Enough about hype. Mondex U.S.A. president Janet Crane speaks in the more measured tones of market reality. Ms. Crane, who moved to the top job at the domestic Mondex franchise from Wells Fargo Bank, its lead shareholder, said her current focus is experimentation. The seven Mondex U.S.A. owners are in search of smart cards' "commercial proposition."

Her words in a recent telephone interview were more sober than those at a December press conference proclaiming the formation of the U.S. organization. Ms. Crane predicted a national rollout of the stored value technology in 1998.

Now her forecast is for "more activity going on in 1998." Experience from forthcoming pilots will determine how quickly consumers will see Mondex across the nation. "We'd rather get it right small," she said.

The technology, invented and developed at National Westminster Bank of London, battled the odds to become one of the world's three leading electronic cash alternatives, and to some eyes the most advanced.

Early on, Mondex's ability to transfer value anonymously and without audit trails attracted criticism from people concerned about fraud risks. Even so, banks in the United States, Canada, Australia, and Hong Kong bought into the venture.

Spun off by Natwest last July, Mondex International became the property of 19 banks on four continents. MasterCard International bought a 51% interest in the international venture and pieces of regional enterprises in the United States and Asia. There is room for more: Two Irish banks bought in last month, and there is interest in Japan.

Mondex U.S.A. brought together units of Wells Fargo & Co. with 30% ownership, Chase Manhattan Corp. at 20%, and five 10% owners: AT&T Corp., Dean Witter, Discover & Co., First Chicago NBD Corp., Michigan National Corp., (a subsidiary of Mondex International charter member National Australia Bank), and MasterCard.

Visa Cash and Proton - developed by Belgian banks and licensed by American Express Co. - are Mondex's main competitors.

The first Mondex pilot, which started in summer 1995 in Swindon, England, reached 10,000 cards. Natwest and its Mondex U.K. partner, Midland Bank, said they were pleased with the results, but the card total fell far short of what may have been overly optimistic expectations.

Results of the Visa Cash experiment last summer in Atlanta were also considered mixed, at best. Accordingly, expectations have been lowered.

The Mondex test in Guelph, Ontario, took less than three months to get more than halfway to its first-year goal of 10,000 consumers. Mondex in Hong Kong is also ahead of plan, with 41,000 cardholders as of April.

In the United States, Wells Fargo took the first plunge early last year with a modest pilot at merchant locations near its San Francisco headquarters, but Chase and AT&T are hurtling into the spotlight.

Chase's Mondex launch in New York City, said to be on schedule for October, promises to be the premier showcase of smart cards in the United States. Chase will issue Mondex cards and, to test interoperability, Citicorp will offer Visa Cash. There will be 50,000 cards and 500 merchants in all.

Technical challenges and the MasterCard-Mondex shake-up forced the companies to drop plans to launch the trial last year on Manhattan's Upper West Side, but now they are "right on target," said Ms. Crane.

Meanwhile, AT&T Universal Card Services in Jacksonville, Fla., plans to test Mondex over the Internet this summer. With Hewlett-Packard Co. and Mondex International, AT&T developed an "open trading protocol" based on the Secure Electronic Transactions standard for on-line credit card purchases.

"The payments industry hasn't developed secure and easy-to-use payment structures that are economical" for on-line networks, said Keith Kendrick, AT&T Universal's senior vice president of electronic commerce. "Technology like Mondex can turn the Internet from an information environment into a buying environment."

The first phase of the test will involve the 400 AT&T employees now using Mondex cards in a cafeteria and vending machines. Only a couple of virtual merchants will be included.

Mr. Kendrick expects content and software providers to participate initially, followed by game vendors like Sega or Nintendo. The pilot is designed more to prove the technology works than to test its popularity.

With smart card readers attached to consumer and merchant computers, an electronic exchange of value can take place with the click of a mouse.

Ultimate rollout plans "are contingent on what we learn in the tests," Mr. Kendrick said. "We believe the future of Mondex is in a multi- operating system that handles electronic cash, universal credit or debit, and loyalty."

To that end, developers at Mondex International in London are hatching a platform for multiple applications, to be available next year. Mr Kendrick said Mondex should be ubiquitous within five years and "multiple applications will be a big driver in how it takes place."

While Wells Fargo continues its San Francisco trial, Ms. Crane said it may venture into a corporate or college campus pilot or a cobranding deal with a major merchant. "We have some very warm bites," she said. "They get the opportunity Mondex gives them."

The remaining partners are in discussions but have not announced concrete plans.

Mondex has the advantage of "major institutions deploying and testing the technology," said David Weisman, senior analyst at Forrester Research, Cambridge, Mass. But as with any new payment vehicle, acceptance "will take time." He noted it took nearly 25 years for automated tellers to be widely used, and 10 years for debit to take off.

"The challenge is how (Mondex) will work in a Java card world," Mr. Weisman said. Sun Microsystems Inc.'s Java computing language has been endorsed by Visa and a host of technology vendors that question whether Mondex can match its flexibility.

But Mr. Kendrick answered the criticism. "Java will have an important role to play in Mondex," he said.

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