U.S. Bancorp's merchant acquiring operations are getting into Mexico on the ground floor.

The Minneapolis banking company's Elavon unit is expected to announce today that Banco Santander SA has agreed to offer Elavon's acquiring services to Mexican merchants, allowing those merchants to handle card payments just as the economy there shifts from cash to plastic.

Adil Moussa, an analyst at Aite Group LLC of Boston, said the payments system in Mexico is ready for a company with Elavon's capabilities.

"The market is growing not only from a credit card standpoint, but also from a debit card standpoint and a prepaid standpoint," Moussa said.

Elavon can appeal to these merchants, he said, as it has "a lot of horsepower in processing."

In an interview Monday, Stuart C. Harvey Jr., Elavon's chief executive, said, "we're catching them at a very good time."

Elavon and Santander have been working together since 2003 and now have similar partnerships in place in Europe and Puerto Rico. Harvey said this history, and the Madrid banking company's "tremendous distribution power" in Mexico, made Santander the obvious choice for its push south of the border. "There's a lot of organic growth opportunities in Mexico," he said.

In Mexico, Elavon can expect to face off against some familiar rivals. First Data Corp. and Total System Services Inc. "have been in Mexico for many years," Moussa said.

"Elavon has traditionally been a good contender for both of these companies in the U.S.," he said. "They already do have a record of being quite a reputable processor, just like the other two."

TSYS spokesman Cyle Mims said his company "has a long-standing commitment to Mexico, having first entered the market back in 1993. We continue to look for additional opportunities on both the issuing and acquiring sides of the market." He would not discuss Elavon.

First Data declined to comment for this story.

On Friday, Elavon paid Santander an undisclosed amount to take over its existing relationships in Mexico. After that, the two companies would share revenue from new clients. Elavon would not disclose further financial details of the agreement.

Harvey said this partnership fits with Elavon's existing international growth strategy of finding an established partner. "When we go into new countries, we typically don't go in alone," he said.

Though this is the first time Elavon will be handling payments in pesos, "we have built, over the last two years, a very significant international processing platform," Harvey said.

He said he wants to continue to expand abroad, though he offered few details.

Santander also has a strong presence in Brazil, but Harvey would not say whether Elavon is pursuing a similar partnership there.

"The relationships with Santander by country vary," he said. "They're different. It's not a cookie-cutter approach."

U.S. Bank has long been focused on international payments markets. Elavon was created in 2008 when it merged several existing acquiring units, notably the Atlanta acquirer Nova Information Systems Inc., which the financial company purchased in 2001. Harvey was previously Nova's president and the chairman of its international unit euroConex Technologies Ltd., and was named to the top position at Elavon.

Harvey said then that he had his eye on Latin America.

Brian Riley, a research director in the bank cards practice at TowerGroup, a research firm in Needham, Mass., praised Elavon's earlier international expansions.

"Elavon has done really nicely in growing in Europe," he said, and establishing itself in Mexico could be "a really big deal for them."

Elavon's technology could help it tackle some of the challenges inherent in the market, Riley said. Rising fraud can be countered with the vetting Elavon does at the point of sale, for example.

Though Harvey would not talk about future prospects, Riley said Brazil represents a good next step for the company — and not just because Santander has paved the way.

Brazil has "one of the most sophisticated debit card markets in the world," and there is "a great future play with mobile banking," he said.

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