National City Processing Co. has lured two major merchant processing contracts away from two of its closest rivals.

The Louisville, Ky:-based subsidiary of National City Corp. signed Dillard's department stores, which formerly used National Data Corp., and United Airlines, which had used Card Establishment Services.

The Nilson Report ranks Credit Establishment and National Data third and fourth in providing card processing services for merchants, right behind National City. Nabanco, a unit of First Financial Management Corp. of Atlanta, is No. 1.

Stronger Market Presence

According to Mark Creighton, senior vice president of National City Processing, the company had been "maintaining relationships" with Dillard's and United Airlines for a long time.

Although he would not disclose how much transaction volume the new contracts will bring, they do give the processor an increasingly strong foothold in those respective markets.

Since the beginning of 1993, National City has gotten May Co., Filene's Basement, Foley's, and Hecht's department stores as clients. This month, Mr. Creighton said, in addition to starting up in Dillard's 225 stores, the processor plans to roll out its service in Kaufmann's and Lord & Taylor.

Similarly, in the airline industry, National City already processes for Delta, USAir, and Southwest Airlines.

|A Very Attractive Offer'

A spokesman from Dillard's refused to comment on its switch in processors.

Joseph Hopkins, a spokesman from United Airlines, said National City "made us a very attractive offer."

United accepts card payments at 155 airport ticket counters worldwide and 150 city ticket offices, as well as through most of the nation's 40,000 travel agents.

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