National City Processing Co. has agreed to acquire the remittance processing business of First Data Resources Inc.
Under terms of the agreement, the Omaha-based card servicing unit will outsource all of its clients' remittance activities exclusively to National City. These functions include the opening, extracting, recording, and posting of credit card payments with paper invoices.
"This represents a 30% increase on our base of business," said Tony G. Holcombe, chief executive officer of Louisville, Ky.-based National City Processing, a subsidiary of $35 billion-asset National City Corp. of Cleveland.
"The additional transaction volume will bring us to 500 million transactions annually" in the remittance processing area, added Mr. Holcombe.
Financial terms of the deal were not disclosed. It is expected to close within 60 days.
"With the acquisition, NPC will be the largest remittance processing company in the United States," said David R. Zook, executive vice president of corporate services for National City Processing.
"This is an exciting opportunity for us to build upon our existing base of remittance processing business while further enhancing the service provided to clients of First Data Resources," he added.
The agreement includes a long-term arrangement for First Data Resources to continue to market the remittance business to its clients, with the National City unit serving as processor.
"First Data is not a major player in this area and we felt our clients deserved the service and competitive advantage only a leader such as NPC could provide," said a spokeswoman for First Data Corp., the Hackensack, N.J.-based holding company for First Data Resources.
The spokeswoman said the remittance deal with National City was not precipitated by First Data's recent merger with First Financial Management Corp.
"We were simply trying to find the best solution for our clients, and National City Processing is a true leader in remittance processing," she said.
First Data Resources will continue to offer card embossing, cobranding and relational data base marketing services, home banking, smart card services, and processing for credit, debit, and commercial cards.