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When exactly did “privacy” become Chicken Little's new mantra?

Forget about last month's Federal Trade Commission report saying the Internet is a privacy wasteland (for more on that, read Robert Gellman's On Privacy column, page 14). Let's talk about the latest thing that privacy KO'd: the smart card, which looks like a credit card but has a computer chip that gives it 80 times the memory capacity of cards with a magnetic strip.

New Jersey was going to turn its driver's licenses into smart cards next summer, thus giving them capacity for tons of information beyond the usual address, age, weight and eye color data. They could store your fishing or hunting license, unemployment benefits, welfare information — whatever consumers would see fit to include. The legislation was pulled, however, in part because consumers and privacy advocates said the cards threatened their privacy.

Go cry “The sky is falling” somewhere else. Under the proposed initiative, the cards would only contain information that consumers choose to put on them.

Smart cards are here already — though there were only 10.8 million of them last year, the number will explode to 280 million by the year 2000. Soon, they will take over our wallets, says contributing columnist Bruce McElhinney of Visa U.S.A. (see page 26). Marketers will love them because they'll be able to track purchases and customer preferences, as well as create loyalty programs.

Consumers will be able to add monetary value to reloadable smart cards or buy them in set values from banks or credit-card companies. In a few years, we'll use them for everything: to buy groceries, movie tickets or make Internet purchases. And they're safer than cash — to use them, you have to use a PIN (just like your ATM card), which makes them safe on the privacy front, too. “If procedures are followed, confidentiality and privacy issues are not issues anymore,” says Jonathan Baldwin of Dreifus Associates, a consulting company that analyzes emerging technologies.

Save the privacy argument for where it's needed.

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