The idea sounds like something out of a sci-fi movie: a line of clothing and accessories embedded with tiny computers that can store the wearer's credit card account numbers and other information, zap payments wirelessly to toll booths and point of sale terminals, and connect to personal computers to send and receive data.
A company called WearLogic Inc. is working to make this futuristic idea come true. Its first product to market -- being peddled exclusively to banks and so not directly available to the public -- is a fashion-forward leather wallet that not only holds cash, plastic cards, and other common wallet items but also has a small computer screen on one inside flap and a keypad on the other.
The screen and keypad -- which the company says are flexible and crushable and will not break if you sit on the wallet or drop it -- include a smart card slot and a connection for plugging the wallet into a computer.
So far, the wallet does only a few of the many things that WearLogic has in mind: It can read smart cards, store information about its owner, and make Internet payments when it is connected to a computer. But eventually WearLogic hopes to add all sorts of wireless applications so that people will be able to wave the wallet in front of a payment terminal instead of digging out a card.
The company plans that the wallet will be a center for doing online banking and that banks will be able to deliver advertisements or messages to customers every time they turn on the wallet or make a transaction. The wallet would track loyalty and rewards points, too.
Also in the works: belts, shoes, hats, jewelry, and other items of clothing with those capabilities.
"We are helping to digitally skinny-down the wallet," said Robert J. Wesley, chief operating officer of WearLogic in Wakefield, Mass. The company, which says it makes "wearable information systems," has trademarked the name SmartWear for its product line.
Though WearLogic will not say what banks have expressed interest in the wallet, the company said a bank will be offering it commercially to customers next month. A primary financial backer is BankBoston Ventures, the venture capital arm of FleetBoston Financial Corp. FleetBoston is a major credit card issuer and offers a smart card product.
WearLogic's other major backer is Cambridge/Samsung Partners, a joint venture of the Korean consumer electronics giant.
WearLogic says it is particularly targeting card-issuing banks and promoting the wallet as a good way to acquire cardholders and get those it already has to spend more. WearLogic, which was founded in 1998 with the idea of creating an "intelligent" wallet that would interact with smart cards, says smart cards are the centerpiece of its product and, once more U.S. consumers have smart cards, demand for its wallet will come into its own.
The company envisions that smart card issuers will issue their cards together with a SmartWear wallet and that once the card is inserted in the wallet it will be immediately recognized. The wallet's screen is to give prompts so that its owner can connect it to a PC and download financial account information.
WearLogic's bank customers "will be able to reposition their smart cards as a key or pointer to other banking services," Mr. Wesley said. "We have an opportunity to bring to life a lot of the smart cards that have been issued."
People will open their SmartWear wallets three times a day, just as they do with their low-tech wallets, he said.
The leather wallet was created 300 years ago in Europe and has changed very little, according to WearLogic, except for the addition of slits to accommodate plastic cards. People carry quite a bit of information in wallets, from receipts to phone numbers to photos of family members, not to mention cash, and they will still be able to do so with the SmartWear wallet.
The difference, of course, is the injection of pliant mini-computers. WearLogic says it has a proprietary technology called Flextek that enables the display and other electronics in the wallet to fold, twist, crush, and adapt to any desired form.
This, according to the company, means that SmartWear can easily be incorporated into a wallet of any design. Though some companies are promoting wireless telephones as the devices that will be able to do all that the SmartWear wallet can, WearLogic argues that cell phones are bulky, rigid, and awkward to carry. Moreover, people will one day be able to plug a SmartWear wallet into an Internet-connected cell phone and do transactions that way.
Avivah Litan, vice president and research director of payment services at GartnerGroup Inc. in Stamford, Conn., said the wallet "sounds like a really futuristic device and very innovative." She added, "It may be the best design because it gets close to the physical world."
"The only skepticism is, it's an unknown company that other mobile device manufacturers will have to interact and compete with," Ms. Litan said. Even if WearLogic's technology is top-rate, she said, it will need powerful partners and marketing, and she suggested it forge ties with such companies as Palm Inc. and Nokia.
Theodore Iacobuzio, a senior analyst at TowerGroup in Needham, Mass., called the wallet "a neat idea," adding that personal digital assistants "as actual payment devices where plastic cards do not exist are a niche product."
Mr. Wesley said the SmartWear wallet will help people realize the full advantages of smart cards and will make the new technology a part of everyday life. He said the wallet will cost $300 to $400, depending on its functions, and that his company's product is safer than a cell phone or PC because the technology in the smart card acts as a firewall.
"We're not attempting to make credit cards obsolete -- we're enhancing credit cards," he said. "But it will become less convenient to use traditional credit cards versus the smart card over the course of time."
WearLogic says its research indicates that the product's gadgetry will appeal to men and its chic appearance will appeal to women. Plans call for several styles, including a clutch wallet, a European billfold, and an American billfold.
Mr. Wesley said people who would buy the wallet would probably be upwardly mobile 30- to 55-year-olds who like technology and lead busy lives.
Mitch Scott, vice president of business development at ACI Worldwide in Omaha, said, "We see the physical wallet as a mechanism that takes dynamic information and moves it into a static environment so customers can view it in an offline mode." His company, an e-payments software vendor, has been hired by WearLogic to install two of its products: its personal online data e-wallet application and its Monad multiple application smart card software.
WearLogic and Proton World International, a European smart card company known for its electronic purse application, recently demonstrated the SmartWear wallet at the Cartes 2000 conference in Paris.
The wallet, which is compatible with Proton's smart card technology, can read transactions made on smart cards, download money on to the card remotely from a computer, and make payments over the Internet. People at the Cartes conference could buy the wallets for pilot tests and direct sales scheduled for this year. WearLogic said tests of the wallet will be done in three countries.
At first, the product to be unveiled in the United States next month will have only a few uses. People will be able to make Internet purchases with regular credit cards and to use a smart card and a personal identification number to protect the information in the wallet. Mr. Wesley said these features will be followed soon by a loyalty function.
WearLogic has a partnership with Welcome Real-Time, a smart card loyalty program system vendor based in Aix-en-Provence, France. Welcome Real-Time is developing an application for the SmartWear wallet that would let people view e-coupons on the wallet's screen and store them on smart cards. The card would be able to collect coupons and promotions every time it was used to make purchases at merchant sites.
The first wallets on the market will also be able to display bar codes that can be scanned at the point of sale to replace the paper coupons and frequent-shopper cards people carry in their regular wallets.
By yearend WearLogic hopes to become one of the first companies to use Bluetooth wireless technology, which would let the wallets communicate with PCs, point of sale terminals, and cell phones without the use of cables or connectors. Smart cards will become a permanent part of the wallet, and eventually customers will no longer need to remove them from the wallet, Mr. Wesley said.