Ask electronic funds transfer executives what's on their minds these days, and they will tell you Darwin, as in Charles Darwin and the survival of the fittest.

Considering the industry consolidation that has placed perhaps half of the 88 existing regional networks on an endangered species list, a preoccupation with survival is hardly surprising.

But even as the networks scramble to position themselves for the onslaught of merger and acquisition activity that experts say is sure to come, it is still not clear what the networks of the future will be like.

"The two main survival techniques are going to be geographic expansion and product diversification, but at this point it's hard for anyone to be any more specific than that about strategy," said Stephen Cole, president of Chicago's Cash Station, one of the nation's top 10 regional networks.

Many in the industry are watching Electronic Payment Services Inc. - the new mega-network resulting from the merger of MAC and three other bank-owned regionals - for clues as to what businesses and strategies will prevail in the upcoming years.

Though no networks are yet ready to abandon their core business of switching automated teller machine transactions between financial institutions, most network executives recognize the need to expand beyond ATMS in the future.

Most networks view point-of-sale as their next-best bet for increasing network transaction volume, but there are other business possibilities as well.

A few years down the road, the processing of health care payments and managing the electronic distribution of government benefits are two areas that could prove lucrative to financial institutions.

Since both of these businesses are still in the formative stages, the networks can help their own cause by laying the groundwork for implementation procedures and pricing structures.

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