MasterCard Buys Prepaid Debit Card Management Unit from Travelex

MasterCard expanded its footprint in the global prepaid debit card market this month when it acquired the Card Program Management operations of Travelex. Frequent business travelers recognize the Travelex brand from its successful currency conversion service bureaus in major airports and world capitals. The company pioneered the use of stored value debit cards to eliminate much of the hassle of paying for routine expenses during international trips.

Now that prepaid debit cards have attracted interest from a broader consumer market, MasterCard officials say that they intend to build on the Travelex platform to reach even more customers through retail and online channels. In a statement to reporters, MasterCard officials confirmed that they would continue to operate the existing Travelex Cash Passport product while finding ways to expand into new markets.

MasterCard purchased the debit card unit for roughly $458 million in cash, with an anticipated bonus payout of $55 million based on performance targets in 2011. Existing Travelex debit card customers should expect no change or interruption in service, though MasterCard officials reiterated that the payment platform provider had no intentions to issue debit or credit cards directly to consumers.