MasterCard Inc. said Thursday that it is buying the prepaid card business of Travelex Holdings Ltd. of London.
MasterCard said the $458 million acquisition, which it expects to close in the first half of 2011, should improve its business in overseas markets.
"Travelex has a global footprint. This allows us to help deliver better products at scale for our prepaid clients around the world," Matthew Lanford, the senior business leader and head of prepaid for MasterCard in Europe, said in an interview at the Cartes & Identification conference in Paris on Thursday.
In foreign markets, "this gives us is a more full prepaid product suite that our partners, whether they're program managers or issuers, can leverage to better support the prepaid market globally," Lanford said.
MasterCard said it will use the technology and systems it is acquiring to continue focusing on cross-border travel products for consumers as well as corporate travel, primarily focused on the maritime and airline industry, Lanford said.
MasterCard could apply some of its existing technology services, such as its inControl product that issuer banks can offer cardholders to set limits on their spending and its PayPass technology for contactless payments, to expand the cross-border products that banks and program managers offer, he added.
The prepaid card market is expected to reach $840 billion globally by 2017, according to a report released this year by Boston Consulting Group that was commissioned by MasterCard.
"Prepaid for us is a very important product," Lanford said. "We just want to make sure that the product category is successful and that we can help all the partners in the value chain do what they need to do to push prepaid forward and be in a strong position."