Europay International raised the smart card ante last week, in more ways than one.

In addition to announcing an ambitious electronic purse program called Clip, which attracted formal commitments from banks in at least three countries, the European association upped its estimate of the savings available from converting to chip technology and presented evidence that both consumers and retail merchants are receptive to it.

The "business case," said Europay director of commercial affairs Francis van den Bosch, is now 2.4 billion European currency units over a seven-year conversion period. The estimate in 1994 that convinced Europay's board to endorse chip cards ahead of both MasterCard and Visa was 1.7 billion ECU.

In dollar terms, that's an improvement of about $900 million, to $2.9 billion, the savings coming from enhanced security, and efficiency, and lower communications cost. Revenues from new or value-added card services would be gravy.

Europe's erratic phone quality, relatively high communications costs - and hence high on-line card authorization costs - have long made the chip proposition more attractive than in a sophisticated telecommunications environment like the United States. But Mr. van den Bosch said much of the increased cost-reduction opportunity is in fraud reduction, particularly at automated teller machines.

Mr. van den Bosch said ATM fraud is a growing but underpublicized concern. Europay will be offering financial incentives to make ATMs chip- compatible, so that cards and networks will be harder for criminals to compromise. ATMs and well-placed point-of-sale terminals, such as at gas stations, are seen as the key to a "critical mass" of smart card usage.

For its marketing case, Europay spotlighted consumer research by Payment Systems Inc., showing high levels of interest in some of the more advanced capabilities of smart cards.

"Consumers want smart cards and they understand the concepts of pay before, pay now, pay later," said Mark Sievewright, the Tampa research firm's managing director in London. He also said that the emphasis by Europay on transaction speed and reliability - which can be aided by use of smart cards without on-line authorizations - is "well-placed."

PSI consumer surveys across 11 European countries showed a growing preference for self-service banking. When it came to smart cards, four out of five viewed international acceptance as an important feature, and three out of four preferred that banks - rather than telecommunications companies or other nonbanks - issue the advanced cards.

In a rarity for a banking industry convention, Europay had several merchant representatives on its program, both in person and via video. People representing the travel and transportation business - from British Airways, Hilton International, and the Paris Metro - all expressed interest in smart cards for marketing and security reasons. There was some trading of barbs, demonstrating why such dialogue is rare - the two camps are traditional rivals for consumer credit and loyalty and commonly disagree on transaction pricing.

Kurt Richolt, Europay's chairman, said cooperation is more likely in Europe than in the United States, where banks have ceded most of the merchant processing business to third-party transaction companies.

"In Europe, issuing banks are also merchants' banks," he said. "All the components in the chain have more than one role. This can help us to build an infrastructure that includes the merchants and is in all of our interests."

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