MasterCard Increasingly Forming Alliances With Rivals

MasterCard has forged a partnership with competitor Travelex to establish a multi-currency prepaid overseas credit card that will benefit both companies. The alliance will enable consumers to travel overseas with a reloadable and replaceable credit card available in five currencies. MasterCard’s Seth Eisen says MasterCard serves as the network where the transactions for the cards are routed, while Travelex sells the cards to consumers. The card network’s Michael Weitzman notes that partnerships are sensible for MasterCard because “we believe financially it can be greater than the sum of its parts,” and the collaboration expands MasterCard’s reach to overseas customers and allows Travelex to extend revenue on conversions and partner with a global brand. Weitzman cites the alliance’s potential to bolster MasterCard’s worldwide brand, noting “our secret sauce is to authorize, clear, and settle transactions between 23,000 financial institutions and 35.9 million merchants.” MasterCard also collects fees from the transactions and increases overseas revenue, and the company encourages partnerships with various collaborators.

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From “Alliances With Rivals Increasing for MasterCard”
Investor’s Business Daily (10/11/13) Stern, Gary M.