First USA Paymentech plans to issue a multi-use fleet MasterCard that will include purchasing, travel, and entertainment capabilities.

MasterCard introduced fleet cards to the market in August to tap an $80 billion market.

The association said it expects GE Capital Corporate Expense Management Services, Citicorp, and First Chicago NBD Corp. to join Paymentech in issuing the new cards, beginning in the first quarter.

Some experts applauded MasterCard's efforts to combine fleet, purchasing, and corporate cards. But some said it will take up to two years for petroleum companies nationwide to upgrade terminals so that they can capture the data necessary for the new multi-use cards.

"The fact that it can be accepted everywhere that MasterCard is accepted does not make it a fleet card," said David Robertson, president of the Nilson Report, Oxnard, Calif. "They must make the system changes."

First USA Financial Services, a Paymentech subsidiary, will issue the first of these multi-use fleet cards early next year for a subsidiary of PHH Corp., a relocation and mortgage firm.

The Dallas-based processor formed a joint venture called PHH/Paymentech with PHH Vehicle Management Services, one of the leading global fleet companies. Terms were not disclosed.

"This is a first of a kind for Paymentech and an innovation for the industry as a whole," said Pamela Patsley, president and chief executive of First U.S.A. Paymentech. "This replaces the private-label PHH card with a broader-use MasterCard."

However, Mr. Robertson noted, "PHH has several hundred thousand cards issued that would transmit more information than this new MasterCard at the beginning."

David S. Berry, director of research for Keefe, Bruyette, and Woods Inc., said First USA Inc. and PHH Corp. have been working together for months to sell mortgages to First USA's cardholder base. "These are two rapidly growing companies," he said.

"We have long looked at the (fleet card) marketplace," said James M. Prebil, senior vice president for PHH Vehicle Management.

"Private-label cards can't successfully serve business travelers," he said. "Clients want to consolidate expense management needs. It's very important for us to explore other platforms outside our existing offerings."

He said terminal conversion will take place over a period of years to account for information upgrades.

Ralph A. Bianco, vice president of global product development for MasterCard International, said petroleum vendors need to change terminals to prompt for odometer readings, driver and vehicle numbers, cost of the sale, price per gallon, size of the tank, time and day of refill.

MasterCard said Chevron, Citgo, Conoco, Exxon, Getty, Mobil, Shell, Sunoco, and Texaco have all agreed to implement terminal changes to support the new fleet card.

MasterCard said the new card was supported by issuer processors, including EDS, First Data Resources Inc., and Total System Services Inc.

Stanley Anderson, president of Anderson and Associates, Denver, applauded MasterCard for its initiative.

"Clearly, there has been a crying need in the U.S. fleet industry for many, many years," for a combined fleet, corporate, and purchasing card, he said. "Fleet managers want to support all needs of the vehicle on the road, and all expenses for the driver."

PHH Vehicle Management Services, founded in 1946, now manages 483,000 vehicles, and one-third of its client companies are in the Fortune 500. It processes more than one million fuel and service cards, with more than 50 million transactions for fiscal 1996.

PHH Corp., the parent company of the fleet subsidiary, announced last week that it will be acquired by financial services company HFS Inc. for $1.7 billion.

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