First USA Paymentech has launched a new corporate MasterCard for British Airways.

The processor, an affiliate of the monoline company First USA Inc. that was acquired two months ago by Banc One Corp., will provide automated tracking of company expenses while letting cardholders earn air miles.

Paymentech is not the first to mix corporate charges with rewards, but industry observers see the British Airways partnership as the first major deal on an international scale.

Minneapolis-based U.S. Bancorp, when known as First Bank System, linked a business card to Northwest Airlines' frequent flier program in 1994. Through its Membership Rewards program, American Express extends air miles to corporate cardmembers.

The British Airways MasterCard Corporate card will be marketed to 1,000 companies.

First USA Paymentech will provide software to analyze spending trends, to aid in negotiating volume discounts with suppliers, and will monitor credit limits to regulate spending.

"We have a really strong demand for this card from large banks that have tried and failed in the commercial card business," said James W. Baumgartner, president of Paymentech's commercial card unit.

The air rewards program, British Airways Executive Club, is available for an additional fee of $50.

Cardholders are eligible to earn varying levels of points on purchases, including car rentals and hotel stays.

The points are redeemable on British Airways or one of its affiliated airlines, including American, Alaska, America West, Canadian, and Qantas.

Although both U.S. Bancorp and American Express have had success with their programs, many issuers have not ventured into the world of commercial-card airline rewards.

"A major obstacle in these sort of programs is identifying who benefits from the mileage points," said Stanley Anderson, president of Anderson & Associates, Arvada, Colo. "While a number of companies allow employees to retain the air miles themselves, some do not."

Mr. Anderson said there is no incentive for cardholders to use the card if their miles apply only to corporate travel.

First USA Paymentech wants companies to view the air-mile perks as a motivation for employees to use the card, said Rodney Bell, a spokesman for the company.

"The deal certainly has an impact because it incorporates the partners for British Air," said Mr. Anderson.

That relationship could open the door for Paymentech to serve other airlines. Some of them have relationships with other card companies, Mr. Anderson said, adding, "We could see interesting challenges in the future."

Mr. Baumgartner said, "We are a nonthreatening partner for larger commercial banks, because we are focused on payment solutions and are not going to take away their customer base."

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