MasterCard's (NYSE:MA) acquisition of Travelex should pay dividends for them quickly, as it will immediately offer them a fee-based stream of income, and improve their brand for prepaid card distributors.
Barclays (NYSE:BCS) noted, "Acquisition Adds to MA's Prepaid Capabilities: Already a processor and network for prepaid distributors, MA will now be able to act as a program manager, supporting card design, issuance, customer service, marketing, and risk management, among other things. The new capabilities will not only generate incremental fee income, but also improve MA's value proposition to prospective prepaid card distributors and issuers, which should help it capture a healthy share of this high-growth segment."
Barclays maintains an "Overweight" on MasterCard, which closed Friday at $254.76. They have a price target of $305 on the company.
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