Octopus card
The Octopus card is a rechargeable contactless smart card used in an electronic payment system in Hong Kong. Originally launched in September 1997 as a fare collection system for the city's mass transit systems, it has grown into a widely used electronic cash system for convenience stores, supermarkets, fast food restaurants, parking garages and other point-of-sale applications, as well as to control access in offices, schools and apartments. Using a card simply involves tapping it against an Octopus reader, and recharging can be done with cash at add-value machines, or via direct debit from credit cards and bank accounts.
Octopus has become one of the world's most successful e-cash systems, with over 12 million Octopus cards in circulation (nearly twice that of Hong Kong's population) and over 8 million transactions per day, with over 100 service vendors (as of January 2005). The operator of the Octopus system, Octopus Cards Limited, a joint venture between MTR Corporation and other transport companies in Hong Kong, has won a number of contracts to extend Octopus-style systems to the Netherlands and Changsha.
Getting and using an Octopus card
Two types of Octopus cards are generally used: on-loan (anonymous) and on-loan (personalised).
An on-loan Octopus card is anonymous and can easily be purchased at Mass Transit Railway (MTR) and Kowloon Canton Railway (KCR) stations. No identification is required. If an owner loses it, only the cash stored is lost. No personal information, bank accounts or credit cards are stored in the card. Payment is made (when boarding a bus, passing through a ticket gate or buying groceries) by tapping the card against an yellow and orange Octopus card reader, and the ticket amount is deducted from the card. More money can be added to the card via "add-value machines" located at all stations in the MTR and KCR networks, or with the help of cashiers at supermarkets, convenience stores and MTR and KCR service centres.
Because Octopus cards are contactless, a visitor to Hong Kong will find it strange to see people tapping their wallets, handbags, backpacks or jackets on the Octopus readers. The card can be read through common materials such as cotton or leather, for up to a few centimters away from the reader, and takes about 0.3 seconds per transaction.
The card can be used on nearly all Hong Kong transportation systems, and many stores in the city, most notably, 7-Eleven convenience stores, McDonald's, other fast food restaurants and Starbucks coffee shops.
An anonymous on-loan Octopus card can store a maximum of HK$1,000, and has a deposit of HK$50. The maximum negative value on a card is HK$35; this allows cardholders to take one trip even if the balance on the card is only HK$0.01. (The maximum cost of a trip on any of the rail networks is HK$34.8, for a trip from East Tsim Sha Tsui (KCRC) to Lo Wu (KCRC)).
| Type | Colour | Cost and use |
|---|---|---|
| Child | Fuchsia | Children aged between 3 and 11. A card is sold for HK$70 with an initial value of HK$20. Children's fares are deducted where applicable. |
| Student | Purple | Eligibility varies; some transport companies do not offer student fares and adult fares are deducted. A card is sold for HK$100 with an initial value of HK$50. |
| Adult | Dark yellow (also rainbow) | The standard version of the Octopus card. A card is sold for HK$150 with an initial value of HK$100. |
| Elder | Green | Eligibility varies between different public transport companies as well as routes operated by the same company; if no elder fares are available, adult fares are deducted. A card is sold for HK$70 with an initial value of HK$20. |
| Personalised | Rainbow | Registration is required; can be used to access schools, buildings, etc. |
Personalised cards
Imprinted with cardholder's name and photo (optional), a personalised Octopus card functions automatically as a Child, Adult or Elder card by recognising the cardholder's age stored on the card, automatically accounting for concessionary fares.
In addition to all the functions of an ordinary card, can be used as a key card for access to some residential and office buildings, primarily those built or managed by MTR Corporation. The card can be frozen to prevent unauthorized use should the card be lost. According to Octopus Cards Limited, City University of Hong Kong as well as more than 50 secondary schools in Hong Kong use the Octopus card to record the attendance of students, in lieu of roll calls, and to manage library books.
