Octopus card
The Octopus Card (八達通 in traditional Chinese) is a reloadable, built-in processor, contactless card for use in electronic payment systems in Hong Kong. Originally launched in September 1997 as a payment card for the city's public transportation service, the Octopus card has become a widely used payment system in stores, supermarkets, restaurants, and other types of retail businesses. At the same time, a second market has developed in security systems, access to buildings and schools. To use it, you just have to bring it close to an Octopus reader and recharging can be done with machines that accept cash or directly by transfer from a credit card or bank account.
Octopus has become one of the most successful electronic payment systems, with about 17 million cards in circulation (about twice the Hong Kong population) and about 8 million daily transactions. The operator, a consortium in which the Hong Kong transport system participates, has won contracts to install similar systems in the Netherlands and in the Chinese province of Changsha.
The recognition obtained at an international level has earned it an award from the World Information Technology and Services Alliance in 2006, the Global IT Excellence Award for its innovative technology.
Name and logo
The Chinese name for the Octopus card literally means "eight place step". Eight is a significant number in Chinese, and is often used to indicate "many". For example, the phrase 四面八方 ("four sides eight directions") is a common expression meaning "in all directions". Eight is also considered a lucky number in Chinese culture. The name "Octopus" (octopus) is derived from the use of the number eight, since an octopus also has eight tentacles. The name is also particularly appropriate because "octopus" it has the connotation of being able to grab many things at once, and this ability is transferred to the users, who can use it in different transactions.
The logo used on the card also contains a Möbius strip in the shape of the number 8 to indicate the "infinities" card possibilities. The mathematical symbol for infinity also looks like a rotated eight and is thought to be derived from a Möbius strip (although its actual origin is unknown).
According to Apple Daily, the Chinese name was coined by Jack So, who was then head of MTR Corporation, the company that gave rise to Octopus Cards Limited.
Obtain and use the card
Reloadable cards can be purchased at Hong Kong Mass Transport Railway (MTR) and Kowloon Guangdong Railway (KCR) stations. No identification is needed because it is anonymous, but if the card is lost, all the money on it is also lost.
To pay using the card (to use public transport or buy somewhere) you have to approach an Octopus card reader (which are normally painted with an orange logo similar to the one on the card); then the system will emit an Octopus beep to announce the payment and at that moment the amount paid and the available balance will appear on the screen; or an error sound will be emitted if the card is not accepted due to insufficient balance. In the MTR, the system records which station the user has entered and which he has left (you have to swipe the card 2 times), and then automatically calculates what it has to deduct from the balance.
The cards can be recharged using the recharge machines that are located in all MTR and KCR stations, or in supermarkets, convenience stores and service centers participating in the program.
These cards do not require physical contact with the readers, and can be read through common materials, so it is very curious to see people bringing purses, bags, jackets or wallets to the readers.
Octopus cards can be used to pay for tickets or make purchases throughout Hong Kong's transportation system as well as in many shops and restaurants in the city, including 7-Eleven, McDonald's, convenience stores, convenience, Starbucks, and other fast food chains. It can also be used to pay at food vending machines, photo booths, or copiers.
A reloadable Octopus card can carry up to HK$1,000, and has a deposit fund of HK$50 that is not posted, so it can have a negative balance of HK$35, allowing users to take a trip of emergency if they run out of money on the card.
Differential rates
Octopus cards are categorized into different rate levels to grant the differences offered by public transport companies:
| Type | Color | Cost and use |
|---|---|---|
| Child | Fucsia | Children between the ages of 3 and 11. The card is sold for HK$70 with an initial value of HK$20. Rates for children are deducted wherever they are established. |
| Student | Violeta | Eligibility varies; some transport companies do not offer student fees, and in that case adult fees are charged. The card is sold for HK$100 with initial value of HK$50. When non-personalized student cards are used in the MTR, a MTR student card is required. This is already discontinued, but the cards that remain in circulation still work. |
| Adult | Dark yellow (also rainbow) | The standard version of the Octopus card. The card is sold for HK$150 with initial value of HK$100. This color is the logo of the operator, Octopus Cards Limited. |
| Age | Green | It depends on public transport companies (and even on routes within the same company) (e.g., Citybus considers the older than 60 years, and KMB to the older than 65); if there are no age-old rates available, the adult is charged. The card is sold for HK$70 with initial value of HK$20. |
| Staff | Arcoíris | A record is required. Most of these are used by students, but can also be used to enter schools, apartment buildings and other facilities. |
Rates and discount schemes
MTR and KCR charge less for trips made with an Octopus card, compared to those made with tickets. For example, the cost of a single trip from Chai Wan to Tung Chung is HK$23.1 with an Octopus, and HK$26 with a ticket.
