The unit manages and delivers consumer and corporate pre-paid travel cards to financial institutions, retailers, travel agents and foreign exchange bureaus around the world. It also manages cross-border payroll, per-diem and expense-management pre-paid cards.

The two firms - which already work together - have also signed a long-term contract whereby MasterCard will provide program management services for the Travelex Cash Passport pre-paid card.

MasterCard - which has no plans to issue cards directly - says the acquisition strengthens its position in pre-paid, a fast-growing sector. The company cites a recent Boston Consulting Group study indicating that pre-paid is expected to reach more than $840 billion in global volume by 2017, a CAGR of 22%.

Ajay Banga, CEO, MasterCard, says: "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."

Peter Jackson, CEO, Travelex, adds: "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."

The deal also includes an earn-out of up to an additional £35 million if certain performance targets are met. The transaction, expected to close in the first half of 2011,is expected to be $0.04 dilutive to MasterCard's 2011 earnings, neutral in 2012 and accretive in 2013.