Octopus CEO Eric Tai explains how Hong Kong "smart card" technology is making lives easier for commuters around the globe

With nearly 9 million transactions a day and over 11 million cards in circulation, Hong Kong's contactless smart card operator, Octopus Cards Limited, is indisputably the world's number one electronic payment system operator and smart card issuer.

 

Nearly everyone in Hong Kong has one or more of the Sony-made rechargeable, multi-application cards, which have a 96 per cent penetration rate amongst the 16-65 age group. The contactless smart card can be passed over a reader to ride on almost every train, bus or ferry, for retail transactions and parking - transforming Hong Kong into a practically cashless society. The card can also be used to access schools, office buildings and housing estates.  

 

"Hong Kong is the showroom to the world on how we can successfully make the contactless payment system work," said Octopus Cards Limited chief executive officer Eric Tai.  Delegations from around the world come to check out the Octopus system and to understand the complexity and requirements for implementing a similar system.

 

Hong Kong expertise in demand

 

Octopus Card Limited is a prime example of a successful Hong Kong company taking its unique brand of operational expertise and technology to global markets. It acts as an international consultant to many overseas businesses especially those in the transport sector. The London Underground and London buses are clients. Two years ago, Octopus clinched a deal to replicate its contactless smart card technology for the rail, bus and tram systems in the Netherlands. It is tendering for deals in Melbourne and Toronto and is in "heavy discussion" with Shenzhen parties. It is also eyeing opportunities in Switzerland, North America and the Asia region.

 

Mr Tai said the success of the Octopus card lies in its convenience and simplicity. "We make a difference to people's lives. We make everyday life simpler, easier and more convenient. Very few companies have such a universal impact," he said. The contactless card takes only 0.3 seconds to register a payment.

 

Such is its mass appeal that one of the first things a tourist gets on entering Hong Kong is the Octopus card. "Every regional business tourist has one; most Chinese mainland tourists take it home as a souvenir," added Mr Tai.

 

Sky's the limit

 

When Octopus Cards Limited was formed by a group of Hong Kong transport operators in 1994, it had a vision of using a single smart card for all modes of transport. An Australian company was contracted to do the work using technology derived from Sony, Japan. Technical knowledge was also gleaned from other shareholders such as the Mass Transit Railway and the Kowloon Canton Railway Corporation. The result was the launch of the reusable, bio-gradable Octopus card in 1997. Over 3 million cards were sold in the first three months.  

 

Mr Tai said the sky's the limit for the Octopus card.  "A technology that can handle nearly 9 million transactions a day is big business. Growth in the non-core business like retail business grew between 20 to 30 per cent last year so obviously we will look for more opportunities in this sector. Our smart card system is admired the world over and with our expertise and experience, I am convinced there will be more opportunities in overseas markets."

 

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Octopus Cards Limited