It's in the cards, Microchip turns calling cards into 'electronic coin purses' >BY Sandra Guy, News Editor

Bell companies and other carriers have seen the future, and it is smart cards. U S West Communications and GTE are touting an agreement-the broadest initiative yet-to let their customers use smart cards to make calls at specially equipped pay phones.

Unlike prepaid calling cards with magnetic strips, these contain circuit chips that let them electronically deduct costs and show the remaining value on the phones' visual display. No access number or pin code is required. The value stays with the card rather than inside a database that must be accessed.

U S West customers can use their so-called Telecards at GTE pay phones, and GTE customers can use their Smart cards at U S West phones. GTE has installed 10,000 Northern Telecom phones primarily in California, Hawaii, Washington, Texas and Florida, while U S West has deployed 16,000 in Arizona, Colorado, Minnesota, Oregon and Washington.

The phones, trademarked Millennium, feature audible instructions in English and Spanish and card slots that accept the smart cards, as well as coins, credit cards and calling cards.

The smart cards are commonplace in Europe, and U.S. carriers believe their convenience will catch on here. "They call them electronic wallets. This is like an electronic coin purse," said Matt Scheuing, director of marketing and business development at U S West Communications, Seattle.

Other carriers are testing the cards, which one analyst believes offer a number of futuristic possibilities. People could use the cards to do bargain shopping, order TV programming from set-top boxes and even program home-security alarms, said William Keenan, president of the Convergence Group, Wilmington, Del. "The telecom industry is incredibly well-positioned for this," he said.