Other public transport operators have also offered discounts that specifically require the use of an Octopus card: for example, KMB offers a 10% discount on journeys that cost more than HK$15. Transfer fares (discounted fares on the second part of a journey that require changing buses or switching between two modes of transport, for example from an MTR to a minibus) also require an Octopus.
Custom cards
In addition to the standard "on loan" cards, which are anonymous, personalized "rainbow" cards are also available. These are printed with the name of the card holder and their photograph (if desired), and automatically work as a child, adult or senior card because they recognize the age of the user that is stored on the card (with which the appropriate discounts). Students between the ages of 12 and 26 in Hong Kong can apply for full-time student status. In May 2003 there were 380,000 users with rainbow cards.
In addition to all the functions of an ordinary card, this card can act as a key to access some residential and office buildings, usually those built or managed by the MTR corporation. The card can be locked to prevent unauthorized use if it is lost. According to Octopus Cards Limited, the City University of Hong Kong and more than 50 secondary schools in Hong Kong use the Octopus card for student attendance instead of roll calls, and for student loan. library books.
When a student requests grant privileges, they are automatically issued a personalized card; some non-personalized are still in circulation.
Automatic top-up service
The Automatic Reload Service (AAVS) can be used for personalized or regular cards. The owner of an Octopus card can request that the card be reloaded from a bank account or a credit card automatically. After the charge drops to zero, the card is reloaded with HK$250. Each card can be reloaded once every 24 hours. As of 2005, 20 local banks provide this service, including HSBC and Bank of China (Hong Kong).
Souvenir Cards
Often, the operator issues special edition souvenir cards, which usually include an offer for a particular movie or event. They are normally sold as premium (HK$100), with a limited starting value (usually HK$10) and cannot be reloaded, but can be used like any other Octopus card in other respects. Operators have issued special cards for events such as the Mid-Autumn Festival, the 2004 New Year, and the release of the Dragon Blade movie.
Special Purpose Cards
The Octopus MTR tourist card "Airport Express - 3 day Hong Kong Transport Pass" (Airport Express - Hong Kong 3-Day Transport Pass) includes two versions: a HK$220 card with one free airport express one-ride and a HK$300 card with two free trips. Both free trips are valid for 180 days from the date of purchase. Both versions also allow three days of unlimited travel on the MTR, HK$20 in usable value (for travel on non-MTR systems or other uses), and a HK$50 deposit that can be returned.
Hong Kong International Airport employees have at their disposal a special card (MTR Airport Staff Octopus, Octopus MTR for airport staff) for cheaper transport between the airport and the stations through from the MTR Airport Express.
Octopus Items
Octopus sells "Octopus watches" - plastic wristwatches with an embedded Sony FeliCa chip, made by Egana Goldpfeil. When making their payment, users simply wave their arm in front of the card reader. These watches can be purchased at MTR service locations and at stores where they are available. For the year ending 31 May 2003, 11,482 watches had been shipped to Octopus Cards Limited. These watches are not compatible with the student rate.
Nokia also made an Octo-phone, which has the card built into the "Xpress-on" of the 33XX series mobile phones, such as the popular Nokia 3310.
Returning an Octopus Card
Octopus cards are immensely popular with tourists (even temporary travelers from Shenzhen and the rest of mainland China), which explains why the number of Octopus cards in circulation is twice the number of people in Hong Kong (although some people have more than one card). MTR studies show this is because the deposit and remaining value on the card can be returned, except for the HK$7 administration fee for cards returned within 3 months of issuance, which was implemented on November 1, 2004 to avoid this practice (for personalized cards the fee is HK$10, for cards issued after November 1, 2004, or for those returned within five years of issue).
