Mastercard Buying Travelex Prepaid Card Business

FOXBusiness

MasterCard (NYSE:MA) inked a $459 million deal on Thursday to acquire foreign exchange group Travelex’s prepaid cash card business.If certain performance targets are met, the deal could be worth an additional $55 million.By acquiring Travelex’s business that manages and delivers consumer and corporate prepaid travel cards, MasterCard said it sees the deal strengthening its global prepaid business assets and adding to its bottom line beginning in 2013.“This acquisition enables MasterCard to play a greater role in the prepaid value chain, allowing us to shape the future of prepaid, especially in high-growth markets and in the attractive cross-border payments space where we can displace cash and traveler’s cheques,” MasterCard CEO Ajay Banga said in a statement.The companies sees the deal closing in the first half of 2011, diluting MasterCard’s EPS by 4 cents that year and being neutral to its bottom line in 2012.As part of the transaction, MasterCard and Travelex signed a long-term contract where MasterCard will provide program management services for the Travelex Cash Passport prepaid card.Last year the companies reached a deal to convert most Travelex card programs to the MasterCard brand and using MasterCard’s transaction-processing capabilities.“The sale of CPM will allow us to accelerate our investment plans, particularly in higher growth regions such as Asia and South America and in the growing e-commerce channel,” Travelex CEO Peter Jackson said. “MasterCard is a great partner of Travelex and we are also pleased to continue to offer our customers the benefits of the Travelex Cash Passport.”MasterCard’s stock declined slightly in the wake of the news, losing 0.65% to $249.02.

Continue Reading Below

What do you think?

Click the button below to comment on this article.