Will the new generation of "smart" credit cards know a bit too much about your personal life?

Privacy is one of several issues that bankers and regulators are examining as a new breed of computer-chip-embedded payment cards come to the market.The new smart credit cards promise to offer consumers substantial flexibility because one clever piece of plastic can be used to withdraw cash from an ATM machine, pay for making copies in the library, cover a long-distance telephone call or pay a subway fare.

NationsBank, Wachovia Bank and First Union Corp. are unveiling the first generation of Visa-branded smart cards, also known as stored value cards, in Atlanta ahead of this summer's Olympics. Designers eventually plan to let consumers add value to their cards by plugging them into an ATM machine and transferring funds from their bank account or credit lines.

The cards also could carry an enormous amount of personal information.

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Jerome F. Page, who's developing smart cards for the New York Metropolitan Transportation Authority, told a House panel last week that the agency's new Me-tro-Card could be powerful enough to "enable us to track an individual customer's travel behavior" throughout New York's subway and bus systems.

While emphasizing that the MTA doesn't intend to do this, Page described how subway riders using MetroCards could be tracked under some circumstances because each card carries a unique serial number. The time and place of every entry through subway turnstiles or onto a bus is logged electronically against that serial number when a customer swipes the card through an electronic reader.

While people purchasing the cards with cash would remain anonymous, their identities could be discerned, in theory, if they "loaded" value onto the cards through their bank ATM or credit card accounts, said Page, general counsel of MTA Card Company, a transit authority subsidiary.

"The gravity of the privacy issue expands dramatically when the stored value card has multiple applications," Page said in prepared testimony to a House Banking subcommittee. He asked whether banks and others issuing smart cards will be able to "convince consumers that their privacy will be maintained even though there is a technological capability to tie electronic cash transactions to an individual."

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