First Data Corp. and Paymentech Inc. announced a $400 million agreement Monday to effectively merge two of the biggest operations in the credit card merchant processing business.

First Data said it plans to acquire the 16 million outstanding public shares of Paymentech, approximately 45% of the company, at $25.50 each. Bank One Corp. would retain the other 55%.

The resulting organization, as yet unnamed, would be folded into Bank One Payment Services LLC, an existing joint venture of First Data and Bank One.

The deal would strengthen an already close relationship between those organizations while taking the merchant-acquiring part of the card industry further down the consolidation road.

This is "a big deal for First Data," said Paul Martaus, president of Martaus & Associates, Clearwater, Fla.

The Atlanta-based processor, which is the leader in both merchant transactions and in servicing MasterCard and Visa cardholder accounts for banks, has had to rebound from the effects of customer mergers. It lost BankAmerica Corp. when it merged with NationsBank Corp., for example.

First Data's combining of operations with Paymentech, which became part of Bank One through the 1997 acquisition of First USA Inc., will bolster one of the bigger joint ventures that First Data calls merchant bank alliances. In these, banks control merchant relationships and rely on First Data for transaction processing.

Pamela H. Patsley, president and chief executive officer of Paymentech, based in Dallas, will run the larger entity.

"We are really taking the best from each organization and combining it into one," Ms. Patsley said.

Bank One Payment Services primarily serves customers who have relationships with Bank One. Paymentech's merchant customers are generally larger than Bank One's and are not the result of a particular banking relationship. Paymentech is also especially steeped in the mail-order and telephone-order business.

First Data would end up owning approximately 47% of the company, Bank One 53%, said Ms. …