Operation and technology
The system was designed by AES ProData Limited, currently known as ERG Transit Systems, of the Australian group ERG, which has a contract for the design, installation, operation, maintenance and financing of the system.
The card uses Sony's 13.56 MHz FeliCa RFID chip, and other related technologies, which were first applied in Hong Kong. It is a touch and swipe system, whereby users have to bring the card close to the reader without the need for physical contact. The data is transmitted at a speed of up to 212 kbits/s, compared to 9.6 for Visa Cash.
The system does not use the ISO 14443 standard, but its own, since these standards did not exist when it was developed in 1997. The distance at which the card can be read varies between 3 and 10 cm, depending on the reader.
Collection
The system is designed in such a way that transactions are transmitted for collection according to the store-and-forward method, so readers do not have to have real-time communication with the central computer. The stored data will be transmitted overnight or collected with portable devices.
Each company has an operations center where it stores all the data concerning the Octopus system: recharges, payments, etc., waiting to send them to the Central System Collection House (CCHS in English) for final payment.
History
The MTR network adopted a system of reusable plastic magnetic cards when it began operations in 1979. These cards were used as one-way tickets or kept as stored value tickets. The KCRC adopted the same magnetic cards in 1984, and the stored value version was renamed Common Stored Value Tickets, or Common Stored Value Tickets.
In 1989, the Common Saved Value Ticket system was extended to KMB trucks, providing service to MTR/KCRC stations and the Citybus, and was also extended to a limited number of non-transport applications, such as payment in the instant photo booths and vouchers for fast food.
MTR eventually decided to embrace more advanced technologies, announcing in 1993 that it would upgrade to contactless smartcards. To get more buy-in, MTR and KCRC invited three franchise freight operators in Hong Kong; the KMB, Citybus and the Hong Kong and Yaumati Ferry to form a joint company in 1994, called Creative Star Limited (renamed Octopus Cards Limited in January 2002). (The only major public transport operator not to join them at that time was China Motor Bus, which abandoned public transport altogether in 1998, in favor of its property development business, and transferred its trucking routes to the NWFB.).
The Octupus system was launched after three years of difficulties on September 1, 1997. Initially for use in services offered by the five agreement partners, it was quickly extended to other transportation services. In 2000, the Hong Kong Monetary Authority gave a company fundraising permit to the operator, removing previous restrictions that prohibited the Octupus from generating more than 15% of its profits from non-traffic functions.
In January 2001, a new shareholder agreement was signed and Hong Kong and Yaumati Ferry's shares in the operator were transferred to NWFB and New World First Ferry. In conjunction with the privatization of its parent company, MTR Corporation, Octopus Cards Limited was transformed from its previous status as a non-profit organization to a for-profit company.
On June 29, 2003, the Octopus card found another use when the Hong Kong government began replacing all 18,000 parking meters with a system operated by the Octopus card system. The replacement was completed on November 21, 2004. A number of government facilities including public swimming pools and sports complexes also adopted the Octopus system at the same time.
In November 2003, Octopus Cards Limited secured a HK$200 million ($25.64 million USD) contract to provide contactless SmartCard technology in the Netherlands system combining the collection system of fares of all public transport companies - starting with the railway operator Nederlandse Spoorwegen, the truck and tram operator Connexxion, the public transport companies of Rotterdam (RET) and Amsterdam (GVB) and the tram system in The Hague (HTM).
Octopus Card Adoption
The Octopus system was launched in 1997, and 3 million cards were delivered in the first three months. The main reason for the rapid success of the system was that the MTR and KCR required all users of common stored value tickets to exchange them for Octopus cards within three months, or risk their tickets becoming obsolete, thus making the database of 3.3 million users (2.2 million from MTR and 1.1 from KCR) was forced to quickly switch from one system to another. In November 1998, 4.6 million cards had been issued, a sum that rose to 9 million in January 2002.
The Octopus system was quickly adopted by other Creative Star business partners, and KMB announced that most bus trips in 2000 were made with Octopus cards; very little currency use (to board a bus in Hong Kong you need to give exact change, which can be cumbersome. For example, the standard price for a trip across the port in March 2005 was HK$8.90 (US$1.14), for which at least seven coins were needed.)
