Interesting fact: U.S. merchants are being told that by 2003, most if not all U.S. credit cards will have microprocessor chips on them (as well as magnetic stripes), and that retailers who install more secure point of sale terminals — meaning ones that can take smart cards — will get breaks on interchange.

Moreover, Visa and MasterCard continue to work closely with the major computer manufacturers, and are coaxing more promises that all new keyboards will come with smart card slots.

The funny thing is that as smart card technology inches toward ubiquity, most U.S. consumers are blissfully unaware of it. Even people with smart cards in their wallets usually have no idea that those cards are any different from standard credit cards. They got the smart cards for a favorable rate, an appealing look, or some other reason, but not for the chip, which so far can do precious little.

The card industry’s growing success in pushing smart cards into the market may have little to do with the technology and much to do with the marketing campaigns and introductory strategies that have made these cards fashionable and desirable.

Now that a critical mass of cards is out there (neither the card-issuing companies nor the associations will estimate the number of people who carry them), the industry has the clout to demand compliance from computer makers and merchants.

For long-suffering smart card believers, there is a certain poetic justice to these developments.

In the mid-1990s, payment card executives thought smart cards would catch on in the United States because consumers would want them. The pilots that banks set up were supposed to be fun for consumers: Spectators at the 1996 Atlanta Olympics could buy chicken sandwiches with stored value cards featuring pretty pictures of athletes; residents of Manhattan’s Upper West Side got sleek smart cards with LCD screens and readers to use at local merchants.

But those payment tools proved unfamiliar and cumbersome. The pilots were abandoned, and a lot of people assumed that that was it for smart cards in the United States.

It was — for a while. In a remarkable full circle, the day has finally come when consumers do clamor for smart cards — mostly for American Express Co.’s Blue, which is eye-catching and has good rates and no annual fee. Although they may not like to admit it, bank card executives have Amex and its clever marketing to thank for the smart card sea change.

Diana Knox, the Visa U.S.A. senior vice president who has spent five years evangelizing for smart cards, does not mind giving credit where it is due. “We have been able to take some of the learnings out of the Amex Blue experience and apply them to the Smart Visa launch,” she said. “To the credit of the banks, they really have worked hard at making the cardholders aware of the reader technology, and making the readers available.”

The Smart Visa program, introduced last year, has piqued interest among PC manufacturers, boosted activity among terminal-makers, and “decoupled the chicken-and-egg situation, by starting to get cards into consumers hands,” Ms. Knox said.

Hypercom Corp., the Phoenix-based terminal manufacturer, introduced a line of terminals in 1999 called ICE, which were certified in 1999 and 2000 as compliant with EMV, the Europay/MasterCard/Visa smart card standard.

Eric Dumois, director of global smart card technology at Hypercom, said that 80% of terminals it sells in the United States have smart card readers; among terminals sold abroad, “the number is about 100%.”

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