unknowing, banks had to explain that they were offering an alternative way to do what previously required a visit to a branch. Twenty years later, ATMs are so much a part of the daily routine that they are being used as the taking-off point for what comes next. What comes next, potentially a revolution that makes the advent of ATMs pale in comparison, might, for simplicity's sake, be called "the ATM in the home." That will be the point where smart cards, intelligent telephones, and personal computers bring electronic cash and electronic commerce to wherever consumers want access to it. The technology already exists to make so-called E-money possible. Mondex, the smart card system developed by National Westminster Bank, London, is proving that in a test in Swindon, England. The Mondex card can make a telephone at home or anywhere else act like an ATM - dispensing cash, transferring funds, providing account updates. If this idea spreads, ATMs and their cash could look as obsolete as Confederate money. "It wouldn't surprise me if 20 years from now the only place you found an ATM was in a museum," said Marian Salzman, corporate director and head of emerging media and consumer insights at the New York-based advertising agency TBWA/Chiat Day. What the home of the future will look like, and what kinds of appliances it will have for the delivery of financial services, is still open to question. Market researchers and technologists are working to get a grip on that, even as the first versions of E-money take trial runs on the Internet and similarly open computer networks. Trend watchers are anticipating upheavals in the way information is managed and delivered, and in the use of electronic payment methods. Smart cards, using the chip technology that enables individuals to "load value" and spend it like cash, are off and running. In the coming months, Americans will hear a lot more about smart cards thanks to high-profile initiatives such as a Visa-sponsored program at the 1996 Olympics in Atlanta. "The thing that gives smart cards an advantage is that they are mobile," said William Barr, executive director of information networking at Bellcore in Morristown, N.J., the research and development arm of the Baby Bell companies. "People aren't tied down to working off their PC," said Mr. Barr, who is vice chairman of the Smart Card Forum. "Consumers will be able to load their cards up at home through devices most likely attached to their computer or PC. Then they can get up and go places." Although interactive television will most likely play an important role in electronic commerce, it doesn't seem likely to dominate financial services. "When it comes to TV, things like Nintendo have demonstrated that it is possible to change people's behavior," said Mr. Barr. "I can see people shopping at home, where they stick a card into a box on the TV and have the payment take place automatically, but when it comes to banking and entering alphanumeric information into a system, hooking a keyboard into a TV isn't intuitively obvious. Phones and computers have an advantage here." Smart cards can hold enough data to replace consumers' traditional paper checkbooks. The chip card would contain all the relevant transaction information plus the cryptographic capabilities to sign a check digitally. "This way an individual could insert his or her smart card into a device at home or into a merchant's point of sale device, punch in the payee's number and amount, digitally sign it, and send it off," Mr. Barr said. The way people interact with their banks and the Internet is also showing signs of dramatic change. In October, Mark Twain Bank in St. Louis became the first to go live with E-cash, the digital money technology developed for the Internet by Digicash Inc. of Amsterdam. It works relatively simply. Mark Twain Bank, which issues deposits in many currencies around the world, offers its customers access to E-cash. The customers can contact the bank to have their money moved into what is called "the mint." Once there, the cash can be transferred onto PC hard drives. A window on the monitor shows how much is left in either area. The electronic money thus becomes available for shopping on the Internet and purchasing items from companies and individuals willing to accept E- cash. Transactions take just a few seconds. More than 100 customers signed up through Mark Twain within a week of the launch, said Frank Trotter 3d, vice president in the bank's capital markets group. Thousands of others curious about E-cash visited the bank's site on the Internet's World Wide Web. "The benefits are twofold," said Mr. Trotter. "First, E-cash enables users to make small payments on the Internet. There is no transaction charge to anyone. Once they have the money, it's theirs to route as they see fit. "Second, the payments are anonymous and privacy concerns are addressed." The system also enables users to attach E-cash to E-mail. In the future, people will be able to use electronic mail to load money onto a smart card, route it to a bank, send it to a friend, or shop on-line. The Internet possibilities are just beginning to be explored. Systems like Yahoo, a popular "scouting" method that can do keyword searches across the Web, will eventually evolve into "intelligent agents" acting on behalf of computer owners. "The agents will sort of 'live' out there on the net and do things on the consumer's behalf," said Mr. Barr of Bellcore. "The information intensity of transactions will be much greater than what we've seen in a paper-based economy." An agent could, for example, search for and analyze auto loan prices and find the terms best suited for the prospective borrower. "It's going to have a huge impact on the concept of relationship banking," Mr. Barr said. Bellcore is exploring many different kinds of agent technology. Latent Semantic Indexing, one of its patents, establishes a user's profile based on E-mail and other accumulated information. It uses this profile in searching the net and ranks what is important to the user. Bellcore has also developed Billkeeper, which monitors an individual's financial transactions. "Let's say you've bought three items this past month that are alike, and there happens to be a special where you can get the fourth at half price," said Dennis Egan, executive director of computer science research at Bellcore. "Billkeeper monitors your personal activities and alerts you to opportunities." Mr. Egan said Billkeeper is akin to program trading. "On a personal level, it could monitor various information sources and data bases and report back to you when a stock is in a desirable range," he said. Mr. Barr predicted that agent technology and other developments will give rise to a new appliance, a terminal for the home, office, airport, or anywhere for that matter. This dumb terminal would be activated by a smart card to perform tasks on the Internet. "This new appliance is the wild card in all these discussions," he said. "One of the interesting and attractive things about this kind of device is that you need a storage mechanism and you need computing capabilities for encryption. That could be the smart card. You stick your card in the appliance and it personalizes itself to you, and the card is encrypted so you can conduct commerce activities." According to Ms. Salzman of TBWA/Chiat Day, banks may be in a strong position for this exciting, if uncertain, future. "There are no bona fide brands in cyberspace," she said. "We hear about mutual fund companies on-line, and names like Digicash and, of course, Microsoft. "But people may think that Microsoft is just too much. They are your brother, your sister, your lifeline." Ms. Salzman said a bank "that can get out there and capture the consumer's attention is going to do well. The bank that is awash in strategic meetings making plans and not taking action will have a lot of explaining to do to its shareholders."
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