One of the key factors for the success of the Octopus cards is their ubiquity: the card received full support from all transport operators in a particular area, thus facilitating its mass acceptance. This model has been adopted in the Suica system of the East Japan Railway Company and the ICOCA of the West Japan Railway Company.
Comparison with other electronic payment systems
Mondex specifically cited the widespread popularity of Octopus as the reason for its withdrawal from the Hong Kong market in 2002, despite having launched its cards a year before Octopus (in 1996) and having the support of two of the banks Hong Kong's largest (HSBC and its subsidiary, Hang Seng Bank). Academic studies suggest that the main cause was the lack of a sufficiently compelling reason for commuter companies to use the Mondex system, which was the case for Octopus because it was supported by local public transport companies, and therefore of commuter transport and other travelers who used the service.
An additional drawback was that Mondex cards took 5 seconds to process, compared to a 'tap and play' Octopus card. of 0.3 seconds. 84% of respondents to a University of Auckland study attributed Octopus' success to fast service.
Octopus cards are also anonymous. Lack of anonymity has been cited as the reason for the failure of many electronic payment cards such as VisaCash, which was backed by two large Hong Kong banks, Bank of China and Standard Chartered Bank.
Comparison with other transport card systems
Since the 1970s, transit agencies have been using prepaid stored-value cards. This market has moved from magnetic stripe technology to smart chip cards since the early 1990s; Hong Kong was the first major system to make the transition.
The Sony FeliCa technology used by Octopus is also used by Singapore's EZ-link card for its mass transit systems, the Suica on Japan's railways, and the smart card system in Nagasaki, Japan. However, they all use more up-to-date technology, compared to the relatively old Octopus. The EasyCard of Taipei's rapid transit system is made explicitly based on Octopus cards, and the company Octopus Cards Limited worked on the development of the Shenzhen TransCard for Shenzhen subway. Other smart card transport have used Octopus cards as a model, such as the London Transport Oyster Card.
The Chicago Card from the Chicago, Illinois (USA) transportation authority also uses smart card technology, which allows users to touch a turnstile with their card to enter the system.
In Latin America, the first city to implement a similar system was Bogotá, when it put into operation the BRT-type transport system, Transmilenio, in 2001, with mifare-type cards (Capital Card), which are mostly for anonymous use, however the use of personalized cards (Own Card) is becoming popular.
The city of Santiago de Chile operates its metro rail system through the use of the multivía card which is being replaced by the bip! card, which is widely used by more than 2 million daily passengers using the train Chilean subway and in the Transantiago.
In Mexico, the Metro and Metrobús systems In Mexico City and Guadalajara use a similar system with a MIFARE base
In the city of Medellín, the collection of the mass transportation system (Metro de Medellín) operates through the use of the Cívica card, which is replacing the Edmonson ticket system, Cívica is being used extensively by more than 160,000 daily passengers since 2007 and is in its second year of implementation to have 500,000 trips by the end of 2008, all under a single electronic wallet and 100% personalized cards.
In Buenos Aires, Argentina, the concessionary company for the subway ("subte") has been operating a very similar card for years, the "Monedero", whose use extends not only to the city metro, but also to a railway line managed by the same operator (the Urquiza railway), several entrance tolls to the city, and an extensive network of shops.
The Argentine government, through Banco Nación, has launched a tender to generate a card similar to the Octopus or the Monedero, but for use in 100% of public transport in the city of Buenos Aires and surroundings. Its potential base is at least 10 million users.
Currently the Zaragoza bus service uses a payment system similar to Octopus.
Future developments
- The Dutch government has announced plans to introduce this method of payment in taxis. As of 2005, these plans have been deferred due to problems with the collection of tips.
- MTR has reached an agreement with the creator of the Shenzhen metro automatic charging system to make the Octopus cards compatible with this system, which would require the system to convert express rates in Renminbi, the Chinese currency, into hongkoneses dollars.
- The Madrid metro is preparing a similar system. Although they have not announced when it will be launched, there are already adapted cancelling machines.