Society National Bank has contracted with First Data Resources Inc. to have its credit card transactions processed.

The contract calls for Cleveland-based Society's 1.1 million cardholders to be converted onto the First Data Resources card-processing systems in the first quarter of next year. The agreement also involves processing for the bank's 16,000 merchant relationships. The contract's financial terms were not disclosed.

Last March, the bank's parent, Society Corp., acquired Ameritrust Corp., creating a $23 billion-asset institution.

|Reviewed Both Systems'

At the time of the merger, Ameritrust, with close to 500,000 credit card customers, had already been processing its credit card transactions with First Data. Society, with 600,000 cardholders, had been using EDS Corp.

"We reviewed both systems. EDS and First Data Resources are both excellent providers," said Michael Kapan, vice president of business development at Society National Bank. "We believe that First Data Resources will provide us with the highest quality of services and the latest in technology."

Benefits of Merging Operations

Executives at Society have been working steadily on combining systems since the merger was announced earlier this year. The two credit card operations were the last area of the new bank to be combined.

According to Mr. Kapan, by running a single credit card operation, the bank will benefit from traditional economies of scale, including the consolidation of back-office support services and lock box payment processing. He declined, however, to say how much the bank expects to save as a result of the consolidation.

In addition to consolidating systems, Society executives expect the outsourcing deal with First Data to allow the bank to adapt quickly to the fast-changing credit card market. Mark Allen, a spokesman for Omaha-based First Data Resources, said, "Our size allows us to continually reinvest in ourselves, which adds values to the services we provide to our customers,"

A unit of the American Express Co., First Data provides transaction processing to over 700 institutions, representing over half the credit cards processed by third party providers and close to one-fourth of all the credit cards issued in the United States, Mr. Allen said:

When the conversion is completed, payment processing and product marketing will be run out of the bank's Cleveland office, while accounting, credit review, and the collections function will be combined in Toledo, Ohio.

Ms. Sullivan is a freelance writer based in New York.

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