years, the notion of a cashless society has been a futurist's
dream deferred almost everywhere - except, to some extent, in Hong
just about everyone carries an Octopus card - a rechargeable,
contactless card that is passed over a scanner to access almost
every train, bus or ferry.
territory's 6.75 million inhabitants make nearly seven million
Octopus transactions each day, worth about HK$48mil (US$6.12mi1 or
while cash remains king in this commercial hub, an increasing
number of retail merchants, from Starbucks to fast-food chains and
7-Eleven, accept the Sony-made card.
getting around on the city's sprawling public transportation
network accounts for over 90% of Octopus transactions.
Kong's embrace of the Octopus card, which requires an up-front
deposit of HK$50 (US$6.41 or RM25), results from a confluence of
factors unique to the city.
trials or early stage deployments of similar systems have been
made in Japan, Singapore, Rome and elsewhere, no major market has
replicated the breadth or depth of Hong Kong's Octopus experience.
United States, especially, lags behind Asia and Europe in
embracing smartcards, notes Eric Tai, chief executive of Hong
Kong's Octopus Cards Ltd.
the United States, I'm sorry to say, there's nothing
imminent," Tai said.
city is different. We are blessed with a number of different
ingredients that have made us successful."
carriers, one card
Hong Kong has numerous transport firms plying its roads, rails and
waterways. But early on, most agreed to sign on to the Octopus
system instead of trying to come up with their own card.
not used by the operators as a product differentiator, but as a
common service for all customers," said Tai.
when it was launched in 1997 by a group of mass transit firms,
Octopus instantly had a big potential market.
every Hong Konger, including the car-owning minority, uses public
transport at least once in a while, whether it is the subway, bus,
historic Star Ferry, or a train to the airport or to the border
with mainland China.
competing bus or ferry systems each issued their own card, the
system could never have built critical mass.
noted that, unlike government-owned mass urban transit operators
elsewhere, most bus, ferry and rail firms here are privately or
are much more profit-driven, rather than subsidy-driven," he
although Hong Kong is partly spread across islands, the territory
is compact and densely populated, making it easier and cheaper to
implement a system to which nearly everyone will have access.
says more than 95% of Hong Kong residents aged 15-65 carry a card.
The elegance of the Octopus card is its simplicity.
does not require contact to be read. At rush hour, women can be
seen passing entire handbags over scanners, also made by Sony, as
they race through subway gates.
almost as easy for men, who don't need to remove the card from
microchip-embedded card contains an electronic purse. Unless a
holder chooses a personalised card, his or her identity is
to Tai, the contactless system takes only 0.3 seconds to register
a payment, compared with one or two seconds for a contact card,
not counting insertion and extraction time.
said each card has a potential life span of roughly 10,000
value can be replenished several ways, and every transaction is
settled by the end of the day.
expanding the card's use for retail
payments, Tai said Octopus has been "reasonably"
successful. Typically, the company will collect roughly 1% of
the value of a retail purchase made with a card. Octopus
transactions average less than HK$10 at the city's ubiquitous
Maxim's cake shops, nearly HK$30 at Starbucks and more than that
in the express lanes of Hong Kong's dominant supermarket chain.
not out there to get the larger payments market. We see ourselves
as a micropayments operator," said Tai.
next frontier for Octopus is as a security device. Already, some
30,000-40,000 cards are used as main door access devices for
residents of the housing estates where many Hong Kongers live. -