Automatic Add Value Service
The Automatic Add Value Service (AAVS) can be added to a personalised card or an ordinary card. The owner of an Octopus card can sign up to use a local bank account or credit card to top up the value on the Octopus automatically. The card is automatically topped up with HK$250 after the balance goes to or below zero. Each card can be automatically topped up once every 24 hours.
Sold-On cards
Sold-On cards refer to "special edition" souvenir cards, usually with tie-ins to a movie or a particular event. They are usually sold at a premium (usually HK$100), with limited initial stored value (usually HK$10) and cannot be refunded, but can otherwise be used as ordinary cards. Such specials have included a card for the Mid-Autumn Festival, for the year 2004, and for the movie DragonBlade.
MTR Airport Staff Octopus
A special Octopus card is available for staff at Hong Kong International Airport for cheaper commuting between the airport and town stations via the MTR.
Airport Express Tourist Octopus
The MTR's "Airport Express Tourist Octopus - 3-day Hong Kong Transport Pass" includes two versions: a HK$220 card with 1 free Airport Express single ride included and a HK$300 card with 2 free single rides included. The free journeys are valid for 180 days from the date of purchase. Both versions allow 3 days of unlimited rides on the MTR, HK$20 in usable value (for non-MTr rides or other uses) and a HK$50 refundable deposit.
Octopus gadgets
There is an Octopus watch which contains the Sony FeliCa smart card embedded in a plastic wristwatch. Users can simply wave their arm over the sensor. These watches can be purchased at MTR service counters and 7-Elevens when available. Nokia also produced an Octo-phone, which had the smartcard embedded in the "Xpress-on" covers used in the Nokia 33nn series of mobile phones, such as the popular Nokia 3310 phone.
Operation
Octopus Cards Limited (OCL) is a private company that settles accounts between the Octopus system and the operators/merchants. Because of this settlement function, OCL has a deposit-taking licence by the Hong Kong Monetary Authority (HKMA). According to HKMA, HK$416 million ($53.3 million) is deposited in the Octopus system at any given time (as of 2000).
Octopus is specifically designed so that card transactions are relayed for clearing on a store and forward basis, without any requirement for reader units to have realtime round-trip communications with a central database or computer. The stored data about the transaction may be transmitted by network after hours, or in the case of offline mobile readers may be retrieved by a hand held device, for example a Pocket PC.
In practice, different data collection mechanisms are used by different transport operators, depending on the nature of their business. For example, the MTR equips its transit stations with local area networks that connect the various components that deal with Octopus cards - turnstiles, add-value machines, analyzers and customer service terminals. Transactions from these stations are relayed to the MTRC's Kowloon bay headquarters through a frame relay wide area network, and hence onwards to OCL for clearing.
Technology
The Octopus system was created by AES ProData (Hong Kong) Limited, now known as ERG Transit Systems a member of the ERG Group based in Perth, Western Australia. AES Prodata is responsible for the design, build, operation, maintenance and financing of automated fare collection in the Octopus system.
The Octopus card uses radio frequency identification (RFID) technology so that users need only hold the card in close proximity of the reader. Physical contact is not required. The Sony 13.56 MHz FeliCa RFID chip is used in Octopus with over 12 million units delivered to Hong Kong. Octopus uses a nonstandard system for RFID, since there were no standards in the nascent industry during its development in 1997.
History
Two major railroad companies in Hong Kong, MTR and KCRC, wanted to upgrade their common ticket system (called Common Stored Value Tickets, which used plastic magnetically sensitive cards.) To fully utilize the potential of the new system and to reduce the development cost, they decided to invite the other three major public transport operators - Kowloon Motor Bus, Citybus and the Hong Kong and Yaumatei Ferry - to join their venture.
As a result, Creative Star Limited (renamed as Octopus Cards Limited in January 2002) was established in June 1993 to oversee the development and implementation of the contactless smartcard.
In 1997, the Octopus system was launched. With a single card, a commuter could travel across different transport modes without the hassles of finding exact change for individual journeys. And it has become the most popular payment method on public transit.
