Banks can use smart cards to turn the potentially volatile personal privacy issue to their advantage, according to several legal and marketing experts.

Speaking to an international card technology symposium this week, these experts suggested that financial institutions could both reassure consumers about the safety of their personal data and reward them for the privilege of using the data.

"The smart card ... can restore to the individual a control over information that conforms to every definition of privacy that we can think of," said Alan F. Westin, a Columbia University law professor and influential consultant on business privacy practices.

He predicted the protection of personal data would be governed by "a market in privacy. Competition among privacy-bearing systems will be part of the free market competitive system."

Mr. Westin was one of several speakers at the annual Cardtech/Securtech conference to suggest business opportunities may exist in privacy safeguards. These were encouraging words to an audience that has been struggling to bring to market a higher technology payment device, based on a computer chip rather than the encoding of a magnetic stripe.

Jeffrey Ritter, an expert in electronic commerce law who is based at the Ohio Supercomputer Center in Columbus, said the notions of "data as property" or "a market in privacy" could ultimately determine not only the responses of corporations and consumers but also how electronic money evolves.

Watts Wacker, a scenario-planning specialist at SRI International, said privacy concerns rank alongside fear of crime and several other issues as key factors in consumer behavior trends.

"The attitude will be: 'I would like more privacy, but I realize I'm not going to get it, so at least pay me for it,'" Mr. Wacker said.

While consumers may react negatively to any electronic innovation that seems to threaten privacy, they might on further examination conclude they can "benefit a great deal from this," Mr. Wacker said.

Consumers may consent to a company's collection of transaction data if they feel they get something in return.

Or as John Lopez, counsel to the House Banking Committee's monetary policy subcommittee, put it: "How many of us wouldn't give up a little privacy for a few frequent-flier miles?"

Mr. Lopez joined with Mr. Wacker and others in a daylong symposium titled "the changing face of money." Privacy and data protection were common threads for the speakers. But Mr. Westin, the Columbia law professor, because of his 40 years of experience with privacy issues and his current role as editor of the newsletter Privacy and American Business, struck the deepest chord.

He suggested that consumers could decide whether to allow personal data to be disseminated, and on what terms, by relying on the chip in a smart card.

In a luncheon address Monday to 1,500 people at the international card technology conference, Mr. Westin said a cash-substitute chip card that does not leave an audit trail can satisfy consumers who want to preserve anonymity.

But a privacy policy should spell out the times when banks will appropriately share personal information, as in credit evaluations.

This puts the card technology industry, including financial institutions concerned with preserving their customers' security and loyalty, in a position to "define utopia," he said.

But as he has done often in his writings, Mr. Westin criticized the vast majority of card-issuing banks for not adopting written privacy policies, though MasterCard, Visa, American Express, and several of the largest banks have models to emulate.

"There will be people who assert their concerns about privacy," Mr. Westin said, and they tend to be desirable customers. "Respond to their concerns, and they will be as active as consumers in the card area as they are everywhere else."

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