First Data to Purchase Citi Merchant Services Unit

First Data, the Denver-based e-commerce and payment solutions provider, announced it will buy Citibank's (New York) current U.S.-based Citi Merchant Services (CMS) unit and will manage that business in an alliance with Citibank. CMS provides credit and debit card payment processing services to approximately 15,000 merchant locations.

With the deal, First Data will contribute sales and management personnel, as well as payment-processing services and account management support. Citibank will support marketing efforts through all its sales channels, including branch locations in the United States.

"This alliance marks another major commitment to First Data's merchant alliance strategy," said John Shlonsky, president of First Data Merchant Services, in a statement. "Citi Merchant Services clients will benefit from the expertise and expanded service offerings of First Data and Citibank.

First Data currently performs transaction-processing services for the bank's private label and co-branded private label credit cards in addition to check and money order services. Citibank is a member of First Data's STAR Network.

Terms of the deal were not disclosed, and the agreement is subject to regulatory approval.