Voca and Link to join forces
Merging companies to keep core technology platforms separate
Vocalink will be Europe's largest payments provider processing over eight billion transactions a year
Payment services provider Voca and banking network operator Link have announced plans to merge, creating Europe’s largest processor of direct debit and credit transactions.
The new company, VocaLink, will process more than eight billion transactions a year.
The companies are already working together to build the infrastructure behind the UK’s Faster Payments initiative that will enable real-time payments by the end of 2007.
The new company has decided not to integrate its core technology platforms.
‘This merger is not about consolidation of ageing core technology platforms,’ said Marion King, chief executive of the merged company. ‘The focus is on using our separate capabilities for growth and innovation.’
The merger will create a company able to compete in a European market when Single Euro Payments Area (Sepa) is enforced in 2008.
Karl Shields, Link planning director, says the core technical platforms will remain separate because they are quite different.
‘Voca has an infrastructure based on non time-critical high-volume payments and ours is based on high-volume real-time processing with the ability to process up to 400 transactions a second,’ he said.
Shields says that IT systems at head office and support services will be integrated into a single IT platform.
Peter Rowell, chairman of technology merger specialist Regent Associates, says the main driver of the merger is scale.
‘In companies with identical businesses you would expect a drive for IT integration, but keeping core technology platforms is not unexpected here because Voca and Link are in slightly different sectors,’ said Rowell.
Gartner research director Alistair Newton says the merging of payment systems makes sense on a strategic level but it is not always the case with integrating core platforms.
‘If I was a bank relying on Link and Voca services, I would not feel comfortable if told they were integrating core banking platforms immediately,’ he said.
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