Bank of America ( BAC) agreed to acquire credit-card payment specialist National Processing ( NAP) for $1.4 billion, or $26.60 a share. The price is about $3 below National Processing's Monday close, partly a reflection of an unusual market situation in which the company is 83%-owned by publicly traded bank National City ( NCC). In early trading, National Processing was down $3.10, or 10.5%, to $26.25. The acquisition will align the acquiree's massive merchant-payment infrastructure with Bank of America's huge credit and debit card operation and is another major step by the Charlotte, N.C., bank to expand the reach and efficiency of its consumer franchise. Bank of America recently completed the acquisition of Northeast consumer lending giant FleetBoston. National Processing provides payment and processing services to about 700,000 North America merchants, representing nearly one out of every six Visa and MasterCard transactions done in the U.S. "This transaction will allow Bank of America to compete more effectively in the electronic payments business by creating immediate scale through National Processing's customer base and by using that company's technology platform to drive growth and improve servicing capabilities for both national and regional merchant clients," the company said.