will be the first to enable U.S. consumers to make secure Internet purchases using a digital certificate stored in a microprocessor chip.

The Blue card, which American Express is promoting as having a "lifestyle and technology" edge, has both a magnetic stripe for conventional transactions and a smart card chip for on-line security features that will kick in in coming months.

American Express announced the product with tremendous fanfare at a news conference six days ahead of a big-name rock concert it is hosting in New York's Central Park, which is to be simultaneously televised, aired on radio, and broadcast on the Internet for a national audience. Concerts in other cities will follow, along with advertisements for the card to be shown everywhere from network television and highway billboards to popcorn bags in movie theaters and display screens on exercise bicycles at gyms.

The Blue card is a "key building block in our Internet strategy," said Alfred F. Kelly Jr., president of the consumer card services group at American Express Travel Related Services. It is "designed to extend the company's brand to a different audience, and attract new customers."

Until Jan. 31, American Express is giving away free smart card readers to Blue customers. They will cost $25 thereafter. The readers, which attach to a port in the back of a personal computer, let consumers use the optional digital certificate function to unlock an electronic wallet, which American Express will introduce in November.

Customers of any Amex card will be able to download the American Express Online Wallet from the company's Web site, and use it to store credit card numbers and passwords for on-line shopping.

Dan A. Cunningham, former director of the Smart Card Industry Association, called the product introduction "a very significant announcement" and a "good sign for the (smart card) industry."

"For some time now, a lot of people have said that electronic commerce could be the killer application in the United States for smart cards," said Mr. Cunningham, president and chief executive officer of Potomac Systems and Technologies, a Potomac, Md.-based consulting form. "Now we've got an excellent opportunity to test that claim."

Jerome Svigals, president of a smart card consulting firm in Redwood City, Calif., that bears his name, said the Blue card "sounds like it is the first broad scale usage" of a chip card for security in the United States. But to spread the use of digital certificates for on-line shopping, merchants will have to be geared up to communicate encrypted data, he said.

With its see-through border and a blue square in the middle, the Blue card does not look like a standard American Express card. The design is meant to be "both distinctive and cool," said Mr. Kelly.

Customers may be attracted by the card's favorable lending terms: no annual fee, 0% interest for the first six months, and an ongoing fixed interest rate "as low as 9.99%," the company said.

Gary Gordon, an analyst at PaineWebber Inc., was skeptical. Consumer demand for credit cards "has slowed dramatically," and American Express is spending a lot of money to cover the teaser rate, free card readers, and double-barrel publicity campaign.

Moshe A. Orenbuch, an analyst at Donaldson, Lufkin & Jenrette, said the added security of the chip is a "small convenience factor," and when it comes to smart cards, "merchants haven't embraced them because consumers feel they don't need them."

He said American Express' long-term goal may be to use the chip as a device for stored-value and debit functions. American Express has recently opened an on-line bank called Membership Banking, and Mr. Orenbuch said that investing in automated teller machines and equipping consumers with smart cards may be part of a broader banking strategy.

But he said Blue might encounter some problems. "A teaser rate is a good reason to take the card, but it's not a good reason to keep the card," Mr. Orenbuch said. "The idea that you can create this wallet isn't enough to generate usage."

Amex is a licensee of the Multos operating system owned by Mondex and MasterCard International, and of the Proton operating system, which it co-owns with Visa International and others.

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