Inc., a new Internet portal, said it will give its customers free smart cards and readers to secure their activities on-line.

Netcity has ordered cards and readers from Litronic Inc. for its first 100,000 members and plans to have one million users by yearend.

The Aliso Viejo, Calif., start-up plans to offer its users access to on-line shopping, banking, credit cards, electronic mail, and news groups, among other services. The company, which was started in August, is to begin offering services including e-mail, member home pages, and a calendar application by mid-March. After that, Netcity said, it will set up links to on-line merchants and banks.

With the new chip infrastructure, Netcity said its members - which it calls Netcityzens - will be able to shop and bank in the "first personalized Internet and e-commerce environment secured by smart cards and public key infrastructure technology," or PKI, which electronically authenticates a user's signature.

" is breaking barriers for PKI and smart card technology in the business-to-consumer e-commerce market," said Bill Holmes, vice president of sales and marketing at Litronic, an Internet security provider in Irvine, Calif. "By giving away smart cards and readers, is making a major commitment to the consumer and accelerating the introduction of secure e-commerce, which will be demanded by every user on the Internet very soon."

Netcity chose Litronic to supply the smart card infrastructure for its site. It declined to discuss the terms of the agreement but said Litronic is providing consulting services as well.

"Litronic's infrastructure is significant to our anticipated membership growth," said Gary Brooks, founder of Netcity. "We looked at several security specialists in the industry and selected Litronic because they have the most advanced technology and proven expertise in delivering Internet security products."

Netcity has ordered Litronic's NetSignia 210 smart card readers and NetSign software, which enables Web browsers to use smart cards. It will also use ProFile Manager, Litronic's management tool for smart card and PKI technology deployment and Microsoft's Windows-powered smart cards.

The portal company is counting on the future mass acceptance of smart cards both on- and off-line. Members eventually will be able to use their Netcity smart cards at automated teller machine terminals, in stores, and with GSM cellular phones, the company said.

Netcity said it will generate revenue by introducing on-line shoppers with authenticated identities to merchants in its Internet community.

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