First Data Corp. is planning to close a division that sells credit reports to financial institutions and as a result will drop any ambition to compete directly with the major credit bureaus.

First Data launched its initiative in April 1997 by buying Consumer Credit Associates of Houston. By getting into the on-line credit bureau business, the Hackensack, N.J.-based transaction processing giant expected to gain advantages over credit reporting's Big Three: Equifax Inc., Experian Inc., and Trans Union Corp.

Three months ago, the operation was renamed Innovis. Edward A. Barbieri, the unit's president, said the change reflected "our commitment to providing the most innovative information services in the credit industry."

But First Data said last week it will pull the plug on the venture because it was slow to bring its technology to market and "would have been a significant drag on profits."

First Data said it will take a one-time, pretax earnings charge of about $145 million in the fourth quarter. About 150 employees are expected to lose their jobs when the division closes in March.

"We concluded that the investment and the effort required to make Innovis' technology platform commercially competitive would not provide the necessary return on our investment dollars," said Ric Duques, chairman and chief executive officer of First Data. "As the competitive nature of the market intensified, delays in the system readiness put us behind in bringing a competitive product to the market."

First Data spokeswoman Colleen Emigh said the products and services that would have distinguished Innovis are being launched or planned by the dominant credit bureaus. Even so, Innovis had signed up 20 clients, primarily in the credit card-issuing business, Ms. Emigh said.

Shortly after First Data bought the organization that became Innovis, Harry Gambill, CEO of Trans Union, predicted it would be a formidable competitor. He said in an American Banker interview that he was "watching (it) carefully."

Innovis' main product, Failsafe, is a national list of consumers with negative credit histories. Clients use it to screen prospective customers.

Analysts said Innovis' demise reflects how First Data is focusing on core businesses such as credit card processing and its Western Union money transmission subsidiary. "If they don't think they can be a top provider of a service, they won't offer it," said Pawan K. Malhotra, an analyst at Legg Mason Wood Walker.

Innovis' closing "is more significant for the other credit bureaus" than for First Data, said Franco Turinelli, an analyst at William Blair & Co.

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