The sponsors of the New York City smart card pilot are fighting bad press.

MasterCard, Visa, Chase Manhattan Bank, and Citibank faced skeptical public reactions from the day of their official introduction last October.

Newspapers reported on wary New Yorkers' reluctance to accept free promotional cards on street corners. A Money magazine writer found several places to use her card but complained the transactions took too long.

About four months into what was touted as the first major showcase of cross-system chip card interoperability, the regional weekly Crain's New York Business declared it a failure.

Chase, a co-owner of MasterCard International's Mondex USA affiliate, and Citibank, sponsoring the Visa Cash technology, each have issued about 40,000 cards in the bustling residential areas west of Central Park.

Officials on both sides have said they planned for the likelihood that it could take many months for the cardholders and more than 600 merchants- many of the small or mom-and-pop variety-to catch on fully.

Speaking in a nationwide or industrywide context, Diana Knox, the Visa U.S.A. vice president overseeing chip activities, told an American Banker retail banking conference in Phoenix last week that "full-scale conversion of debit and credit portfolios to smart cards is five to 10 years away."

The business planners may not have anticipated the shorter time horizons of the news media.

"Some of the press I read on the plane coming out here said that the work we've done in Manhattan hasn't been successful," Chase Manhattan Corp. vice chairman Donald Boudreau said at the American Banker conference.

"We didn't start that with Citicorp and Visa and MasterCard to set the Manhattan market on fire," Mr. Boudreau said. "What we are really trying to do is gauge consumer and merchant reaction-it has been a tremendously successful endeavor in that vein.

"We are some time away from customers' queuing up to use it. ... I am optimistic that it will catch on."

Last week, MasterCard and Mondex pushed an envelope to call favorable attention to New York's place in the smart card universe. MasterCard chief executive officer Robert Selander conducted a transaction at a Manhattan restaurant to prove, he said, that "Mondex is the only viable, global electronic cash program that will allow a customer to carry multiple currencies and conduct transactions while traveling to a foreign country."

Mr. Selander's card was issued by Hongkong and Shanghai Banking Corp. with Hong Kong dollars registered in its chip. He loaded the card with U.S. dollars at a Chase ATM and was able to use it locally.

Visa has questioned the hype about Mondex's multicurrency capability, saying demand for small-value transactions will mainly be within countries.

Eric Tai, Hongkong Bank's head of personal banking development, said the feature will help Mondex be perceived as more convenient and flexible. Ronald Braco, senior vice president of Chase, said such capabilities "further enhance" Mondex, making it "the most powerful and useful card a consumer can carry."

To the north, Mondex Canada officials have also been touting the multicurrency feature, expecting it to be useful for travelers on both sides of the U.S. border.

Mondex Canada in mid-February marked the anniversary of the pilot in Guelph, Ontario, where 560 merchants and 12,000 cardholders participate and where $2 million of electronic cash has been issued.

Several major Canadian bank implementations are expected in coming months, including conversion to Mondex of the Kingston, Ontario, electronic cash system from the competing Proton technology.

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