Visa U.S.A. wants to test some of the limits of smart card technology in an 18-month pilot announced this week with MBNA Corp. in Wilmington, Del.

In what is billed as a major corporate-campus showcase of multiple- application capabilities, 3,000 MBNA employees will use cards produced by De La Rue Card Systems.

The Visa Cash stored-value service will coexist on the cards with the Visa Smart Credit function and a frequent-shopper point system for rewards from designated merchants.

MBNA will also offer two other variations: disposable Visa Cash cards with a maximum value of $10; and reloadable cards that can store up to $100 in electronic cash as well as up to nine different loyalty applications.

The test emphasizes Visa's resolve to boost smart card activity in the United States. MBNA could prove a strong ally, given that it is second only to Citicorp in credit card issuing and has owned a seat on the board of MasterCard International, parent of the rival Mondex smart card system.

MBNA joins longtime Visa loyalist BankAmerica Corp. as an in-house experimenter with Visa Cash and other chip-based applications.

"This is an opportunity for us to test a system that we think will represent a significant development in the industry in years to come," said Brian D. Dalphon, senior executive vice president of MBNA.

MBNA vice chairman David Nelms said the company is exploring how to "enhance the value of our core credit products," whether by combining many features on a card or "using the power of the chip to provide more flexible rewards programs."

Loyalty points in the pilot will be attached to chip-based purchases. For example, daily purchases of coffee might earn the 10th cup free, or three restaurant meals earn a fourth free.

MBNA has more than 500 university or college affinity credit cards and might look to those campuses as outlets for the multiple features, Mr. Dalphon said.

The MBNA pilot will not run on the Java open platform standard that Visa is promoting worldwide, but "that is simply a matter of the availability of the technology," said Visa U.S.A. senior vice president Diana Knox.

De La Rue said it has the Java technology with "dynamic reloading" of applications available if MBNA decides to use it. "The future of smart cards lies in sophisticated, multifunction chips like the ones to be used in this pilot," said David Stonely, De La Rue's president for North America in Exton, Pa.

Technologists like Jerome Svigals, a Redwood City, Calif.-based consultant, have pointed out applications are currently limited by the available memory chips on cards. "It is a good experiment and they are going to get experience," he said of Visa and MBNA, "but I don't think it is a good consumer test."

He contended Mondex's recently announced loyalty pilot with Burger King and Chase Manhattan Bank in the New York area is a more valid gauge of public response.

"Rather than being a test of the technology platform, this is a test of whether or not MBNA can demonstrate added utility to their cardholders," Ms. Knox said.

"Closed environments are a good way for smart cards to emerge, but to do it on an open platform you do need a financial institution that is prepared to put muscle behind it," said Mr. Stonely. "In the end that is where the world is going and MBNA's commitment is an example of that."

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