Verifone Inc. is claiming a breakthrough toward one of electronic banking's holy grails: an automated teller machine in the home - or, for that matter, in the pocket.

The Redwood City, Calif., company is introducing Personal ATM, a palm- size device with a smart card slot. Among other interactive capabilities, it allows value to be loaded onto the card via telephone.

Accompanying Personal ATM, to be unveiled today at the American Bankers Association's bank card conference in Orlando, is Verismart, a system Verifone says will make smart cards more appealing to the banking, retailing, telecommunications, transportation, and utility industries.

While Verifone is not the first to see the remote banking potential of plastic cards with built-in computer chips - for example, the Dutch company Philips makes screen telephones with smart card readers - Personal ATM may be more ready for the mass market.

As purely a card reader - lacking processing power, computer intelligence, or memory, but connectable through a phone jack - Personal ATM is so cheap that banks ought to consider almost giving it away, said C. Lloyd Mahaffey, Verifone's vice president of global marketing.

He would not discuss prices but said they are a stark contrast to the $100 or $200 that screen phone manufacturers are hoping will attract widespread acceptance, or the bare-bones $500 network computers that Oracle Corp. and others contend are the key to mainstream Internet use.

"The consumer might pay $2 or $3 a month, not the $90 or $100 it takes to buy some devices that we see at technology trade shows," Mr. Mahaffey said in an interview last week. He predicted "volume deployments" of Personal ATM by mid-1997.

He said the battery-powered device might be mailed out in a sturdy, compact box - under the brand name of a bank or other provider - along with two smart cards.

The economics are such that if a defective machine arrives, and the customer calls to complain, the service representative will say, "Throw it away. We'll send a new one," said Mr. Mahaffey, architect of the Verifone consumer strategy typified by Personal ATM.

In current parlance, Personal ATM is the ultimate "thin client." That means it is "intellectually challenged," Mr. Mahaffey said, relying on the smart card and on-line connections for what it needs to know.

But Mr. Mahaffey said that is the key to the cost advantage through which Verifone hopes to dominate consumer automation as much as it does the point of sale terminal market, where its share is near 70%.

The Verismart system is designed to embed the smart card capability in devices other than Personal ATM - computer keyboards, telephones, television set-top boxes. Verifone has already forged alliances with manufacturers in such fields, including Keytronic, GTE, and Scientific Atlanta, as well as Mondex International and smart card maker Gemplus.

At least 10 companies have signed to support Verismart, including American Express, MasterCard, Visa, and Wells Fargo Bank.

Verifone says it is addressing some bankers' reluctance to commit to Mondex, Visa Cash, or a competing scheme: Verismart is "device independent," meaning a bank is not forever locked in to any smart card decision.

The strategy also complements Verifone's Internet commerce line, including the vWallet announced in June.

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