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Nationwide, the world’s largest building society, is introducing

cheaper pricing for customers who buy its services via the web.

The company said it was looking at offering better interest rates and

scrapping establishment fees for products taken out and maintained over

the web.

Nationwide spokesman Mark Hamilton said: ’Accounts should be priced

according to cost, and it is cheaper to run an account over the

internet.’ Nationwide already has 100,000 online customers.

The announcement is further evidence that high street financial

institutions are responding to the threat posed by internet banks such

as Prudential’s Egg and The Co-op’s Smile.

Hamilton said: ’It is forecast that there will be one million online

bankers by the end of this year and that will rise to six million by the

end of 2006. We want to remain a big player in that.’

Nationwide is looking to introduce the new price structure early next

year as part of a range of improvements to its internet banking service.