For years, Europeans have been using 'smart cards' to pay their way through the day. They use them in shops and restaurants, plug them into pubic into telephones as and parking meters. In France smart cards cover anything from a bistro bill to a swimming - pool entry fee. In American, smart cards are not nearly so common -- only about 43,000 are now circulating in the US and Canada -- but Forrester Research of Cam- bridge, Mass. , predicts that number will balloon to 4.7 million by the year 2002. What is a smart card, exactly, and how does it work? Also called a chip card because of the tiny mixcroprocessor embedded in it, a smart card looks like the other plastic in your wallet. To make things more confusing, some smart cards pull double duty as regular ATM bank cards. The difference is that when you swipe your ATM (or debit) card at the grocery -store checkout, you're draining cash from your bank account. Smart cards, on the other hand, are worthless un- less they are 'loaded with cash value', pulled directly from your bank account or traded for currency. The chip keeps track of the amounts stored and spent. The advantage, in theory, is convenience: consumers bother less with pocket change and are able to use plastic even at traditionally cash -only vendors. The electronic transaction doesn't require a signature, a PIN number or bank approval. Downside: lose the card, lose the money. Most people are probably more familiar with stored -value cards equipped only with a magnetic strip, such as fare card issued to riders on the Washington metro or the New York City subway. The newer chip - enhanced versions, armed with more memory and processing power, have popped up in various places in the past years or so, from college campuses to military bases to sports stadiums. Other experiments are under way. A health -care claims processor in Indianapolis, Ind. , hopes smart cards will streamline medical - bill payments. In Ohio, food - stamp recipients receive a smart card rather paper vouchers. Smart cards issued for general commerce are rarer, unless you happen to live in a place designated for a test run, such as Manhattan's Upper West Side. But big bank and plastic - purveying kings Visa and MasterCard are hot for the idea, promising more extensive trials and more elaborate, multipurpose cards capable of rendering everything else you carry -- plastic, paper or coin-- superfluous. Today's smart cards may not be revolutionizing the way we buy the morning paper yet, but they could turn out to be right tool spur Internet commerce and banking. For the time being, though, smart cards are just another way to buy stuff. And it could be a while before even that catches on. Remember: some people still don't trust ATMs either. Why are smart cards not nearly so common in American?