Citibank and Verifone Inc. said Wednesday they have agreed to distribute Verifone's Personal ATM in the New York City smart card trial later this year.

Personal ATM, a hand-size, smart-card-reading terminal that can be plugged into any telephone line, will be offered to a portion of the 25,000 Citibank customers slated to participate in the pilot on Manhattan's Upper West Side.

Henry Lichstein, vice president responsible for the Citicorp unit's smart card development, said preparations remain on schedule for a fourth- quarter launch. Chase Manhattan Bank plans to have another 25,000 cardholders in the test, in which MasterCard and Visa will also be participating to prove interoperability across banks, terminals and networks, and card brands.

Citibank's announcement-the first by a bank-is a shot in the arm for Personal ATM and the underlying system architecture, Verismart. Verifone unveiled the products last fall amid visions of rapid, mass deployment of smart cards and related services.

C. Lloyd Mahaffey, senior vice president of marketing and software systems at the Redwood City, Calif., transaction automation vendor, said, "The big question has been, when will U.S. banks make the move" to smart cards? "Now we see it coming."

He said Citibank is one of several companies worldwide that will be going public with Personal ATM plans this year.

Mr. Lichstein equated Personal ATM to Citibank's "revolutionizing" of retail banking in the 1970s with blanket installations of automated teller machines throughout its branch network. He said customers can use Personal ATM "in conjunction with a smart card in the comfort of their home or office or virtually anywhere else. If they can get to a phone line, they can get cash" by loading it onto a smart card's chip.

Mr. Lichstein called Personal ATM "one element in the arsenal of tools we will use" to enhance remote banking services.

Personal ATM, "as a stand-alone terminal talking directly to a server, is unusual," Mr. Lichstein said.

"It can be connected anywhere there is a telephone," Mr. Lichstein said. "This is the only thing of its kind we know about."

He said he was excited about Personal ATM and Verismart from the first time he heard of them because of the simple and economical cash-downloading potential. In keeping with its open-system and interoperability preferences, Citibank has concurrently lent its prestige to the Java Card standards effort led by the smart card manufacturers Gemplus and Schlumberger.

Mr. Lichstein called cash access the "icing on the cake" of on-line banking.

"Citi called its service Direct Access, but until you can get cash in the home, it's not full access," said Dan Cunningham of Phoenix Planning and Evaluation Ltd., a Maryland-based consulting firm. "Now it sounds like they have it."

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