Is Gary M. Austin a hero for creating a relationship card that could bring banks thousands of new accounts with interest-free deposits? He just may be. Austin's HERO Inc. is gearing up for an Atlanta pilot test. And he plans totake the card national in 1997.

The HERO card-an acronym for Health, Education, Retirement Organization-was created to help people save money. It can be read by any point-of-sale (POS) card reader and will give consumers a merchant- sponsored rebate with any transaction. The rebates, projected to be about five to ten percent of the transaction cost, would be automatically deposited into an account with the participating financial institution. Account interest, or a percentage of the customer service charge, would go to participating banks.

After a year, customers can access the savings or allow them to be rolled directly into an Oppenheimer Funds investment account. "Banks need to become more like financial concierges for their customers," says Brad Oates, vice chairman of Bluebonnet Savings Bank in Dallas. "So everything that a bank can do for its customer base that saves the customer time, money, or gives the customer information is valuable." Bluebonnet is considering investing in the program and coordinating a Texas rollout of the HERO card, he says.

No purchases can be made with the card, so there are no credit risks. Participation would allow financial institutions to expand their customer base and provide information for marketing and cross-selling opportunities. Banks would be responsible for sending quarterly account statements to HERO customers detailing credits to the account.

The HERO card will be offered to Atlanta residents in the third quarter of 1997. Multiple national retailers-including a discount department store, a convenience store and possibly a pizza chain-will be signed on to the program before the Atlanta pilot, Austin says. The relationship cards could eventually be combined with bank debit cards and smart cards to reduce the amount of plastic in consumers' wallets.

The biggest risk for banks is the concept. "If people don't use the card, then you're out your issuance cost," Oates says. "The whole bet is, will people use the card if it's easy to use?"


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