As bankers and others continue to debate the merits of new forms of money like smart cards and Internet cash, expectations for the new technologies are coming down.

Citicorp chairman John S. Reed may have been the first to signal the trend in a speech last fall, when he said on-line banking is a generation or two away from becoming truly mainstream.

Even as numerous banking trade groups and regulators have set up committees, task forces, and research groups to monitor emerging payment systems, the industry consensus leans decidedly toward wait and see.

The reasons given for electronic cash's slow acceptance: The public is scared of being ripped off by computer hackers; it prefers the anonymity of physical cash; and it clings to the belief that coin and currency are simply more practical.

But examples of cash alternatives that appear to be flourishing can be found in isolated pockets at institutions of higher learning and on the highway.

Stored-value and debit card systems at many colleges and universities give students access to, and let them pay at, cafeterias, parking lots, and vending machines.

The first wave of these systems were based on the magnetic-stripe technology used on standard bank cards. But more colleges are looking at smart cards and their multifunction capabilities, said Kevin Mullen, administrator of the National Association of Campus Card Users, Durham, N.C.

Mr. Mullen said, "Almost all (major universities) have some type of card system in place, and many are looking to upgrade their capabilities, especially since smart cards are on the horizon."

The sheer market power wielded by these systems in university towns caused state legislatures in Texas and Illinois last year to enact laws ensuring access to the systems for local merchants near the campuses.

Not coincidentally, banks have stepped up their interest in college-card systems. In one of the most ambitious projects to date, PNC Bank Corp. will spearhead a project to issue 35,000 smart cards to University of Pennsylvania students in Philadelphia this fall for identification and electronic purse applications.

On the roads, electronic toll collection systems appear to be catching on faster than anticipated. These systems typically involve a small transponder affixed to a car's windshield that communicates with a device at the toll booth that automatically debits a passholder's account without requiring the vehicle to stop.

The introduction last year of the E-Z Pass system for highways and bridges in the New York metropolitan area met at first with skepticism from public and press. But now 600,000 electronic tags have been issued, and the bridge and tunnel authority claims E-Z Pass "members" have shrunk their rush-hour waiting times down to seconds.

Once again, some banks are glomming on to a revenue opportunity while simultaneously gaining some insight into consumer behavior with cash alternatives.

In the case of E-Z Pass, Chase Manhattan Corp. is working with MFS Transtech, a toll-collection technology firm that recently won the contract to administer the system for New Jersey's toll roads starting next year.

The bank will be paid about $125 million over eight years to manage the system's payment processing and build and staff E-Z Pass service centers.

Susan Webb, senior vice president in Chase's global payment and treasury services division, said the E-Z Pass project and stored-value campus cards are examples of "closed systems," which are expected to take off before more open, truly universal cash technologies.

"The fact that E-Z Pass is a closed system helps us move forward rapidly-it propels consumers into action," said Ms. Webb. "It gets around the chicken-or-egg problem of 'the consumer doesn't have it, so the merchant doesn't want it.'"

Participation by banks in these systems also helps build consumer confidence, she added.

"We think the open systems environment is the most beneficial to consumers and to the vast middle market of merchants that tend to be the largest dealers in coin and currency," Ms. Webb said. "We want to use these closed systems as a stepping-stone to a more open environment."

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