USAA Federal Savings Bank, moving ahead with its remote, or "branchless," banking strategy, has joined MasterCard International's home banking program.
The bank, initially a credit card specialist but increasingly seeking full-service customer relationships, will use MasterCard's Master Banking system for customers making touch-tone telephone connections.
The consumer banking unit of United Services Automobile Association, an affinity insurance company for past and present military officers and their families, began a 50-employee test of Master Banking last September. It recently extended a telephone bill payment service to some customers, under the name USAA BillPay, and is planning a broader offering via personal computer.
"Master Banking is tailor-made for USAA Federal Savings Bank's customers, since it provides convenient banking services in remote locations around the country," said Keith Myers, senior vice president of the bank in San Antonio, Tex.
USAA is the 18th Master Banking member. Twelve of them are "live" on the system, and 10 have allowed MasterCard to disclose their names, which are listed alongside this article.
MasterCard is vying for banks' allegiance with Visa U.S.A.'s Visa Interactive venture, and with the competing offerings of nonbank technology suppliers.
Visa said it has signed more than 40 financial institutions. Of the few that have gone public, the most prominent is NationsBank Corp.
The two bank-owned associations argue as to which is out front. MasterCard's list includes Chemical Bank, which sold MasterCard its back- office payment processing business, and Wells Fargo Bank.
Another arrangement with the Independent Bankers Association of America could yield large numbers of smaller participants in Master Banking.
USAA adds prestige to the MasterCard lineup. The parent insurance company was built from the start in 1922 as a remote service provider. Rather than building an agent network, it dealt with its member-owners - policyholders - by mail and progressively by telephone.
After broadening its service portfolio to include mutual funds and real estate, the insurer opened USAA Federal Savings Bank in 1983. The bank has 1.7 million customers for its credit cards, mortgage loans, consumer loans, and other services.
It ranks 20th among bank card issuers, and first among thrifts in that business, with about $2.8 billion of outstanding loans. It had $4.2 billion of total assets at midyear 1994.
About two years ago, bank executives led by president Jack M. Antonini began detailing a "direct banking" strategy aimed at capturing primary relationships with customers using mail, phones, direct deposits, and automated teller machines.
Now branded as USAA DirectBanking, the package includes ATM services, debit cards, telephone-voice response, and remote banking services.
Traditional banks that have gone the nonbranch route, such as Midland Bank of London's First Direct unit and Huntington National Bank of Ohio's Huntington Direct, borrowed some ideas from USAA.
"With only one physical bank branch, remote delivery of financial services is our way of life," Mr. Myers said. "As a result, USAA has always embraced remote banking services and Master Banking is a perfect fit with that strategy."
He said Master Banking's convenient access via toll-free telephone number and its large network of participating merchants drew USAA into the program.
"USAA's decision underscores the flexibility of the service to accommodate current and future remote banking needs," said A. Christian Fredrick, the MasterCard senior vice president in charge of Master Banking.
MasterCard, meanwhile, has cultivated a close relationship with USAA. Mr. Antonini is on the association's board of directors.
USAA said its personal computer service, also via Master Banking, is currently in a test mode. The PC version includes bill paying, access to and downloading of checking and credit card statements, funds transfers, check reorders, and other information.
