MasterCard International has launched a smart card pilot with three major Australian banks.

The banks are the Australia and New Zealand Banking Group, the Commonwealth Bank of Australia, and Westpac Banking Corp.

The MasterCard Cash cards have embedded computer chips that contain stored value, and have magnetic stripes for conventional credit or debit applications.

The chips on the cards are reloadable; they can be replenished after the cash value has been used up.

The cards are issued by banks to applicants and linked to a checking account or credit card.

MasterCard's senior vice president, Diane Wetherington, said up to 10,000 consumers and 250 merchants are expected to take part in the pilot.

In other chip card tests, including a trial planned by Visa in Atlanta this summer, the cards will be disposable after use. But Mondex electronic purse cards, which are being tested in Britain, are reloadable.

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