MasterCard (NYSE: MA) and Travelex Holdings Ltd today announced a transaction in which MasterCard will acquire the prepaid Card Program Management (CPM) operations of Travelex for ?290 (US $458) million in cash (with an earnout). The CPM operations include prepaid travel debit card programs that allow travelers to carry and access funds in different currencies.

The prepaid debit market has been growing, and both Visa and MasterCard have been focusing on the potential of the market, both in the U.S. and around the world. Through the Travelex CPM acquisition, MasterCard is better positioned to take advantage of cross border or multi-currency prepaid markets (including the travel market).

MasterCard and Travelex have been working closely on prepaid over the past year, including on Travelex’s “Prepaid Travel Card MasterCard” (also known as Cash Passport) which can be used to buy goods and services at millions of merchants that accept MasterCard or Maestro® debit cards and to withdraw local currency from more than one million ATMs worldwide.

As part of the deal, MasterCard and Travelex signed a long-term agreement in which MasterCard will provide program management services for the Travelex Cash Passport prepaid card sold through Travelex stores and online channels. Travelex, the world’s largest foreign-exchange specialist, pioneered the growing prepaid travel card market with its Cash Passport card, which provides international travellers a more secure and convenient way to carry and spend money abroad.

The press release can be viewed here.

A video produced by MasterCard and Travelex describing last year’s deal between the company is shown below.