On June 29, 2003, Octopus-card operated parking meters went into operation to begin the effort of replacing 17,000 parking meters using the less popular e-Park smartcard. The conversion of all meters was completed on November 21, 2004.
In November 2003, Octopus Cards Ltd. secured a HK $200 million contract to help provide contactless smartcard technology in The Netherlands' system, combining the fare collection system of all its public transport companies -- starting with rail operator Nederlandse Spoorwegen, bus and tramway operator Connexxion, public transport companies of Rotterdam (RET) and Amsterdam (GVB) and the tram system in The Hague (HTM).
Today, using the Octopus Card, you can access areas in buildings (such as your own apartment), perform staff management, pay for carparks and even make facility bookings.
Operator
- Main article: Octopus Cards Limited
As of 2005, Octopus Cards Limited, the operator of Octopus, is a joint-venture between six transit companies, namely MTR Corporation (57.4%), KCR (22.1%), Kowloon Motor Bus (12.4%), Citybus (5%), NWFB (3.05%) and First Ferry (0.05%). The company has been aggressively expanding the use of Octopus in Hong Kong, and has won a number of contracts extending Octopus-style systems overseas, including the Netherlands and Changsha in Mainland China.
Advantages over other smartcard systems
The 1997-vintage Octopus system may not be particularly advanced compared to today's latest technologies, but it is one of the most successful smartcard systems around the world. There are several reasons why:
- It is a joint venture of the major transport operators in Hong Kong. In many countries, different transportation systems develop their own card systems, giving rise to compatibility problems and reducing their popularity.
- In many countries such as Singapore and Malaysia, smartcards are government projects and the cards double as identification cards. This gives rise to privacy problems. Indeed, lack of anonymity is one of the reasons for the failure of many cash cards, such as VisaCash.
- Visitors to Hong Kong can easily purchase and use Octopus cards, with a full refund on unused credit. Unlike other use-it-or-lose-it stored value cards, Octopus cards are fully refundable which makes the barrier to entry very low for tourists and short stay visitors.
- Octopus has a variety of uses beyond transit payment, including parking garage fees, vending machines, apartment building security and point-of-sale applications.
In fact, Mondex (from MasterCard) specifically cited the failure of Mondex in Hong Kong as due to the entrenchment of the Octopus card.
Future developments
- Plans were announced in February 2003 by the Government of Hong Kong to introduce Octopus payments to taxis. As of 2005, such plans have stalled owing to arguments over accounting for tips.
- MTR has signed an agreement with the developer of the Shenzhen Metro's automatic fare collection system towards making Octopus cards compatible with the fare collection system in Shenzhen Metro.
See also
- Mondex and Visa Cash
- MTR, KCR, KMB, Citybus, NWFB and First Ferry
- Transportation in Hong Kong
- Electronic money
- Shenzhen Metro
- Smart card
References
- NTT DoCoMo and Sony team up on contactless smart cards for mobile phones Computer Weekly, 28 October 2003.
- Working paper. Octopus and Mondex - the Social Shaping of Money Lucia Liu, April 2002.
- ERG Group FY2004 annual report.
- Granting of authorisation to Creative Star Limited as a deposit-taking company Hong Kong Monetary Authority press release, 25 April 2000.
- Mondex press release citing failure in Hong Kong
- Modern Computer press release on cooperation with MTR From the homepage of Shenzhen Modern Computer, the provider of automatic fare collection systems to Shenzhen Metro.
- Extending Octopus to Shenzhen. ''Hong Kong Commercial Daily'', November 8, 2003. (News report in Chinese)
- Press release on Nokia Octo-phone. From Octopus cards homepage.
Further information
- List of Octopus operated parking meters in Hong Kong. From the homepage of the Transport Department of the Government of Hong Kong.
- Special limited edition 2004 Octopus card. From Octopus cards homepage.