First Data Corp. said an agreement it has reached with the Federal Trade Commission staff should clear the way for its proposed $6.7 billion merger with First Financial Management Corp.

The merger would make First Data, already the largest processor of bank credit card accounts, the No. 1 provider of card services to retailers through the combination of the two companies' merchant processing units.

First Data, which is based in Hackensack, N.J., reported this week that the FTC had focused its antitrust investigation on the merging companies' money transmission services. The Washington agency's staff is recommending that First Data divest either its MoneyGram marketing organization or that of the larger Western Union operation that Atlanta-based First Financial owns.

The recommendation requires ratification by the five-member FTC, which would be followed by a 60-day public comment period before the merger could be consummated.

Pending the FTC process and approvals of shareholders and some state and local governments, First Data expects to complete the transaction late this year or early next.

First Data said the proposed consent order is essentially the same as the one it agreed to last year, before it was outbid by First Financial to acquire Western Union.

The FTC proposal would allow First Data to provide processing for both money transfer brands, but it would have to sell one of the marketing and sales arms within about a year, with the FTC approving the buyer.

Industry observers generally expect First Data to retain Western Union, which dominates the market and has the stronger brand identity.

"Where the Western Union brand name might have value would be out of traditional markets and on the Internet" for electronic payments, said Richard Crone, senior manager in consulting with KPMG Peat Marwick in Los Angeles.

First Data spokesman Gary Tobin said no divestiture decision has been reached.

He noted that all other overlaps between First Data and First Financial cleared FTC scrutiny, including the critical merchant processing businesses, where First Data is No. 3 in bank card transactions and First Financial's Nabanco unit is No. 1.

Mr. Tobin said the companies also passed muster in debt collections, where First Data's ACB Business Services and First Financial's Nationwide Credit are among the top five agencies.

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