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 today, U.S. Bank will use its “multipurse” processing capabilities, which will enable its cardholders eventually to access multiple spending accounts, cash and lines of credit with a single card, TSYS says.

The Minneapolis-based banking company chose TSYS after an “informal review” of the three major processors in the market, says Ralph Bernstein, a senior vice president with U.S. Bank’s healthcare payment solutions unit. The two others were 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 says. “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 says.

U.S. Bank will use TSYS’s Integrated Payments platform, which the company began offering in late 2007 when it launched its health care business, says Mark O’Leary, senior vice president of business development in TSYS’s health care unit. The platform can manage cards with as many as 50 individual purses, and each purse could have different attributes, he says.

Hospitals and physicians’ offices have made little progress in integrating their systems with the insurers’ to provide immediate authorization of payments, O’Leary says. “The area that has the greatest fragmentation and pain also is the greatest opportunity,” he says.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry