Cartel Network, which survived against all odds in promoting a national electronic banking program for smaller financial institutions, is trying to do it again on the Internet.

Joseph E. Wolfson, chairman and chief executive officer of Cartel and its administrative entity, Integrated Delivery Technologies Corp. of Buffalo, has laid out another bold objective: to make on-line and interactive services a relative snap for independent banks, savings institutions, and credit unions.

Doing much of the design and product development work himself, the payment services entrepreneur has created a Web site, CartelWorldNet.com, that in its formative stages outlines clearly where Mr. Wolfson is heading.

What he did with Cartel Network-which has 72 participating financial institutions and thousands of automated teller machines and other service points-he wants to replicate in cyberspace.

"It makes total sense for us to be doing this," said Mr. Wolfson, undaunted by the fact that banks have loads of system vendors from which to choose, many bigger and richer than Cartel.

He sees Cartel's focus and uniqueness as an advantage. And if anyone doubts his ability to establish credibility and market presence in a hurry, there is the fact that two of the biggest and most powerful technology suppliers-AT&T Corp. and International Business Machines Corp.-are on board as strategic partners.

"I've been looking at all the announcements in this area, and we have something different," Mr. Wolfson said in an interview. "This isn't going to be priceline.com with mortgage rates.

"This is going to be a network for the banks, not something that will impinge on the banks. I can do things for smaller banks and savings institutions and credit unions that they can't do or aren't doing themselves."

It might all seem quixotic if Mr. Wolfson and his longtime colleague, president Craig S. McIntyre, had not been through this before.

In the mid-1970s, under the aegis of the defunct Erie County Savings Bank in Buffalo, they created Metroteller, one of the pioneering automated teller machine and in-store electronic banking networks. They ran it for about a decade and a half, until the network, dominant in much of upstate New York, was sold to a superregional powerhouse, MAC.

The executives resurfaced in late 1994 with a business plan for what would become Cartel Network, assembling an initial nucleus of major western New York supermarket chains and community financial institutions they had known from the Metroteller days.

They picked up financial backing along the way, notably from the Chicago investment bank William Blair & Co., and won endorsements from various state trade associations-a marketing effort that continues far afield from their base in the Northeast.

Mr. Wolfson and Mr. McIntyre parlayed their customers' discontent with major bank-owned ATM and point of sale networks, particularly over matters of pricing, into what is now one of 10 such electronic banking systems operating on a national scale.

Most of the current financial institutions and participants are small and from New York or nearby states, but to Mr. Wolfson, that is a more than adequate foundation "to go anywhere and serve anybody."

With distance no object on the Web, "we are not limiting ourselves geographically," Mr. Wolfson said last week. "We will go anywhere in the country."

Nor does he discount the possibility of serving larger institutions. The Cartel Network is adding one in M&T Bank of Buffalo, the result of $20 billion-asset M&T Bank Corp.'s pending acquisition of $590 million-asset FNB Rochester Corp., a Cartel member.

But the numbers of smaller institutions are more vast, and Mr. Wolfson said the way CartelWorldNet "provides value may convince some institutions that have been on the fence" that they should finally come into Cartel.

Mr. Wolfson describes CartelWorldNet as a combination of a computer service bureau, an Internet hosting service and design house, and a financial hub for consumers along the lines of what have come to be known as aggregator sites.

The term aggregator usually applies to brand names in a more major league, such as America Online, Yahoo, or Quicken.com.

Top service bureaus such as M&I Data Services and rival automated teller machine networks such as NYCE in Mr. Wolfson's backyard offer at least some elements of the support he has in mind.

Software companies such as Corillian Corp., nFront Inc., and Digital Insight market interactive technology to the community bank and credit union crowd. Some have won endorsements from state community bank trade groups, as Cartel Network has done.

Just last week, Internet Banking Communications LLC, a joint venture of bankers' banks that provide correspondent services to smaller institutions, announced an on-line business banking service in conjunction with Home Account Network Inc.

Mr. Wolfson is convinced he has an opening, and other vendors are hanging in for the same reason.

Ted Spooner, CEO of Corillian in Beaverton, Ore., said that for various business and cultural reasons, community banks "may be the last on the Internet banking bandwagon." Credit unions have moved faster, apparently more responsive to members' demands for on-line services.

But he said he expects that with the resolution of year-2000 problems and a return by bankers to more forward-looking concerns, "the gates may come down in the fourth quarter. Once the community banks start coming in, there will be more business than all of us vendors will be able to handle."

"The Internet can do so much" for Cartel's clientele, Mr. Wolfson said. "They see it as a great opportunity. They want to get into it. But for whatever reason-they are slow, they are not ready, they are nervous-they haven't moved.

"I can say, 'We can do this for you, take the mystery out of it, and get it done quickly and at low cost.'"

In a press release, Mr. Wolfson essentially told the world what he is doing. The entry strategy was described as "conservative."

Phase One of CartelWorldNet.com is, like many banks' initial forays on the Web, informational, with links to participating institutions and comparisons of various products.

Mr. Wolfson calls Phase Two "interactive," with account openings, banking transactions, loan applications, and more. He expects eventually to link to retailing and other nonfinancial activities, and to activate an automotive shopping service, CartelAuto, that has long been on his drawing board.

Phase Two is a few months away, Mr. Wolfson said.

"We have to walk before we run," he said. "We have plenty of things to do. People have to deal with year-2000. Then we'll move. We want to make sure the Internet piece is perfect when we do move."

Yet he said Cartel will not neglect its electronic banking core. "You'll be seeing some major announcements with food chains," he said. "We think we will be the first network that has been able to pull this (Internet service) off as a truly complementary business."

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