Cirrus Chief Ready For a Dogfight

When big banks were deciding which of two emerging, nationwide ATM networks they would join in 1982, Chase Manhattan Bank included vice president G. Mundt 3d in discussions with both organizations.

Chase eventually chose Plus System Inc. But Mr. Mundt chose Cirrus System Inc. He went to work for newborn Cirrus in 1983, and in October he became the network's third president and chief executive officer.

Looking ahead, Mr. Mundt will plot moves in the continued domestic and global dogfight with archrival Plus.

Glancing back, the executive is gratified with the rapid growth achieved by Cirrus in less than a decade.

Growth Rate a Surprise

"I thought [ATM networks] would really be a growth area," Mr. Mundt said, explaining his decision to join the network. "But I didn't envision it would ever get to where it is now."

These days, Downers Grove, Ill.-based Cirrus links 52,500 teller machines, switches 15 million transactions a month between bank members, and has 148 million cardholders. Transaction volume has soared, partly because of a duality agreement last year with Plus that enables the two networks to display both logos on their cash machines.

Overseas, Cirrus gained marketing clout when it became a wholly owned subsidiary of MasterCard International in 1988. But Mr. Mundt is aiming to further exploit the link-up.

So far, Cirrus has teller machines in 25 countries: 14,000 machines in Europe, 1,400 in Central and South America and the Caribbean, and 500 in the Asia/Pacific region.

Impediment to Volume

These machines are accessible for cash advances only with a MasterCard or one of its affiliate cards (such as EuroCard) that carry the Cirrus logo. As a result, international transactions make up just 2% of network volume.

But that will change, Mr. Mundt said, because several European banks are scheduled to begin issuing Cirrus-marked ATM cards soon.

His goal: By the end of next year, 30,000 machines in 45 countries outside the United States and Canada. Mr. Mundt believes potentially 15 to 20 million cards will be usable in Cirrus machines outside of North America by the end of next year.

More Switches Needed

To reach its goal, Mr. Mundt recognizes, Cirrus needs to build overseas switches - computer facilities that route transactions between an ATM terminal and a card-issuing bank's host computer. Other requirements: the network's equipment must meet foreign operating standards, and its ATMs may need to be programmed to communicate in languages other than English.

"We want to allow for regional differences with a global umbrella," Mr. Mundt said.

Internationally, he said, Cirrus' selling job isn't as tough as it was 10 years ago in the U.S. Many countries already have shared bank ATM systems domestically and they want access across their borders.

"It's not the same phenomenon we had here when banks could see perceived value, but asked, |is anybody going to use it?'" he said. "People and banks over there have heard about [networks] and want" them.

Demand Is Established

Stateside, transaction volumes have soared, partly because of the Cirrus-Plus duality agreement. "There's more convenience, more value and the cardholder is using the system more often," Mr. Mundt observed.

Indeed, Cirrus switched 60 million transactions in 1989, before Plus and Cirrus opened their ATMs to the competitor's cardholders. Last year, that number swelled to 100 million, and Mr. Mundt estimates 1991 transaction volume will reach 160 million.

Nonetheless, competition remains fierce, partly because of this year's spate of big-bank mergers, which in some cases have combined one Plus bank with one Cirrus institution - and vice versa.

"When two banks get together, it's not always obvious who will be the winner," Mr. Mundt said. So both networks attempt to woo the survivor and hope for the best.

Playing Both Sides

To boot, the competition has "gotten more sophisticated," he said. In previous years, Plus and Cirrus bragged about who had the most machines and the best locations. But ATM duality has made that a moot point.

"Now we compete on service quality, brand awareness and international coverage," Mr. Mundt observes.

PHOTO : G. HENRY MUNDT 3D is calling the shots in Cirrus's continuing competition with Plus System Inc., its chief rival.

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