National City Processing Co., the second-largest transaction processor in the country, is bolstering its management team in response to an expanding electronic payments industry.

The Louisville, Ky.-based processor, a unit of Cleveland-based National City Corp., announced two promotions and three new appointments last week.

Delroy R. Hayunga, 51, president and chief executive since 1985, assumed the newly created position of chairman and chief executive. Mr. Hayunga is focusing on strategic issues and long-range growth opportunities.

Tony G. Holcombe, 39, most recently executive vice president, was promoted to president. He is responsible for day-to-day operations.

Mr. Holcombe said the moves "strengthen the management team to better handle needs of merchants going forward" as card acceptance diversifies into debit, procurement, and corporate segments.

The company, which processed two billion transactions in 1994, "made its mark" servicing large corporations, such as Wal-Mart, Kmart and Target, he said.

Mr. Holcombe said the company's strategy in promoting two very senior players would "help us continue to grow and expand" the flagship merchant business, which reported revenues of $350 million in 1994.

The new appointees include Richard Alston as executive vice president of corporate resources, responsible for mergers and acquisitions and for all staff units. Previously, Mr. Alston worked for Sealy Inc. in marketing, sales, finance, and operations.

Kurt S. Knipp was hired as executive vice president of bankcard services, responsible for all aspects of sales, marketing, operations, and systems. Mr. Knipp worked for rival Nabanco in Fort Lauderdale, Fla., for the past four years, most recently as senior vice president, mergers and acquisitions.

Michael E. McEvoy was named senior vice president of bankcard product development, responsible for new products and services. Mr. McEvoy was previously president of the Quest Network, an electronic funds transfer network.

Mr. McEvoy reports to Mr. Knipp, while both Mr. Alston and Mr. Knipp report to Mr. Holcombe, who reports to Mr. Hayunga.

William R. Robertson, deputy chairman and head of all fee businesses for National City Corp., said the management changes reflect its concern over rising competition.

"You saw FDC's acquisition of CES - that makes the competitive heat that much stronger," said Mr. Robertson. "We felt it was necessary to beef up management," he added.

Mr. Robertson referred to First Data Corp.'s purchase of Card Establishment Services, the number-three transaction processor in the country. Credit Card News, a weekly newsletter, ranks Nabanco as No. 1.

"Every day the competitive threat is out there - we just have to stay even with it."

Mr. Robertson said the promotions would serve to enhance management of the core business as well as further to develop National City's other operations, which include revenue accounting for the airline industry, check services, remittance processing, freight audit, electronic benefit payments, and corporate accounts payable divisions.

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