Travelex Gives a Lift to MasterCard’s Year-Old Debit Platform

MasterCard Inc. is getting a big boost from The Travelex Group, a multinational distributor of travel-related prepaid cards. Under a deal announced last week, Travelex will convert its payment card network brand to MasterCard and process card transactions on MasterCard's year-old debit processing platform called Integrated Processing Solutions, or IPS. The Travelex deal is the latest skirmish in a ceaseless war between the now publicly held MasterCard and Visa Inc. networks for the favor of card issuers, merchants, and specialty companies such as Travelex. London-based Travelex serves 1.75 million consumer and corporate cardholders with multicurrency Cash Passport prepaid cards offered through a network of more than 25,000 businesses, including travel agents, 700 retail branches in 35 countries, and corporate relationships in more than 100 countries. A number of different banks issue the cards, including Lombard, Ill.-based West Suburban Bancorp in the U.S. Nearly all of Travelex's cards currently are Visa-branded, but Travelex rather than the individual issuers is the “decision maker” about network branding and processing, according to Laura Kelly, global head of MasterCard's prepaid group. “Travelex has chosen MasterCard for its strong, recognized global brand, robust product offerings, and dedication to the business,” a Travelex spokesperson says via e-mail. “MasterCard will also provide dedicated account support.” The spokesperson didn't answer a question about whether MasterCard provided a monetary incentive to get Travelex's business. Both networks have provided such incentives to encourage issuers and merchants to go with their respective brands. Kelly says the Travelex deal was about service. “We spent time with them and really drew a vision … and they were quite compelled by that,” she tells Digital Transactions News. “One [factor] is a global infrastructure with IPS.” IPS, she says, will enable Travelex to expand its business faster than it could without such a platform. With IPS, Travelex can pursue opportunities in the consumer travel, airline, and maritime industries with minimal infrastructure investment, according to MasterCard. Industry observers saw MasterCard's unveiling of IPS last year as the network's answer to Visa's bigger debit card base and more-established processing platform (Digital Transactions News, April 8, 2008). But before Travelex, IPS had only two publicly disclosed clients, San Antonio, Texas-based Security Service Federal Credit Union and Swiss Bankers Prepaid Services Ltd. Kelly won't speak about prospective clients that would use IPS's signature- and PIN-based debit card services because those cards aren't under her jurisdiction. But on the prepaid card side, “we're doing very well, we have a very robust pipeline,” she says. Travelex also will use the MasterCard Advisors consulting service. Conversion of the Visa-branded cards to MasterCard will occur next year, while issuance of MasterCard-branded Travelex cards to new customers will start somewhat sooner, according to MasterCard.