Chase Manhattan Corp., Citicorp, MasterCard International, and Visa International are putting their competitive rivalries aside to make a point about smart cards.

The four companies announced plans Wednesday to test the advanced card technology this fall in New York City. They hope to prove that an electronic cash system, with value stored in the computer chips on cards, can work as smoothly as credit cards and gain similarly widespread public acceptance.

Their plan is limited to Manhattan's Upper West Side, and with 50,000 cardholders, it will be more modest than Visa's Olympics-related showcase in Atlanta this summer, where prepaid bank cards could number in the millions.

But the New York goal is to show that competing systems and brands can coexist - and ultimately to encourage many hesitant bankers to jump on the smart card bandwagon.

While MasterCard and Visa have worked together on technical standards, they have not previously joined in a market trial. They view the New York test - scheduled for the fourth quarter - as "an opportunity to demonstrate interoperability," said Diane Wetherington, a MasterCard senior vice president.

Each of 500 participating merchants will have a single card-accepting terminal.

"Only by joining forces and offering the merchant a chance to put a single terminal at the point of sale and telling a customer he doesn't have to worry about which brand he uses" can smart card advocates increase the likelihood of the cards' success, said Henry Lichstein, a Citicorp vice president.

The companies will target such cash-oriented outlets as "convenience stores, fast-food chains, video rental stores, movie theaters, and drug stores," said Ms. Wetherington.

The big-city location and participation of the nation's two biggest banks are "a major indication that this is more than a toy," said David Brooks, executive vice president at Visa.

Indeed, the program is likely to gain the prominence of such other significant chip-card trials as Mondex in England, Visa at the Olympics, and a MasterCard project in Australia.

But Ms. Wetherington said it is still "a first step in the introduction of smart cards."

"There is certainly substance" in the New York effort, said Peter Quadagno, an industry consultant formerly with Chemical Bank and Electronic Payment Services Inc. The crucial questions, he said, are: "How long will it take for consumers to adopt, and what does it mean?"

MasterCard International president Eugene Lockhart acknowledged that the business case for smart cards remains to be made. "We have to spend some money to find it out," he said, and he expects the New York test to reveal a lot about consumer and merchant acceptance and about the roles of the big brand names.

Chase and Citibank said they would reissue 50,000 automated teller machine and credit cards with chips. No merchants have yet been signed up.

"Developing a terminal to handle two brands is critical," said Visa's Mr. Brooks. "We're committed to doing it right, not quickly."

Signing up merchants has been a major challenge for First Union Corp., NationsBank Corp., and Wachovia Corp., which are participating with Visa in the Atlanta smart card program.

Ms. Wetherington said intensive merchant and consumer education will be needed to spur adoption.

David Weisman, an analyst at Forrester Research in Cambridge, Mass., said smart cards would "roll out more like cable TV." Even after 20 years, debit cards are struggling for consumer awareness, he noted.

Mr. Quadagno, the consultant, said smart card acceptance nationwide would be an "evolutionary process, not a revolutionary one."

"When major forces that usually butt heads in the banking industry join forces, it means they realize" teamwork is a key to success, said Benjamin Miller, a Bethesda, Md., consultant and organizer of the Cardtech/Securtech conference. He predicted other regional alliances would form in coming months.

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