U.S. Bancorp has hired Total System Services Inc. to provide card processing services for its consumer-directed health-care benefit cards.

Under the agreement announced Tuesday, TSYS said U.S. Bank will use its "multipurse" processing capabilities, which will allow U.S. Bank cardholders eventually to access multiple spending accounts, cash and lines of credit with a single card.

Ralph Bernstein, a senior vice president with U.S. Bank's healthcare payment solutions, said the Minneapolis banking company chose TSYS after an "informal review" of the three major processors in the market; the other two are Kohlberg Kravis Roberts & Co.'s First Data Corp. and the Metavante healthcare payment solutions unit of Fidelity National Information Services Inc.

U.S. Bank is one of the largest providers of health savings accounts, with 120,000 accounts containing $170 million in consumers' deposits.

"Right now, we process those cards internally. Because they are HSA only, they are fairly simple," Bernstein said. "We needed a broader set of capabilities." U.S. Bank plans to move the bulk of its cards to TSYS this year and to complete the process in 18 months, he said.

Mark O'Leary, the senior vice president of business development in TSYS' health-care unit, said U.S. Bank will use TSYS' Integrated Payments platform, which the company began offering in late 2007 when it launched its health-care business.

The IP platform can manage cards with as many as 50 individual purses, and each purse could have different attributes, O'Leary said.

Hospitals and physicians' offices have made little progress in integrating their systems with the insurers' to provide real-time authorization of payments, O'Leary said. "The area that has the greatest fragmentation and pain also is the greatest opportunity."