American Express Co. and the U.S. Marine Corps have launched a test of smart cards designed to simplify record keeping while serving as a cash substitute.

An initial 1,000 cards have been issued at New River Marine Corps Air Station, Jacksonville, N.C., and 1,000 more are to go to Marines at nearby Camp Lejeune. Long-term plans call for card readers at bases worldwide.

In North Carolina, the cards are being used to keep track of weapons disbursements and personnel movements. Marines can also use the cards to pay for purchases at places like the Officers' Club, bowling alley, barber shop, and vending machines.

Because the chip cards also have magnetic stripes, they can be used in conventional point of sale terminals. The transactions are fully auditable, and stored value can be replaced if a card is lost or stolen.

"Instead of taking cash, you can take this card into the battlefield with you," said Master Sgt. Hector W. Ayuso of Marine Corps headquarters.

American Express has a history of supplying cards for government purposes. Since 1993 it has issued 1.4 million travel and entertainment cards to employees of more than 150 federal agencies.

The military, meanwhile, has been in the forefront of smart card testing since the 1980s. American Express ran a six-month pilot through May this year of a stored-value card on the Navy's U.S.S. Yorktown.

The Marine program, using Belgian banks' Proton technology that American Express has licensed, expands on stored value to include multiple applications, which are widely seen as a key to ultimate smart card success.

A health care application may ultimately be added. "We don't yet know the full extent of what smart technology can do," said Col. David C. Anderson, commander of the New River air station.

"We want to be the reengineering leader for the government," said Dean Ilijasic, director of emerging technologies at American Express government services in Arlington, Va.

The Marine Corps smart technologies pilot test combines an electronic purse with many features of the Multi-technology Automated Reader Card, or Marc, that the military has been using with thousands of troops in Hawaii.

Like Marc, American Express' card is a response to the Marine Corps' desire to simplify bureaucratic processes.

"In the military, paperwork covers your career, where you move, and when you are paid," said Gail Burris, a chief warrant officer at Camp Lejeune. "This card saves time and money and helps Marines be the warriors they are supposed to be."

The cards resemble typical American Express charge cards but with an 8- kilobyte chip on the front. The cards and operating system are from Bull Personal Transaction Systems, Billerica, Mass.

While Marines can load value onto the chips from credit union accounts, the most visible benefits will be administrative, the Marines said.

For instance, checking out weapons from the armory currently requires a Marine's security authorization to be copied from a paper card to a paper form. The process will be automated by inserting smart cards into hand-held computers.

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