The plan quickly spread to other cities. There are currently about 50,000 daily MyBi transactions, and each day the joint venture issues 5,000 new cards. Asian governments love programs like MyBi because they provide a window on taxable business income. Whereas cash transactions can be slipped into the private till, electronic transactions leave a trace.

Are Asia's successes with the smart card exportable? There are unique factors fueling the smart-card boom in Asia. These range from teenagers who view technology as a fashion statement to Asia's relatively high dependence on public transportation. Asians are also used to a high degree of government intrusion into their lives — most carry ID cards as a matter of routine. Another card in their wallet is no big deal. Privacy-conscious Europeans and Americans, however, may be less eager to put themselves into yet another computer database. "Malaysian consumers are likely to see the government's new combination ID and e-card as a convenience," says Foo Suan Pin, a Unisys systems integrator who helped design the new Malaysian smart card. —T.L.

Smart-Card Glossary

Cardholder verification. Smart cards have one clear advantage over notes and coins: They can be made harder to steal. Can be, because nobody has yet produced high-security smart cards for commercial use. There are cards protected by a PIN, but researchers are more interested in biometrics; when you make a smart-card payment in the future, the card reader might check your fingerprints or your retina. (Watch Charlie's Angels, the movie, to learn how to crack the system.)

Contact or contactless. There are two kinds of interfaces between a smart card and its card reader. Contact cards transfer data via electrical contact points that physically connect to the corresponding points in the card reader. Contactless cards transfer data using radio waves over a maximum range of 10 centimeters between card and reader. Contactless-card users are easy to spot: They do the strangest things to avoid taking the card out of their bags or wallets.

Smart credit cards. The world's largest debit-card and credit-card issuers — Visa, MasterCard, Europay, and Amex — have issued credit cards with microprocessor-enhanced features to compete with cards issued by non-mainstream financial institutions. Smart credit cards have yet to become a hit in Asia, but they are bound to replace the magnetic variety soon. Each contains the functions of a regular credit card, an electronic wallet, and details of the loyalty programs that you belong to. Will the next fad in body piercing be subdermal chip implantation?

Mobile smart cards. In Europe and Japan, mobile-phone users commonly made purchases with electronic cash after it became possible to store bank details on SIM cards. The 3G SIM will do a lot more. NTT DoCoMo, for example, will introduce phones with an internal smart credit card and card reader, allowing users to conduct more-complex transactions over the mobile network. They can also download all sorts of applications and discount coupons from vendors. This type of smart card will be contactless, so it can also be used for offline, physical payments. —Enid Tsui

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