After months of speculation, MasterCard has entered into a £700m ($920m) agreement to acquire VocaLink. VocaLink’s investors could also receive a potential £169m earn-out if performance targets are met.

Under the agreement, a majority of VocaLink’s shareholders, primarily UK-based banks, will retain 7.6% ownership for at least three years.

The sale process effectively kicked off in February this year when the UK Payment Systems Regulator Hannah Nixon recommended the UK’s biggest banks sell their stakes in VocaLink. She argued that such a sale would help to improve banking competition in the UK and deliver clear benefits to challenger banks, fintechs, UK consumers and small businesses.

Nixon said: “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.”

Italian payments group, SIA, and a number of private equity firms had also been linked with possible bids for VocaLink prior to MasterCard’s successful bid.

In an investors’ call following MasterCard’s acquisition of VocaLink, VocaLink CEO David Yates claimed that the company had “outgrown its UK bank shareholder base.”

Speaking to RBI, Chris Dunne, director of market development at VocaLink, expanded on Yates’ point.

He said: “I think David was talking about the success that VocaLink has been having recently in other markets. We have won a number of contracts to take the technology that we’ve been running here in the UK into other markets, such as Singapore.”

Mark Barnett, president of MasterCard UK and Ireland, explained the reasoning for the acquisition.

He said: “The best real-time ACH platform in the world is VocaLink’s. They proved they can take it internationally to a few markets and, with our global reach, we think we can take it to many more.

“In addition, there are a bunch of new value added services that VocaLink have added which, given where MasterCard is in the UK, makes it really important to scale that bit of business in the UK.”

Barnett isn’t the only one pleased with the deal. The UK’s Chancellor of the Exchequer, Philip Hammond, said that ‘MasterCard’s decision to buy VocaLink shows that Britain remains an attractive destination for international investors. Britain is and continues to be an open and globally facing country in which to do business.”

With the banks losing a huge chunk of their stake in VocaLink, there are worries that this will lead to increased costs to the banks, which would be moved onto consumers.

Dunne believed this to not be the case: “We have contracts in place to run the core service for 4-5 years and those contracts were fixed at the time of renewal. There is no additional cost or fee to the end consumer. Consumers benefit from most of these services for free anyway and that’s the nature of the payments ecosystem.”

One of VocaLink’s more promising products is Zapp, also known as Pay by Bank app. It has had a turbulent time with launch delayed more than once and its CTO, Ian Sayers, leaving to join Danske Bank. However, Barnett remains enthusiastic.

“Zapp is a fantastic e- and m-commerce solution. It reverses the logic of a payment so consumers push a payment rather than getting pulled. MasterCard can bring that solution to the POS market. We have 40 million acceptance locations globally. Combine those two things and I think you have a new payments proposition which is cheap, secure, simple, and smart. It is a real innovation,” Barnett said.

That’s a lot of expectation, but Dunne believed that ‘people will be using this very soon’, even as early as the beginning of next year.