned all-cash of London-based VocaLinkHoldings Ltd. will allow MasterCard Inc. to offer new payment choices and a strongerfoothold in the U.K. market, MasterCard executives said during a conferencecall.

"This transaction will be an important componentof our strategy to participate in all types of electronic payments and paymentflows," MasterCard CFO Martina Hund-Mejean said.

VocaLink operates payments technology platforms,including BACS automated clearing house payment system, real-time FasterPayments Service and LINK ATM network, which could help MasterCard shift toelectronic forms of payment.

MasterCard Chief Product Officer Michael Miebach saidVocaLink's technology will give the New York-based company the ability to offera wider range of business-to-business and person-to-person payments andgovernment flows. He said MasterCard is particularly interested in VocaLink'scapabilities in fast automated clearing house payment as more and morebusinesses and governments are looking to use it to make and receive payments.

Miebach shrugged off concerns that additional paymentchoices could negatively impact the volume of MasterCard's core card-basedpayment transactions.

"Now, it has to be kept in mind that for years,we have been innovating and investing and making sure that card-based paymentis a safe and convenient way to pay. That is not going away. We do seesignificant growth potential," the chief product officer said.

Aside from expanding MasterCard's payments option, thedeal will also let it access a large part of the U.K. market.

"The acquisition of VocaLink will also allow usto play a broader and more valuable role in the U.K. payments market, a marketthat is strategically important for MasterCard and one in which VocaLink hasproven to be a critical player," Miebach said.