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Smart Credit Cards Make Shopping Safer

Electronic wallets and digital IDs facilitate browsing and buying on the Internet, but they aren't the last word in security. Already big in Europe and Japan, smart cards--led by the American Express Blue and Visa's Visa Cash--are finally reaching U.S. consumers. Chips inside these cards don't just store your information: They also log you on to a computer or Web site, complete online purchases, conduct online banking transactions, and more. You must insert the card into a reader (like the one shown in the photograph to the left of the ActivCard smart card) and then enter a PIN number to run any of its applications. This arrangement is more secure than relying on a unique number or password that hackers might crack.

Blue Notes

Blue combines a conventional credit card with an embedded chip. Cardholders can sign up for the Blue digital wallet, which currently is accepted at about 100 shopping sites. To charge a purchase at one of these sites, you insert the card into a card reader and type in your PIN number.

Visa Cash, which lets you make payments with virtual cash stored on its chip, is used in the Atlanta area and is in trials elsewhere. Major financial institutions such as Citibank are expected to roll out smart cards by the end of the year. These cards may soon be standard plastic among home users--and eventually could become a must-have for online shopping and surfing. --Yardena Arar