National City Corp. agreed to move most of its debit transactions and some of its processing work to Visa Inc., which has been trying to expand its debit relationships with banks.

The agreement, announced Monday, will significantly reduce Nat City's 12-year relationship with First Data Corp., which currently processes the Cleveland company's credit and debit purchases and routes some of its PIN debit and automated teller machine transactions across its Star Network.

National City has agreed to use Visa's Interlink and Plus systems as its primary networks for PIN debit and ATM transactions. In addition, Nat City will transfer the processing of those transactions to the San Francisco payment company.

Mark Ford, a senior vice president and the group product manager for consumer and business lending at Nat City, said in an interview Monday that it will maintain a "smaller" relationship with First Data. "They're still a very strategic partner," but after a competitive bidding process for the issuer's business, "we felt like Visa's entire package of processing services just fit our needs more effectively."

He would not discuss specifics of the deal, except to say that it was "not a purely financial decision" for Nat City. "We believe that being the customer's primary payments engine is a long-term winning strategy for us." The expanded relationship with Visa will allow Nat City to "integrate all our payments into one stream of payment processing" and "have better access to data analytics and operational processes."

Stacey Pinkerd, Visa's head of global consumer debit products, said in an interview Monday, "National City's been a Visa debit card issuer for a long time; we are basically just expanding that partnership." By persuading issuers like Nat City to adopt its "one-step, seamless" processing services, Visa can "deepen and strengthen our relationship with these financial institutions."

Interlink will be the primary PIN debit network for Nat City's point of sale purchases, and Plus will be the primary network for ATM transactions. Nat City will transfer the PIN debit and ATM processing business to Visa's Debit Processing Service, which handles several types of payments and offers "real-time" risk analysis on online transactions.

Visa said it will handle the increased duties as part of a "renewed and expanded" multiyear brand agreement with Nat City. Mr. Ford would not disclose the length of the contract, but he did say that the companies are negotiating a start date, and it will not begin before next year.

Both Visa and MasterCard Inc. are working to strengthen their debit and processing businesses. They have recently taken steps to get their issuers to use their debit systems, once known as the networks of "last resort," and switch some business away from third-party processors.

In April, MasterCard unveiled its Integrated Processing Solutions system, which can handle several types of payments, and it informed its debit issuers that they would have to enable its Maestro PIN debit network on their cards. That decision upset several issuers that had lucrative "exclusive PIN debit" deals with other networks, like Discover Financial Services' Pulse Network LLC.

Visa, which has offered its integrated Debit Processing Service since 1995, has less ground to cover in PIN debit, according to analysts. Adil Moussa of Aite Group LLC said Interlink handles a majority of point of sale transactions.

Nevertheless, the Nat City agreement illustrates that Visa is just as committed as MasterCard to "starting to play in the turf of the processors," Mr. Moussa said. "Visa and MasterCard are going to be playing a much heavier role in the processing part because it's a way to capture new revenue."

Red Gillen, a senior analyst at Celent LLC, wrote in an e-mail Monday that Visa's efforts to bulk up its debit processing business give the company a revenue opportunity and "a long-term customer retention strategy, as they enable Visa to insert a larger bundle of its products deeper into banks."

Now that both are public, Visa and MasterCard "will look for ways to expand outside of its core payment network business, which sets up confrontation with major processing players such as First Data and TSYS," he wrote.

Nancy Etheredge, a spokeswoman for First Data, wrote in an e-mail Monday: "National City remains an important and valuable customer for First Data," and that the unit of Kohlberg, Kravis, Roberts & Co. "will work closely with National City and Visa to ensure a smooth transition when our contract for PIN debit and terminal driving ends at the end of the 2009."

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