The Octopus card (, Cantonese) is a reusable contactless stored value smart card for making electronic payments in online or offline systems in Hong Kong. Launched in September 1997 to collect fares for the territory's public transport system, it has grown into a widely used system for transport and other retail transactions in Hong Kong. It is also used for purposes such as recording school attendance and permitting building access. As of 2016, the cards are used by 98 percent of the population of Hong Kong aged 15 to 64 and the system handles more than 14 million transactions, worth over HK$180 million, every day.[1]
The Octopus card system was the world's second contactless smart card system, after the Korean Upass. It won the Chairman's Award at the World Information Technology and Services Alliance's 2006 Global IT Excellence Awards for, among other things, being the world's leading complex automatic fare collection and contactless smart card payment system. Its success led to the development of similar systems elsewhere, including Navigo card in Paris, Oyster card in London, Opal card in New South Wales, and NETS FlashPay and EZ-Link in Singapore.
History
When Hong Kong's Mass Transit Railway (MTR) began operations in 1979, it used recirculating magnetic stripe cards as fare tickets. The Kowloon-Canton Railway (KCR) adopted the same magnetic cards in 1984. The Common Stored Value Ticket was a version that held a balance for use over multiple trips. In 1989, the Common Stored Value Ticket system was extended to Kowloon Motor Bus (KMB) buses providing a feeder service to MTR and KCR stations, and to Citybus. It was also extended to a limited number of non-transport applications, such as transactions and payments at photo booths and for fast food vouchers.[2]
In 1993, MTR Corporation announced it would move to use contactless smart cards. In 1994 it partnered with four other major transit companies in Hong Kong, Kowloon-Canton Railway Corporation, Kowloon Motor Bus, Citybus, and Hongkong and Yaumati Ferry, to create a joint-venture business, then known as Creative Star Limited.[3]
After three years of trials, the Octopus card was launched on 1 September 1997.[4] Three million cards were issued in the first three months. The system's quick success was because MTR and KCR required all holders of Common Stored Value Tickets to replace them with Octopus cards within three months or have their tickets expire.[5] Another reason was a coin shortage in Hong Kong in 1997. With the transfer of Hong Kong away from British rule, there was a belief that older Hong Kong coins embossed with Queen Elizabeth II's head would rise in value, so many people held on to them waiting for their value to increase.[6][7]
The Octopus system was quickly adopted by other Creative Star partners. KMB reported that by 2000 most bus journeys were completed using an Octopus card.[8] Boarding a bus in Hong Kong without using the Octopus card requires giving exact change, making it cumbersome compared to using the Octopus card. By November 1998, 4.6 million cards had been issued, and rising to 9 million by January 2002.[5]
In 2000, the Hong Kong Monetary Authority granted a deposit-taking company licence to the operator. This increased the proportion of permitted non-transport–related Octopus card transactions from 15% of turnover to 50%.[9][10] About HK$416 million was deposited in the Octopus system at any given time as of 2000.[11]
On 6 November 2005, Octopus Cards Limited launched Octopus Rewards, a program that allows cardholders to earn rewards with participating merchants.[12] Founding partners for the Octopus Rewards program included HSBC, UA Cinemas and Wellcome.[13] The rewards are in the form of points, or reward dollars, stored on the card.[14] The rate at which reward points are earned per dollar spent differs between merchants.[15][16] Reward points can be redeemed as payment for purchases at partner merchants for at least HK$1 per reward dollar.[17]
New cards with greater levels of security were launched in 2015. Holders of first generation cards could voluntarily replace their cards at an Octopus Service Point without charge.[18][19] From January 2018, first generation cards started to become unusable.
In March 2024, Octopus Card Limited launched a version of the Octopus card with support for the China T-union network, allowing the holder to pay for public transport fares in 336 cities of Inland China. The card is topped up using HKD and automatically converted into RMB when taking non-Hong-Kong public transport.[20][21]
Etymologies and logo
The Cantonese name for the Octopus card, Baat Daaht Tùng, translates literally as "eight-arrived pass", where Baat Daaht may translate as "reaching everywhere". Less literally, the meaning is taken as the "go-everywhere pass". It was selected by the head of the MTR Corporation, the parent company of Octopus Cards Limited, in a naming competition in 1996.[22] The number eight refers to the cardinal and ordinal directions, and the four-character idiom, a common expression loosely translated as "reachable in all directions".[23] Eight is also considered a lucky number in Chinese culture, and the phrase can possibly be associated with the similar-sounding , which means "getting wealthy" in Cantonese.
