MasterCard International has added three participants to its remote banking and electronic bill payment service.

The bank card association announced at this week's American Bankers Association national bank card conference that Signet Banking Corp. of Richmond, Capital Bancorp, of Miami, and Space Coast Credit Union of Melbourne, Fla., will offer the service.

The announcement that the three would join Chemical Banking Corp., which became the first to sign up in July, was emblematic of the association's strategy to offer a wider range of payment systems than just credit cards.

Visa Offers Service

"There are others who aspire, but I feel MasterCard has the momentum right now," said Glenn Santmire, senior vice president of remote banking at the association, noting that Visa U.S.A. also has initiated a remote banking line.

Master Banking from MasterCard is the product of an alliance with Checkfree Corp. of Columbus, Ohio. It enables a bank's depositors to electronically pay bills and manage accounts via personal computer or telephone.

Thomas J. Flood, executive vice president of Capital Bancorp's retail banking group, said his $1.2 billion-asset institution expects to collect fees and attract new customers by becoming the first bank in the South Florida market to offer such a service.

Bankers must press the credit card associations to find a "failsafe method" of curbing fraud, the nation's third-largest merchant processor told the American Bankers Association national bank card conference in Washington.

"I don't think the solutions that have been bandied about will work," said John Elliott, chairman and chief executive officer of Card Establishment Services, Melville, N.Y.

He was referring to a range of antifraud measures from encrypted identification numbers already in use to such proposed measures as fingerprint identification of the customer at the point of sale.

In a well-attended session on expanding card acceptance by nontraditional merchants, Mr. Elliott said the growth will be stunted unless the payment system is seen as secure.

Sources of Transaction Growth

The discussion centered on new categories of merchants like supermarkets, government agencies, fast-food chains, and movie houses, which the credit card industry is looking to for future transaction growth, now that the growth in card issuance is slowing down.

Mr. Elliott complained that crooks are able to figure out ways around the current fraud control techniques, which have a "useful life" of two years or less. He said the goal should be a useful life of five years.

Verification Program

Rosalind L. Fisher, executive vice president of delivery systems at Visa U.S.A. said bankers are pleased by the savings of $30 million in the five months since Visa introduced its card verification value program, in which an encrypted number is used to verify that a card is not counterfeit.

She maintained the card are succeeding in staying one step ahead of the criminal element.

Citicorp's top credit card executive warned at an annual industry gathering in Washington that gathering in Washington that issuers face a "period of prolonged hostility" in which cost controls will be increasingly important.

Richard J. Srednicki, general manager of Citibank's MasterCard and Visa, told the American Bankers Association national bank card conference that Citibank intends to shave $100 million from its cost base next year, as it girds for increased competition for market share.

Citibank is by far the largest issuer of bank cards in the nation, with a managed portfolio of nearly $37 billion.

Credit Losses Cited

The executive cited a study conducted by Booz, Allen & Hamilton Inc. for the ban that found Citibank's card operation compared favorably to those of its competitors by many measures of cost, but lagged behind the industry in cost of funds and credit losses.

He said the higher cost of funds was due to a longtime strategy of securitizing credit card loans, which reduces the bank's need to hold capital against its credit card activity.

The higher credit losses were due to a deliberate high-risk, high-return strategy, he said.

While competition may be fierce, Mr. Srednicki said, money can still be made from credit cards properly targeted to profitable customers. "Consumers are willing to pay for value received" he said.

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