Though perplexed by chicken-and-egg questions, technology strategists find one pattern repeats itself: Creation (as in the horseless carriage, or the digital computer) tends to be a small part of a success story; momentum and multiplication happen later (assembly-line-produced cars, or the Microsoft operating system).

Mondex, which boosters predict will revolutionize cash, has entered that critical second stage. History will record National Westminster Bank of London as the inventor, but it falls to others to fulfill the dream of making Mondex's smart card into "global electronic cash."

At the front of that second-generation pack, with a vocal cheering section among its Mondex peers, is Wells Fargo Bank.

If any financial institution can pull this off, the thinking goes, it is the California bank with the distinctive stagecoach logo, a management team renowned for both innovation and cost management, and one of the strongest commitments to personal computers, the Internet, and advanced delivery technologies in general.

Wells Fargo & Co.'s flagship bank has taken the lead stake in Mondex USA. At 30%, it is larger than the 20% acquired by Chase Manhattan Corp., the nation's biggest banking company, with roughly three times Wells' $109 billion of assets.

In return, Mondex International has sent clear signals about Wells' and the United States' place in the global scheme.

Mondex USA was assigned the biggest chunk, 39%, of the London-based coordinating body's equity. (That percentage is to be cut roughly in half with MasterCard International's purchase of 51% of Mondex International.)

"The United States, as the biggest economy in the world, should have the largest stake," said Mondex co-inventor Tim Jones, who has gone on to run the retail banking group of Natwest UK.

At the creation of Mondex International last July, Mondex USA had only two owners - Wells, with controlling interest, and AT&T Universal Card Services. They joined 15 others as "global founders," but Wells was the big catch.

It was not lost on Mr. Jones and his Natwest colleagues that Wells Fargo is one of banking's most recognized brand names. A big contributor to that heritage was former marketing chief Richard Rosenberg, who went on to become chairman of rival BankAmerica Corp.

Wells president William Zuendt, who carried the Rosenberg legacy forward and has gained a reputation as the most wired senior executive in U.S. banking, said his interest in Mondex was piqued by a presentation at a MasterCard board meeting more than three years ago. When Natwest began soliciting partners, Mr. Zuendt responded and assigned to the project executive vice president Dudley Nigg, who has since replaced Mr. Zuendt on MasterCard's board.

"I think of Mondex as a coin replacement, not a debit card," Mr. Zuendt said in a recent interview. "It has to replace money at a cost nobody can undercut. Mondex is the only system I know that is cheap enough for cash."

It is also the only system of its kind operating both physically as a stored-value smart card and virtually through transmissions over phone lines and networks. That fits with Wells' high-tech home territory of Northern California and with its basic strategy. The bank has enrolled more than 300,000 on-line banking customers, half of them connecting over the Internet, and sees that total climbing into the millions within a few years.

"We need a payment solution for the Internet," Mr. Zuendt said. "Either the banking system will provide that, or someone else will."

For its early involvement and closeness to Natwest's wavelength, Wells garners a political reward.

Mondex USA president Janet Crane, who joined Wells as a senior vice president in late 1995, was elected vice chairman of Mondex International. (David Mills of Midland Bank, co-owner with Natwest of Mondex UK, is board chairman.)

Mr. Nigg, whose British roots may have helped Wells make a cordial connection with the London contingent, is chairman of the U.S. franchise.

Wells itself may have been the chicken (or was it the egg?) Mondex needed for the United States. The bank lent a credibility that helped attract the 20% participation of Chase and 10% each from First Chicago NBD Corp., Michigan National Corp., and Dean Witter, Discover & Co. (AT&T and MasterCard International are also at 10%.)

With these heavyweights on board, there is noticeably less sniping at Mondex and at least grudging respect, even from the Visa Cash camp.

"A lot of that has to do with Wells," said William Randle, senior vice president of Huntington Bancshares, Columbus, Ohio, who was recognized with Mr. Zuendt by Institutional Investor magazine in 1994 as a "master" of bank marketing.

"There aren't too many banks that really 'get it,' " Mr. Randle said, "and they do."

Ms. Crane said Mr. Zuendt and Mr. Nigg "really thought this through, and (Mr. Zuendt) put his money where his mouth is when we didn't have a clue if we would get government approval or get other companies to invest.

"AT&T also really stepped up at a high level of risk at a turbulent time for the corporation," Ms. Crane added.

