Mastercard has acquired British payment-technology provider VocaLink, following a string of innovations for its Masterpass mobile payment service, in a bid to even out adoption of the technology in all markets and become a top contender in the crowded space.

The financial institution will own 92.4 percent of the payments company and have access to its technologies for better digital and mobile pay capabilities. Mastercard is hoping to spread wider adoption in areas that mobile pay is less used with knowledge from other markets in which the technology is flourishing and relieves the financial service’s reliance on the U.S. area.

“Mastercard can bring brand, distribution and security features that some other providers lack,” said Sarah Grotta, director of debit advisory service at Mercator Advisor Group. “Mobile payments vary dramatically by geography and so Mastercard has acquired new mobile technology that may better align with the needs of some geographies.

“At the end of the day, just as we see with the existing ‘pays,’ ease of use, convenience and meaningful rewards will be a requirement,” she said.

Moving forward on mobile
VocaLink is a London-based payments platform provider that has developed the mobile payments app Zapp. Mastercard’s acquisition will likely give it fuel to focus on other markets than the U.S. for mobile payments and give it greater technology to provide better capability everywhere.

Mastercard is focusing on providing merchant and bank partners with technology that will allow more streamlined and innovative mobile payment capability. VocaLink’s technology focuses on speeding up the payment process on mobile, online and over the phone.

The financial institution also recently announced a wide range of capability for its Masterpass. Mastercard threw its hat into the ring of in-store mobile payments with Masterpass’ arrival at bricks-and-mortar locations such as BJs and Subway, in support of its hope to become a leader by tacking on vending machine connectivity, Cake Pay integration, messaging purchases and banking partnerships (see more).

Mastercard and mobile
With the mobile payments sector heating up, these latest offerings are only a few of what Mastercard has been launching to gain attention and adoption in the competitive market.

With consumers becoming more comfortable using mobile payment platforms for everyday purchases, MasterCard recently invited New York residents to buy items from a specific café with Samsung Pay in exchange for tickets to a Cold War Kids, Capital Cities or Years & Years concert (see more).

“The acquisition is likely focused on gaining products and expertise related to faster payments,” Ms. Grotta said. “The U.S. market today has been focused on ACH changes for Faster Payments and evaluating ClearXchange.

“This acquisition provides MasterCard a non-card product that can leverage the MasterCard network and bank connectivity,” she said. “In addition, this acquisition reduces its reliance on the U.S. market and broadens their product capabilities.

“Banks are most likely going to be interested in the new and improved MasterPass solution which is card based but may be interested in whatever Faster Payments solution MasterCard can bring to the U.S. market through this acquisition that leverages MasterCard’s existing bank relationships. Merchants may want to take a look at VocaLink’s ZAPP product which relies on ACH and by-passes the card network.”