By MARIA TROMBLY

(September 07, 2000) American Express Co. today announced plans to launch a new service under which holders of its credit cards who are worried about the security of buying goods online will be able to obtain single-use credit card numbers.

The free service, called Private Payments, is scheduled to become available within a month to consumers and small businesses that have American Express cards. As part of the Private Payments announcement, American Express also announced a deal with San Jose-based Privada Inc. under which the two companies plan to develop "private browsing" technology that's supposed to let Internet users specify how much of their personal information is shared when they visit Web sites.

Both moves are aimed at easing concerns about transacting business online, according to American Express officials.

"Consumers have a real fear that their credit card information can be stolen when they're shopping on the Internet," said Alfred Kelly Jr., group president of the New York-based company's U.S. Consumer and Small Business Services unit. "This fear is an obstacle, as we see it, to a real boom in e-commerce."

As part of the Private Payments service, Kelly said, customers who go to a secure portion of the American Express Web site will receive a unique random credit card number that they can then use when buying items from online merchants. "It's used for one purchase and will expire after the purchase is complete," he said.

Some European banks already offer similar services, but American Express appears to be the first company to do so in the U.S. Neither Visa International Inc. in Foster City, Calif., nor MasterCard International Inc. in Purchase, N.Y., have made similar announcements, and neither company responded by publication time to requests for comment on whether they have such services in the works.

Worries about the potential theft of credit card numbers, and the inconvenience of getting new ones if that happens, might be enough to prompt consumers to take the extra step of asking American Express for a disposable number when they're going to shop online, said Frank Prince, an analyst at Cambridge, Mass.-based Forrester Research Inc.

"Provided that you trust American Express, it materially reduces the risk that a stored credit card could be used to in some way damage you," Prince said. Consumers who have just started using the Internet are the most concerned about security issues, he added. "As people get more used to the Internet, their privacy concerns are assuaged," he said. "But there are always more new people."

As part of its deal with Privada, American Express is making a minority investment in the developer of digital privacy infrastructure technology. The promised private browsing technology is due later this year and will let users choose from settings that range from sharing their full identity on the Internet to remaining completely anonymous, Kelly said.