‘Smart Card’ Adds Brains to Credit Card : Technology: An embedded computer chip can store information on purchases, pay tolls and provide identification. But there are privacy concerns.

It looks and acts like your average bank card, but it knows a lot more about you than you may think.

The “smart card,” a piece of plastic with a computer chip on its face, is slipping into the United States with uses from defense and health care to retailing and transportation.

The cards have replaced food stamps for some Ohio shoppers and meal tickets for students in college. Marines and peanut farmers are whipping them out for boot polish and crop reports.

Someday they may also pay highway tolls, or unscramble satellite TV signals, as they’re used in Europe today. Sorry--no card in the cable box, no Evander Holyfield fight on the tube.

But even though the number of smart cards has more than doubled since 1988, this country still isn’t wise to the cards. Only about 1 million are in use here compared to 114 million in Europe.

“The average American who has a dozen pieces of plastic in his pocket probably doesn’t even know what a smart card is,” said Nicolas Samaras, a technology analyst at Dataquest Inc. in San Jose, Calif.

So first, an introduction to these data dynamos:

* Unlike today’s financial cards, the smart card doesn’t need a magnetic stripe on the back. Instead, it’s equipped with a silicon chip, often displayed at left center but sometimes hidden in the plastic. (Smart cards may also have embossed account numbers, holograms, graphics and photos on the front or back.)

* Like a bank card, the smart card is slipped into a computer. Then the owner enters a four- or five-digit ID number and uses the card to make purchases, convey information or both.

* The card can hold three pages worth of typewritten data, compared to one line of type for a magnetic-stripe card. That means several accounts could be loaded onto one smart card, said Diane R. Wetherington, president of smart card systems at American Telephone & Telegraph Co.

For example, the same card that checks out library books and buys clothes on credit could give an emergency room clerk a patient’s blood type, insurance data and doctor’s name. Each account would have a separate ID number, so the librarian couldn’t see your blood type.

For businesses, the card is a shortcut to valuable market research. With your card in its computer, a company could learn your ZIP code, shoe size or the date of your sporty sedan’s last oil change, and respond accordingly.

Already, the Vision marketing system for supermarkets is tailoring coupons to U.S. shoppers who use smart cards. Customers insert their Vision cards into computers at the checkout line. Then the card tracks purchases and supplies the customer with product coupons, allowing the store to collect marketing data and pitch its products more effectively.

About 30 supermarkets nationwide are testing Vision, and 200 stores in the Minneapolis-based Super Valu Stores Inc. chain will begin using the system next year, said Vision’s creator, Advanced Promotion Technologies of Deerfield Beach, Fla.

Smart cards are replacing food stamps for 12,000 households in Dayton, Ohio, said R. John Bianco, vice president of National Processing Co. The Louisville, Ky., company runs the experimental PayEase program for the Ohio government.

Ohio Gov. George Voinovich said PayEase, which began Feb. 25, could be expanded throughout the state if successful, especially in reducing fraud. Welfare advocates also like the cards because they reduce the stigma of pulling out food stamps at the checkout counter.

In Parris Island, S.C., Marine Corps recruits use smart cards instead of paychecks to obtain supplies. And an engineering division at Wright-Patterson Air Force Base in Dayton reduced paper work by giving members smart cards instead of paper orders for personnel moves.

The cards recorded soldiers’ personnel relocations, from recall to the base to deployment overseas. Seven other units at the base will get the system this year or next, said the contractor, Applied Systems Institute of Washington.

The Army had considered using smart cards as dog tags, but found the metal tags now in use would hold up better under fire for identifying remains.

In the office, smart cards can be keys to computers. Personal Computer Card Corp. (PC3) of Lakeland, Fla., attaches security systems to computers, requiring a smart card for access and limiting which programs an employee can run.

PC3 President John S. Cain said the cards keep out taboo software, such as games, which consume computer time and could be bugged with viruses.

“It’s also an excellent tool for letting you know which departments are actually using their machines,” said Kippert R. Wheeler, PC3’s technology vice president.

Samaras, the Dataquest analyst, said the smart card application with the most potential may be one that verifies signatures on checks or credit slips--a way to reduce millions of dollars in fraud and forgery. Information such as signing speed or unusual letters could be loaded onto a smart card for comparison at the point of sale.

Yet for all their uses, smart cards are still relatively uncommon here. They’re largely limited to experiments in contained environments, such as campuses or hospitals. And sales have been disappointing, Samaras said.

To increase use, card makers are forming alliances with companies that are closer to consumers. Micro Card Technologies supplies cards to Copicard, which recently worked with the University of Calgary to convert student and staff IDs to smart cards. The company is negotiating to do the same at several U.S. colleges.

Micro Card Vice President John Taskett said a few U.S. airlines briefly tested--but didn’t commit to--smart cards for frequent flyers. He wouldn’t identify the carriers.

Meanwhile, AT&T; and Lockheed Corp. will jointly seek contracts for public highways where drivers would pay tolls with dashboard-mounted smart cards. A transmitter at the tollbooth would read the card as the car goes by.

One concern about the smart card is privacy. Even though manufacturers are confident that accounts on the same card would remain separate, some are still unsettled that so much personal information could be stored on one little computer chip. What if the librarian could look up someone’s doctor bills?

Or, could using smart cards as national IDs give the government more control over citizens at employment agencies or highway checkpoints, asked Richard Civilles, program director at Computer Professionals for Social Responsibility. What if the government denied a job or benefits to someone based on personal tidbits gleaned from the card?

But manufacturers are optimistic that consumers will warm up to smart cards as they become more prevalent, said Amy Wight Eckel, product manager for AT&T; smart cards.

“It looks and feels like a credit card,” she said. “People already know how to use it.”

Smart Cards 1992 sales of smart cards in Europe will reach about 114 million cards. There are abouit 1 million in the U.S. Some smart cards display photo of cardholder Unlike bank cards, which have magnetic stripes on back, most smart cards display a silicon chip. Sales in Europe (in millions of cards) ‘88: 36 ‘89: 45 ‘90: 50.5 ‘91: 76 ’92 (est.): 114 ’93 (est.): 155 ’94 (est.): 198 ’95 (est.): 235 Source: Dataquest Inc.