New hope for Monsieur Moreno's computer credit card

GO to Boulevard Strasbourg in working-class northern Paris, walk up a dingy staircase, and on the third floor, a short, frizzy-haired, jeans-clad man welcomes visitors.

Meet Roland Moreno. Here, the 38-year-old Moreno invented the computer credit card, a device the French hope will soon revolutionize shopping, banking, and all other types of daily transactions.

But that was 10 years ago. Why is the inventor still living on the margin?

''I tried to be totally independent,'' he says. ''In America, an entrepreneur would have brought in an outside shareholder right away to speed development.''

Mr. Moreno's saga about bringing his so-called ''SmartCard'' to market worries Europeans. Many fear that Japan and the United States are swamping them in the electronic revolution, and European governments and companies are pouring huge sums into research and development.

''We must innovate,'' a top adviser to French President Francois Mitterrand says. ''If we don't, Europe is going to turn into a Venice, a beautiful museum from another age.''

Of course, Europe is not yet a technological museum. In several key high-tech fields, it is standing up to foreign competition. The Airbus company, for example, builds commercial airplanes as well as its foreign counterparts do. There are also the Ariane rocket, British Airways' Harrier, Fiat's world-renowned robots, and many others.

In small entrepreneurial areas, however, the Europeans believe they have faltered. It is hard to think of a continental equivalent to Apple Computer or, in a larger sense, to Silicon Valley. This is why Moreno is so important.

After studying literature and working for various newspapers, Moreno quit his job in l974 ''to invent.'' At first, he fiddled on various projects that went nowhere. Then he spotted an article in an electronics journal about PROM, a computer memory system that needs no electricity to control its data base.

''I thought of putting a chip on a ring, so it would open doors on a secret code,'' he recalls. ''Then I thought of a punch card - and presto, I had invented the electronic punch card.''

The card's possibilities are astounding. Because of its microchip, it can be programmed for all types of tasks. It could, for example, replace paper airline tickets by storing a record of when tickets are bought and used.

More immediately, French banks recently announced a 0U -se them to replace their conventional magnetic-strip credit cards and paper checkbooks. Every time the card is used in a store, the purchase price is debited directly from the card's data base. Shoppers can stop at bank registers, insert the card, and review the record of their transactions.

But Moreno's amazing card has faced many problems in gaining universal acceptance. They are the same difficulties that confront all European entrepreneurs.

The first hurdle was money. Millions of francs were needed to develop the idea, yet no French venture-capital firms were willing to invest in Moreno's company, Innovatron. Conventional banks, largely controlled by the government, were naturally wary about taking on such an upstart. In 1976, the French computer company CII-Honeywell Bull did produce a prototype, only to market it halfheartedly because the company did not control the process.

''For five years, the project floundered,'' Moreno recalls. ''I didn't want to give up control, and no one really wanted to work with me.''

Such problems are common in Europe, businessmen say. Whereas established American companies work well with small suppliers, big European companies often shun them. A small supplier also has trouble manufacturing his product. New companies in Silicon Valley don't have to look far for the plastic moldings, precision castings, and other parts needed to produce their new products. But Moreno didn't have the slightest idea where to get the microchip his SmartCard needed.

In the end, only one thing saved his project from oblivion: government intervention. In 1979, the state postal service, the PTT, pumped 60 million francs into development of the project. The PTT was projecting a future in which every French home would have a computer terminal to tap into various PTT data bases and needed a secure device granting customers access to the system and keeping personal records. The SmartCard seemed the best answer.

Government backing persuaded CII-Honeywell Bull to invest, and it helped entice Schlumberger, the oil services multinational, and the state-controlled banks to invest. Finally, Moreno had money and a ready-made market. But problems remain. The French market is too small to reap big profits from the cards.

The logical solution for Moreno would be to introduce the card on a Europe-wide basis. But politics renders this impossible: Despite the Common Market, each country's banks and communications services have to approve the card. Procedures for approval have dragged on for years.

''We must make it in the US,'' Moreno says. ''If we don't, my investors are never going to get their ioney back.''

The US will be a hard market to crack. In the past 10 years, American banks and companies have invested millions in simpler magnetic-strip cards. They will not junk that equipment right away.

But Moreno and his backers remain hopeful their card will eventually replace the magnetic-strip variety. They explain that SmartCard packs more information into a small space, and more important, it is fraudproof. A magnetic strip, in contrast, can easily be altered.

Still, the delay in bringing the card to market may continue to haunt European inventors. While they wait for government subsidies, alternatives to the SmartCard are being developed: A California company, for instance, has invented a ''laser card'' that has many of Smart-Card's advantages, and may cost much less to produce.

''I think my card will triumph in the end,'' Moreno says, but it's been 10 years and it still barely exists. ''We have a lot of work ahead of us.''

Considering his struggle, so does all of European industry.