She can claim some objectivity, in that she is relatively new to Wells after a year and a half at MasterCard and 11 years at Mellon Bank Corp. Known in those past lives as Janet Hartung - she was married last April - Ms. Crane, 42, had no smart card experience, having been steeped in network services for automated teller machines and card-accepting merchants.

"A lot of people moving into the business side" of electronic cash, she said, "are coming from debit card and credit card backgrounds. I view this as a nice extension, but there is a challenge - this doesn't look like the debit card or credit card business."

Mr. Zuendt hit hard on this point: The costly infrastructure of credit cards and merchant servicing would doom any true cash alternative.

"The credit card paradigm is too costly for a coin replacement," he said. Mondex's cash equivalency - the ability to transfer funds card-to- card or purse-to-purse without being centrally recorded - must have a "marginal cost that approaches coins."

Ms. Crane admitted to coming into Wells "fairly skeptical" of Mondex but said this was a quality sought by Mr. Nigg and Mr. Zuendt. "I'm certainly over the top now," she said of her current enthusiasm.

Ms. Crane and her counterparts - including senior vice presidents Keith Kendrick of AT&T Universal, Ronald Braco of Chase, and Bruce Nyberg of First Chicago - took time out for celebration in early December. The Office of the Comptroller of the Currency had approved the investments in Mondex by the national banks it supervises, and the ownership group held a press conference to declare Mondex USA in business.

But beneath the self-congratulatory surface was solemn resolve. As second-generation catalysts, the executives knew they would have to deliver chickens - payment infrastructures - as well as eggs - initial users. And they would have to do it both individually and collectively.

Mr. Nigg acknowledged the pressure to perform: "Everyone involved in Mondex International fully expects the U.S. to take a leadership role."

"These are all well-capitalized players making very significant corporate commitments," Ms. Crane said. "We are all agreed this will be a long-term commitment. Clearly, it's not going to be a smashing success in one year."

Ms. Crane often refers to 1997 as a "lab year that, practically speaking, will extend" into 1998 to establish "a business case that makes it compelling" for cardholders and merchants. Equally fond of the word "propel," as in "the power of this group will propel Mondex as the preeminent electronic cash payment system," she is determined to see product rollouts next year.

Effective with MasterCard's Mondex ownership and completion of related paperwork, Ms. Crane officially leaves Wells Fargo's employ to be 100% devoted to Mondex USA. She will initially stay close to Wells in a building a few blocks from its head office, overseeing about 20 ex-Wells people.

New people, some from other member banks, will gradually mix in, and Wells will "repopulate" internally for its own pilot work, Ms. Crane said.

Though wearing only the Mondex USA hat, Ms. Crane will travel widely as international vice chairman, hoping to bring back insights from Mondex programs in Australia, Canada, Hong Kong, and elsewhere. The U.S. company's modus operandi is already established: The leadership group meets at least every three weeks by conference call; a lower-level liaison group convenes more often; and the byword is cooperation.

"We have all agreed to share everything about what we are doing in the pilot phase," Ms. Crane said. "The day we have competition between owners will be a wonderful problem, but it won't happen soon. We don't want to build seven Swindons here," she said, referring to the English town that is well into its second year as Mondex's first public showcase.

For the lab year, each U.S. owner will take its own tack, AT&T in Internet payments, for example, and the Discover-Novus organization as a signer of retail merchants.

Chase will have an especially high profile as a participant in the joint, 50,000-card MasterCard-Visa test slated for New York City late this year.

Wells, which introduced Mondex to the United States a year ago in a pilot that has grown to 800 employee-cardholders and 22 merchants near the bank's San Francisco headquarters, has big near-term plans: expanding that "physical" program, going "virtual" on the Internet, and developing cobranded or campus-type programs with both physical and virtual components. The latter possibilities will be eased by a multi-application operating system - MAOS, pronounced "mouse" - now under development.

Mr. Zuendt described Wells' first effort as an "organic pilot," designed around a finite cardholder group and places they patronize near work - restaurants, a cookie store, a card shop, a Starbucks, ATMs. At this stage, such geographically confined systems make more sense than a more diffuse nationwide rollout, though standardization should assure interoperability and pave the way for signing national merchants like McDonald's.

Mr. Zuendt, a twice-a-day Mondex user, envisions it as something like the Dolby standard for recorded sound, a widely licensed and familiar seal of approval. "It has to be so inexpensively ubiquitous that any newspaper vendor can afford to accept it," he said.

How quickly will it happen? Wells' No. 2 man was noncommittal but conceded, "It's a lot slower than I'd like to see."

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