USABancShares.com, an Internet-based bank that focuses on Generation X, is dipping even younger, targeting the adolescent market through a relationship with a financial portal for teenagers, DoughNet Inc.

The prominent online bank is looking to tap teens not only to sign them up as loyal customers, but also to interest their parents in doing business with it. USABancShares says it has teamed with San Francisco-based DoughNet, because the latter takes a family-oriented approach, letting parents set spending limits for their children in a way that the companies say helps teach financial responsibility.

DoughNet has been successful in "not only getting the kids' eyes, but the parents'," said Kenneth Tepper, president and chief executive officer of USABancShares. "I think that we'll get a lot of parents' accounts" through the relationship.

USABancShares.com recently replaced USAccess Bank as DoughNet's online banking partner. USAccess Bank, a division of Central Bank USA Inc., had been offering accounts through DoughNet since August 1999. Ginger Thomson, co-founder and chief executive officer of DoughNet, said USAccess Bank executives who had cut the deal with DoughNet left the company late last year, and the bank's "support of what we were doing seemed to wane."

USABancShares, which began offering accounts through DoughNet in May, plans to convert the USAccess Bank accounts by the end of the second quarter. Philadelphia-based USABancShares was "willing to create a product much more directly applicable to the teen market," said Ms. Thomson, a former investment banker who started the company with her husband. The bank lets teens open a bank account with just $1 and a parent or guardian's co-signature.

As with USAccess Bank, teens can spend their account money at selected online retailers. DoughNet, through its site DoughNet.com, has relationships with 80 online merchants, including J.Crew, CDNow, and Barnes & Noble.com. Account holders can also use the DoughNet system to donate to any of 11 nonprofit organizations, including the Rainforest Alliance and Rock the Vote. New with USABancShares is the ability to withdraw cash from the accounts. The two companies say they have introduced the first automated teller machine card specifically for teens.

"We really wanted to provide an account that would be accessible offline as well as online," Ms. Thomson said. "If you give someone financial flexibility, the balance is likely to increase."

USABancShares, currently issuing its regular ATM cards, will soon offer a trendy design incorporating DoughNet's logo. In the future, the bank may offer cards with pictures of popular musical artists, such as Ricky Martin or the Backstreet Boys.

The ATM card, which parents can refuse, caps daily cash withdrawals at $40, and refunds five surcharges imposed by ATM owners, up to $10 monthly.

Additionally, USABancShares is offering accounts with an annual percentage yield of roughly 5% and no monthly maintenance fees. USAccess accounts fluctuated around 3% APY and required a $50 minimum balance.

Before teaming up with a bank, DoughNet, which went live in June 1999, allowed parents to allot a portion of their credit card spending limit to their children. Today, a bank account is an option, and deposits can come in several forms - credit card payments from parents, automated clearing house transfers, mailing in checks, or depositing cash at ATMs that take outside deposits.

DoughNet has introduced a prepaid DoughCard - soon to be sold at physical stores - which serves as another deposit vehicle. The card's value can be deposited into an account by going to DoughNet.com and entering a particular code attached to the card.

USABancShares, one of two publicly traded Internet banks, is hoping that DoughNet - besides attracting parents - will help the bank establish banking loyalty early.

"They don't even know life without the Internet," said Alain Ferry, director of strategic alliances. "We know that when they start a banking relationship, they're not going to know a brick-and-mortar relationship."

DoughNet tries to use catchy graphics and teen-friendly metaphors to teach youngsters about the stock market and social responsibility. (The site suggests that members "get out there and show 'em your generation's not all about baggy pants, video games, and obscene rap lyrics.") The company says it is the only one offering online spending through a teen bank account.

Competitors include RocketCash Corp. and ICanBuy.com, which offer ways for parents to dole out money that can then be spent online, and Cybermoola.com, which provides prepaid online shopping cards.

"We believe that the shopping piece is already becoming fairly commoditized," Ms. Thomson said. "We really believe from a long-term perspective that people are going to want to unify the experience, meaning they'll want to take their financial life and function out of one source, rather than several different shopping systems. And we will offer every sort of vehicle that any of our competitors offers through our network."

As part of that one-stop shop model, DoughNet is planning to offer a custodial-based brokerage account that will enable teenagers to manage a small stock portfolio.

DoughNet, not committed to an exclusive relationship with USABancShares, may look for brick-and-mortar bank partners to smooth the process of depositing through ATMs.

For now, however, USABancShares is a great match, Ms. Thomson said. "They're a lot hipper than any other online bank," she said. "They want to show people that banking doesn't need to be the stodgy old thing they've always thought it was."

USABancShares, with $350 million in assets and $250 million in deposits, runs a number of cobranded and private-label Internet sites, including BowieBanc.com, a bank for fans of rock star David Bowie. The DoughNet alliance furthers that strategy.

"We're just optimizing and empowering other pre-existing brands," Mr. Tepper said. DoughNet "invests a lot of money in marketing their brand, and they invest a lot of effort in generating site traffic."

In a more cosmic observation, Mr. Tepper said: "The neat thing about the Internet is that I don't have to pick any one thing. It's not as if I have one branch and I have to figure out how to decorate it."

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