NationsBank Corp. has become the first bank to join Visa Interactive and Block Financial Corp. in their pilot program to develop a PC-based personal finance and home banking product.
NationsBank initially plans to offer the service in Texas beginning sometime next year. The bank, which announced the deal late last week, will eventually roll out the service to the rest of its far-reaching operations but has not yet announced a time-table.
"We view electronic banking as a major tool in our effort to make banking more convenient for customers," said. Kenneth D. Lewis, president of the Charlotte, N.C.-based bank company. "It is an easy, time-saving way for our customers to access their accounts wherever they have a PC."
The benefits of this alliance for NationsBank are clear: fee income potential and the perception that the $164 billion-asset bank is a leader in the growing home banking market.
As for Visa Interactive, the signing of the southeastern banking giant is a big plus for the nascent service.
Visa Interactive, the recently formed electronic banking and bill payment subsidiary of Visa International, last month joined up with Block, a subsidiary of H&R Block, to develop home banking and electronic bill payment software that Visa members can offer to their customers for a fee.
"I couldn't be more pleased about Nations having signed an agreement with us," said Carl Pascarella, president of Visa U.S.A. "The reason is that Nations is strategically very well placed to take maximum advantage of the facilities and capabilities that Visa Interactive has to offer. They've got the size, they've been at the forefront of new product offerings, and they've got a vision of where banks are going to be into the late '90s."
In Texas, where NationsBank will initially test the service, the need for a good home banking product is a competitive issue.
"Texas is a highly competitive market," said Cynthia Montgomery, vice president and manager of marketing research and development for NationsBank.
For example, Comerica BankTexas signed up for Interactive Transaction Partners' home banking and bill payment service early last month.
NationsBank will be competing head to head with Comerica for PC-literate consumers who want to do their banking at home.
The software NationsBank will be making available, based on Block's "Managing Your Money" product, will allow customers to check account balances, get mid-month statements, transfer funds, pay bills, and send electronic mail to the bank -- the typical functions found on most home banking software offerings.
To encourage banks to sign on to its service instead of the competition's, Visa Interactive is offering a "private label" approach, by which the software that banks make available to their customers carries the bank name, not the Visa name.
The bank-name branding played an important part in NationsBank's decision, said Ms. Montgomery.
"We want our customers to feel like they've been to NationsBank when they use this service," she said.
NationsBank will charge users a monthly fee for the service, but it has not yet determined the amount.
"NationsBank Managing Your Money will be easier to use than the current PC-based offering," said Ms. Montgomery. "The hardest thing about these services is the discipline of entering all your transactions. But with NationsBank Managing Your Money, customers will no longer have to enter their own transactions. Instead, the bank will download the information to the customer's PC.
"We really feel that we have to provide a variety of channels -- including screen phones, PCs, interactive TV, PDAs, ATMs, and branches -- and let customers choose the channel they want for any given transaction," she added. "This announcement shows NationsBank'scommitment to offering alternative delivery channels."