The English name Octopus card was also selected in the naming competition. It also references the number eight, since an octopus has eight tentacles.[24] The logo used on the card features an infinity symbol.
Card usage
The Octopus card was originally introduced for fare payment on the MTR;[25] but usage quickly expanded to other retail businesses in Hong Kong.[26] The card is now commonly used in most public transport, fast food restaurants, supermarkets, vending machines, convenience stores, photo booths, parking meters, car parks, and many other retails business where small payments are frequently made.[27][28] Over 33 million Octopus cards are in circulation as of 2018, with the card being used by 99 per cent of Hong Kong residents.[29]
Notable businesses that started accepting Octopus cards at an early stage included PARKnSHOP, Wellcome,
Types of cards
There are two main types of Octopus card (On-Loan and Sold), and two less common types (Airport Express Tourist and MTR Airport Staff).
Main types of cards
On-Loan cards
On-Loan cards are issued for use in day-to-day functions, primarily for fare payment in transport systems. They are further classified into Child, Adult, Elder, and Personalised categories, with the first three based on age and different amounts of fare concession.[51] With the exception of the Personalised cards, On-Loan cards are anonymous; no personal information, bank account, or credit card details are stored on the card,[52] and no identification is required for the purchase of these cards. If an owner loses a card, only the stored value and the deposit of the card are lost. On-Loan Octopus cards may be purchased at all MTR stations, the KMB Customer Service Centre, New World First Ferry (NWFF) Octopus Service Centres, and the New World First Bus (NWFB) Customer Service Centre.[53]
Technology
The Australia-based company ERG Group (now Vix Technology) was selected in 1994 to lead development of the Octopus project. It designed, built and installed the Octopus system.[68] Operations, maintenance and development were undertaken by Octopus Cards Limited, and in 2005, it replaced the central transaction clearing house with its own system.[3]
The Octopus card is the first major public transport system to use the Sony 13.56 MHz FeliCa radio frequency identification (RFID) chip.[69][70] It is a contactless system, so users need only hold the card in close proximity to the reader. Data is transmitted at up to 212 kbit/s (the maximum speed for Sony FeliCa chips), compared to 9.6 kbit/s for other smart card systems like Mondex and Visa Cash.[70]
Operator
The Octopus card system is owned and operated by Octopus Cards Limited, a wholly owned subsidiary of Octopus Holdings Limited.[78] Founded as Creative Star Limited in 1994, it was renamed Octopus Cards Limited in 2002.[3]
In January 2001, the shares of Hongkong and Yaumati Ferry were transferred to New World First Bus and New World First Ferry.[79] In the same year, together with MTR Corporation, the company changed from non-profit making status to a profit making enterprise.[80]
Due to the expansion of the company's businesses, Octopus Holdings Limited was established in 2005 with Octopus Cards Limited restructured as a subsidiary. Being a payment business, Octopus Cards Limited is regulated by the Hong Kong Monetary Authority. Octopus' non-payment businesses are not subjected to such regulation and are operated by other subsidiaries of Octopus Holdings Limited.[78]
Awards
The Octopus card is recognised internationally. It won the Chairman's Award at the World Information Technology and Services Alliance's 2006 Global IT Excellence Awards for being the world's leading complex automatic fare collection and contactless smartcard payment system, and for innovative use of technology.[83]
Issues
EPS add-value glitch
In February 2007 it was found that when customers added value to their cards at self-service add-value points in MTR and Light rail stations, their bank accounts were debited even if the transactions had been cancelled.[84] Octopus Cards Limited claimed that the fault was due to an upgrade of communication systems. Initially, two cases were reported. The company then announced that use Electronic Payment Services (EPS) at add-value service points would be suspended until further notice, and that it had started an investigation into the reasons for the problem.[85]
On 27 July 2007 it was announced that faulty transactions had been traced back to 2000, and that a total of 3.7 million Hong Kong dollars had been wrongly deducted in 15,270 cases. The company reported that there might be cases prior to 2000, but that only the past seven years’ transactions were stored. The company stated it would co-operate with banks and EPS Company Limited, operator of Electronic Payment Services, to contact customers involved and arrange a refund within ten weeks.[86]
See also
- Digital currency
- List of public transport smart cards
External links
References
- Company Profile Octopus Cards Limited, September 2016, retrieved 1 March 2018^
- Our winning card Tradelink Electronic Commerce Limited, January 2005, retrieved 21 April 2007^
- Our History Octopus Holdings Limited, retrieved 17 May 2007^