"I don't hear anything about smart cards," said Rob Givens of the Mazuma Credit Union at the Ingram's Industry Outlook Forum, "Europe is way out there with smart cards."

To discover how "way out" Europe really is and to discern whether the Europeans have a better handle on credit card technology than they do, say, on military defense strategy, we thought an inquiry into "smart cards" in order.

For the record, smart cards are credit card-sized plastic cards that contain information in an imbedded microchip. Unlike magnetic stripe cards, a smart card can store much greater information and can be reprogrammed to add, delete or rearrange data.

Currently, there are two basic types of smart card. The first is more of a "memory" card as it can only store information. The second type, a true "smart" card, has a microprocessor embedded in the card along with memory and is not dependent on the unit it is plugged into to make the application work.

There are two basic types of smart card. The first is more of a "memory" card: it can only store information. The second type, a true "smart" card, has a microprocessor embedded in it along with memory and is not dependent on the unit it is plugged into to make the application work.

To give the French credit where due, they first patented the smart card in 1974, and the first cards were used in France as well. Europeans took to the cards because the high cost of telecommunications made on-line verification of transactions expensive. The smart card moved that verification off line. This cut the cost without sacrificing security. As telecommunication costs have been relatively restrained in the United States, the urgency to adopt the smart card has been restrained as well.

Today, in most of America, smart card use is typically restricted to a single application. The Los Angeles County Metropolitan Transit Authority, for instance, will soon move to a smart card for all forms of transit. Radio frequencies will communicate between the card and fare reading equipment in such a way that passengers will not need to remove a card from a purse or pocket to pay a fare. This will speed up the boarding and greatly simplify collections as people will likely have to pay in advance and have their fare automatically deducted.

In another, entirely different type of application, The U.S. Department of Defense is distributing 4.3 million Java-based "Common Access Cards" to all military and civilian employees and contractors. These cards will provide security at a given facility with the ability to control physical access and will also allow Department of Defense employees to digitally sign and encrypt electronic transactions, such as e-mails and deployment orders, thereby "authenticating" themselves to intranet databases and applications. The Pentagon argues that the technology will serve to make The Defense Department computer networks more secure.

Smart cards, however, will revolutionize the way we live and work only if and when the nation agrees on a multi-application card and a uniform process for reading it. The same card, for instance, could potentially not only get the user on the bus, on to the base and into his employer's computer, but it could also serve as credit card, driver's license, security badge, health insurance card and even passport. To create the infrastructure for this will be no less daunting than it was to create a standardized infrastructure for America's railroads.

To be sure, given the entirely healthy and distinctly American penchant for individual privacy rights, the smart card faces a number of security challenges before full implementation. In the meantime, it seems most of the United States will watch to see how smart cards roll out in France.

There are two basic types of smart card. The first is more of a "memory" card: it can only store information. The second type, a true "smart" card, has a microprocessor embedded in it along with memory and is not dependent on the unit it is plugged into to make the application work.