Bank of China Group and Standard Chartered Bank, two of the largest financial institutions operating in Hong Kong, launched a Visa Cash experiment there last week.

The banks described the program, Prime Visa Cash, as Asia's first "open" stored-value, chip-based card project.

Each bank will sell through its branch network 100,000 cards with face value of 200 Hong Kong dollars, the equivalent of U.S. $26.

Those cards are disposable, but as the pilot progresses, the banks plan to issue reloadable cards. A full rollout is expected by July 1997.

More than 1,000 Hong Kong merchants - including fast-food chains, video shops, bookstores, and department stores - have signed on to accept the payment cards. Some terminals have been activated; more are being installed.

Ten more Visa member banks have indicated a desire to join the program, with special interest in adding the Visa Cash function to existing credit or debit cards, the card association said. The program may spread to Macao and southern China.

The British colony, which reverts to Chinese ownership next year, had already shown signs of becoming a smart card hotbed. Its largest bank, Hongkong and Shanghai Banking Corp., is one of 17 owners of the competing Mondex International group. Hongkong and Shanghai is preparing Mondex trials in several Asian countries.

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