Deep beneath the streets of Washington, D.C., in the barrel-vaulted subway stations of the nation's capital, tourists are witnessing a strange activity. Commuters are hoisting their handbags, briefcases, wallets and backpacks on top of Metrorail fare gates, then pulling them away as the fare gates open for them. The tourists, on the other hand, have no such magic touch. Only after they go to a vending machine, buy a paper farecard with a magnetic strip, insert it in a slot and remove it from another slot will the fare gates open for them.

The commuters' bags and briefcases have no special powers, of course. But inside them is a thin, plastic "SmarTrip" card that sends a signal for the gates to open. This type of card is known in the transit business as a "contactless" or "proximity" card: It doesn't have to be inserted into anything to work. When the card is held within three inches of a target at the fare gates, a radio signal is transmitted that prompts the gates to open and debits the proper fare amount from the prepaid card.

About 66,000 smart cards are in circulation in Washington's transit system, which carries some 300,000 passengers a day. It is the largest transit smart-card program operating in the country today and regarded as a national model.

Many other major metropolitan areas are considering, or are in the midst of procuring, such systems. Chicago has installed smart-card technology and is now running a pilot program. Seven transit agencies in the Seattle area are cooperating to procure a smart-card fare system. And San Francisco has completed a procurement for a nine- county rail, bus and ferry system that encompasses 26 different operators.

When Washington unveiled its smart card program in May 1999, few people noticed. Metro didn't spend much money on advertising, and still hasn't. But the stealth rollout picked up speed on its own. Someone would discover the card and then mention it to someone else and momentum built. "The card is just selling itself," says Gregory B. Garback, executive officer of the Department of Finance with the Washington Metropolitan Area Transit Authority. "We're noticing a tremendous amount of interest and goodwill among riders."

Riders like the fact that not only don't they have to fumble through pockets or purses for their farecard but if the card is lost or stolen, the most money they will be out is $5 to replace the card, provided they registered it initially and report the loss. If they had loaded $200 onto their card, that value can be transferred to a new one. If someone tries to use the lost card, the system recognizes it is no longer valid and deactivates the chip.

The Chicago Transit Authority is now testing a similar system. The CTA has spent $100 million to modernize, and architecturally alter, the 156 rail stations that had used a cash-and-token system. A magnetic-stripe farecard system that is also capable of handling smart cards was put in place at all rail stations and on the approximately 2,000 buses in 1997.

This past January, the CTA began a smart-card pilot program with reduced fare riders, which include the elderly and handicapped. About 1,000 people have been issued smart cards in a system that handles 1.5 million rides each weekday. Although users really like the cards, the transit authority is still studying the economics of using them throughout the system. Currently, it costs the CTA about two cents apiece for plastic mag-stripe cards. Smart cards would cost between $5 and $8, estimates Joseph Simonetti, the CTA's general manager for revenue, equipment, technology and maintenance.

Although Washington, D.C., was the first large train system to implement smart cards, Ventura County, California, has been issuing them for its buses for years. The cards can be used on any bus, in any city, in the county of 740,000 people. Unfortunately, the county had to pull the plug on the original system, which had been in place since 1995, because it was not Y2K compliant. But Ginger Gherardi, executive director of the Ventura County Transportation Commission, says that the county learned a lot of lessons it will use during the negotiations now under way for a new one, which is expected to be in place by next January.

It may seem as though a heavy-rail system would be more complicated to set up for smart cards than a bus system, but buses actually pose greater challenges. In train systems, fare gates are fixed and the equipment is wired into the walls. On the Ventura County buses, however, the equipment is freestanding, sits in moving vehicles and is placed on buses run by seven different operators. Therefore, the information gathered from the smart cards is contained on each separate bus. At night, when the buses return to the garage, the information has to be downloaded to a central computer.

In addition, the system's integrity depends on the cooperation of the bus drivers themselves. With the Ventura buses, if drivers have to alter their route, they have to push a button to alert the computer to that fact. If people want to add money to their card, they do it with the driver, who must record the transaction. Routes go different places at different times of day and drivers have to log on to the system and input that information. If they don't enter their route correctly, that affects the revenue system. With bus systems, "any smart-card system is only as good as the drivers are," Gherardi points out.

Whatever the mode of transportation, it generally takes between 18 and 24 months to get a new fare-collection system in place after a contract is signed. They have an "incredibly complex backbone," says Garback.

And as Washington-area riders discovered, there can be aggravations during phase-in. Initially, most stations had only one or two fare gates that could accept the smart cards. If there was a long line or problems at that gate, smart-card holders would just have to wait since no other exit gates were available to them. Now, all fare gates have been retrofitted to take the smart cards.

Commuters in Seattle can only wish they were in the position of being able to experience such problems. Since 1994, the Regional Fare Collection System has been working on its project, researching systems in Asia and Europe along the way. The effort involves seven different agencies in four counties, and covers rail, bus, ferry, van pool and paratransit. The objective is to have one fare system for all those agencies, using a smart card. "It sounds very simple, but it's not," says Candace Carlson, regional project manager.

On the other hand, the current system "is labor intensive and costly to manage," Carlson says. There are 200 different fare categories on the ferries alone, not to mention the 300 different transit passes on all the systems. Fares are based on age, route, time of day, disability and more. If all goes as planned, the smart-card technology would handle those calculations and speed things along in one of the most congested areas in the country.

The Seattle project is at the point in the procurement process where officials are considering which service contracts they want to enter into. One of the most important considerations is the clearinghouse that keeps track of revenues and trip data from all the regional systems to make sure the various agencies get the correct revenues. Once all the systems are merged into one, riders will be able to hop from system to system with one card.

Despite the start-up costs and initial headaches, transit officials and the public alike are finding plenty of reasons to be fond of smart cards. For one thing, the systems can save on maintenance costs. Dirt and dust swirl around in train stations and the equipment is subject to a lot of vibration. The metal particles released from brakes are like sawdust and get into the moving parts of the equipment. Tree pollen at outdoor stations gets inside the slots that grab the paper cards and gums up the works. The electronic equipment for Metro's SmarTrip cards has no moving parts other than fare-gate arms.

Metro also is likely to earn some extra revenue. SmarTrip card holders tend to store a lot of value on the card because it's durable and can be replaced, unlike the paper tickets, which if dropped or destroyed in the washing machine are like money lost. The transit authority gets the interest on that money that people are "banking" on the card. Metro hasn't yet analyzed how much extra it is earning in interest. "It could be an interesting number downstream," Garback says.

And the transit authority has big plans for the future. SmarTrip cards already can be used to pay for parking at Metro lots. By the end of 2002, Metro hopes to have installed fare boxes that accept smart cards on all buses region-wide, including those in the Baltimore area. Eventually, the transit authority hopes it will be able to track origin/destination data and adjust service levels to accommodate changes in ridership or travel patterns.

In addition, there are two pilot programs in progress. One has the transit system working with a bank so that the SmarTrip card doubles as a debit card. The other is a pilot with the U.S. General Services Administration that enables the smart card to be used also as a building security card for federal employees. Officials believe anything that boosts the utility of the transit card works to Metro's advantage.

What the smart card does is put paying for transit in the same league with other convenient payment systems that people use every day. "Transit is the last really big function that relies on cash," Garback says. "The perception is that the car is cheap" because gas, car loans and insurance can all be paid for electronically. "That's the spin we're trying to apply to transit. You don't have to take money out of your pocket."