More banks are forming subsidiary alliances with high-tech companies to grow their share of the market for merchant services. But experts say there is a limit to the number of potential alliances that the marketplace can support.

To solidify its place as a provider of merchant services, Cleveland- based KeyCorp and Nova Information Systems, Inc. , of Knoxville, TN, and Atlanta, recently formed an alliance in which the two will jointly own a new company, Key Merchant Services. KeyCorp will contribute its merchant sales and marketing workforce of 90 associates and merchant services contracts representing $5.1 billion in annual credit and debit card sales. Nova will provide technology and back-office support, making it one of the top five U.S. payment processors. Nova has other alliances including First Union, FirstStar and CrestStar.

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