MasterCard intends ATM network as laboratory for debit inventions.

MasterCard member institutions stand to gain from the association's acquisition of BankMate, a Midwest electronic banking network, officials say.

MasterCard International intends to use the St. Louis-based regional network as a testing ground for various debit and point of sale initiatives.

"We're managing the consumer relationship, the merchant relationship at the local level," said Ed Hogan, senior vice president of the New York-based association.

"That develops a whole new expertise for us that is clonable for many other of our members," he added, referring to banks that may want to use the marketing package in their regions.

MasterCard's announcement earlier this month that it was the successful bidder for Monetary Transfer System, the company that operates BankMate, surprised many industry insiders, who expected the network to merge with another, adjacent regional network like Cash Station Inc. or Magic Line Inc.

BankMate was put on, the block by its owner banks: Boatmen's Bancshares, Mercantile Bancorp, and United Missouri Bancshares. MTS solicited MasterCard's bid, said Mr. Hogan.

MasterCard officials characterize the successful bid as a win for the industry - keeping nonbanks out.

"Banks view us as a neutral party, not a competing bank coming in and doing their processing," said Arthur D. Kranzley, general manager of MasterCard's debit services and chief executive of its Maestro U.S.A. debit affiliate.

"We were also able, uniquely I think, to offer some control to the banks by retaining all the BankMate brand name, as well as retaining the board of directors, which we are expanding to get more representation."

Though MasterCard officials said it was too early to disclose any specific plans they have for BankMate, they said all of the efforts would center on the development of on-line point of sale debit use.

"There are a lot of things the regional networks do better than a national network like Maestro," said Mr. Kranzley.

Locally, networks can educate banks about consumer research on debit, he said. They can develop awareness of regional brands, information about regulatory actions on a state level that affect the banks, as well as information on consumer activation issues.

"Regional networks perform these functions extremely well," Mr. Kranzley said. "We see this as our chance to gain these local areas of expertise, and parlay them to our members in other areas of the country."

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