How far will Zapp go?

After the speculation came the deal, then the flurry of media coverage.

How far will Zapp go?

What next for VocaLink, under MasterCard? And is it really all good news?


The potential is far-reaching, with Master­Card’s global footprint and VocaLink’s world class real time payments innovation, to mention but two lucrative resources the scheme and system operator now share.


The next thing to mention is of course Zapp. MasterCard provided the spark needed to get Zapp off the ground. As David Yates, CEO VocaLink and now on the management com­mittee team at MasterCard, says, “It had been a chicken and egg scenario; the banks saying ‘show me the merchants and the merchants saying show me the banks’. Well, I now have a fully fledged chicken and the banks are jumping on board.”


Yates confirms said chicken was indeed going to be deployed globally, subject to re-branding. The Link name will not be used in any way at all; VocaLink will remain a brand but the Zapp brand will be reinvented.


“We will have to think carefully about how to reposition that,” Yates adds. He feels the key differentiator for Zapp is the real time billing and invoicing capability. And the e- and m-commerce offering.


Zapp is the focus going forward, being the ser­vice that can be deployed on the fast and open pay­ments system VocaLink has developed and honed in key advanced markets such as Singapore, Swe­den, Thailand and the US. There was a time when their UK Faster Payments system was best in class; well, fast forward five years and Faster Payments will be brought up to speed, as it were. And this straight from the horse’s mouth.


The all new, souped up version will be, as in the other four aforementioned markets, an ISO 20 022, open standard real time credit and debit system with ‘request to pay’ functionality, capable of handling big data.


At present in the UK we only have a real time credit system, not an open system standard. Before it reaches these shores, in less than five years’ time, it will most likely have been launched in other countries, says Yates.


“The hottest markets for us right now are all the way across South East Asia; the SEPA zone has determined they wish to have a real time clearing system for euro payments. Obviously the US has already gone. The other markets in the Americas are looking as well. This is pretty much a global phenomenon, everybody is looking at this ques­tion.”


And VocaLink and MasterCard together couldn’t be better placed to deliver.


The burning question is what’s to stop MasterCard hiking up the cost to access the system a little further down the line? Given the Payment Systems Regulator’s (PSR) mandate to democratise the UK’s payments scene, many might argue that endorsing VocaLink’s sale to a company such as MasterCard veers in the oppo­site direction of the commitment, not promising much by way of keeping the system competitive for all system users. Yates, however, repudiates this wholeheartedly.


“We have made it clear to the PSR that we know and expect that there will be a competitve process, the chance of this being an environment in which you could even dream of increasing the prices is just not realistic.”


In the meantime, we eagerly await Zapp’s launch.