Continuing to confound electronic banking industry skeptics, the Cartel network has signed 14 more financial institutions, and its momentum is not slowing, said chairman and chief executive officer Joseph E. Wolfson.
The 14 institutions-primarily small banks and credit unions in upstate New York areas like Buffalo, Elmira, and Oneida-bring Cartel's direct bank signings to more than 30. Mr. Wolfson sees that reaching 45 by yearend.
In addition to the direct signings, Cartel has won endorsements from community banking trade associations in the Northeast, with a total of more than 400 member institutions. Mr. Wolfson said that number will rise by more than 1,000 after he completes at least four more trade group signings in other regions by yearend.
"We are three years old this month and didn't start operations until January 1995," said Mr. Wolfson, who set up the Cartel operating company, Integrated Delivery Technologies, in Buffalo with longtime colleague Craig McIntyre, its president.
"I can't think of too many other networks that popped up in the last 13 or 14 years," Mr. Wolfson said. "This is a consolidation-driven market."
He and Mr. McIntyre made their mark in the 1970s at Metroteller, a pioneering electronic banking venture that was eventually sold to Electronic Payment Services Inc.'s MAC network. They returned to the business as entrepreneurs hoping to make life a bit difficult for the powerful, bank-owned regional networks like MAC and NYCE.
Their timing was ideal for tapping into the resentment of smaller banks at the pricing policies of the networks and the proclivity of larger ATM- owning banks to impose surcharges on automated teller machine transactions of other banks' customers.
Cartel also benefited from the operations support of Affiliated Computer Services Inc. of Dallas, now a minority shareholder in the company, and financing from William Blair & Co., Chicago.
Mr. Wolfson contended Cartel has done the groundwork to establish itself as a "legitimate contender," looked to by disaffected financial institutions and retailers as "the alternative network," especially for those who "resent paying fees to networks controlled by big banks they may be competing against."
Cartel said it recently completed electronic connections to 189 Tops supermarkets in New York and Pennsylvania, and by early next year will add 43 Finast supermarkets in Ohio and 31 PriceChopper stores in Massachusetts and Vermont, among others. The Cartel logo is posted on 16,724 terminals at 10,633 locations in 48 states.
The company also said it has opened 10 "No Surcharge" ATM locations for participating banks in New York State.