Honey Tsang

China Daily (Hong Kong) - - 20TH ANNIVERSARY OF HKSAR -

In a fast-chang­ing world where tech­nol­ogy devel­op­ers scram­ble to cre­ate new soft­ware that makes life eas­ier, the old Oc­to­pus Card en­dures, amid the changes, as an es­sen­tial for peo­ple in Hong Kong.

It’s a re­mark­able achieve­ment for the vari­col­ored, elec­tronic stored-value card. Con­sider the apps that blos­som like lilies of the field, promis­ing to re­lieve pain or anx­i­ety, to im­prove sleep, men­tal fo­cus, or to mon­i­tor fit­ness. They ap­pear and dis­ap­pear, with the com­ing of the next bright idea.

The Oc­to­pus Card was in­tro­duced to Hong Kong in 1997, as the city re­turned to China, to trans­form the pat­tern of in­ter­ac­tions be­tween peo­ple and com­mer­cial en­ti­ties.

Sunny Che­ung Yiu-tong , chief ex­ec­u­tive of­fi­cer of Oc­to­pus Hold­ings Ltd, says it’s grat­i­fy­ing to see how Oc­to­pus has evolved as a ne­ces­sity for most of the city’s 7.37 mil­lion peo­ple.

Sit­ting in his of­fice, rain beat­ing against the win­dows, por­tend­ing an ap­proach­ing Sig­nal 8 trop­i­cal de­pres­sion, Che­ung smiled, re­count­ing the achieve­ments of Oc­to­pus that made him proud. Oc­to­pus, he said, has helped to put things in or­der in Hong Kong.

The idea of Oc­to­pus sprung in 1992 as a pos­si­ble al­ter­na­tive to the mag­netic-strip rail­way tick­ets that pas­sen­gers didn’t like.

Tech­ni­cians came up with Oc­to­pus’s sys­tem for col­lect­ing fares. It was more ef­fi­cient. On top of that it helped cur­tail coun­ter­feit tick­ets. The old sys­tem was easy to beat. The Mass Tran­sit Rail­way (MTR) was los­ing a for­tune, while coun­ter­feit­ers trav­eled free.

It took three years of re­search and de­vel­op­ment to come up with a re-us­able, stored value, smart card: Oc­to­pus. The card came on the mar­ket in Septem­ber 1997.

Within the first three months of launch, 3 mil­lion Oc­to­pus cards had been tucked into the wal­lets of con­sumers. Then it climbed to over 33 mil­lion now, 4.5 times the city’s to­tal pop­u­la­tion.

The co­he­sion

The era be­fore Oc­to­pus seems like the “olden days”, viewed from the per­spec­tive of to­day. Big, noisy bags of coins were stan­dard gear. And wait­ing was tor­tu­ous as those at the head of the queue, fas­tid­i­ously picked out tiny coins count­ing out the ex­act fare.

Che­ung, born i n 1954, worked at Far East Bank in the early 1970s. He was con­scious of coins and the in­her­ent nui­sance of in­ter­minable coin ex­changes and for a banker, the ad­di­tional tra­vail of load­ing coins in count­ing ma­chines.

In the 1980 s, be­fore the ad­vent of Oc­to­pus, KMB, the city’s largest bus op­er­a­tor, for in­stance, han­dled a bulky mass of 22 tons of coins ev­ery night.

“We wanted to break this lim­i­ta­tion, and to the great­est de­gree on pub­lic trans­port, tak­ing com­muters to their des­ti­na­tions, in the short­est amount of time,” said Che­ung.

MTR Cor­po­ra­tion Ltd, the driv­ing force be­hind the de­vel­op­ment of Oc­to­pus, in­vited the city’s four other pub­lic trans­port op­er­a­tors to join Oc­to­pus. Kowloon-Can­ton Rail­way Cor­po­ra­tion, KMB, Ci­ty­bus, and New World First Bus/Ferry Ser­vices Ltd signed up right away.

“In in­dus­try, we’re com­peti­tors. But we came to a co­he­sive choice, on ac­count of our com­mon de­sire to make peo­ple’s lives faster and bet­ter,” Che­ung said.

Speed things up

In to­day’s Hong Kong, there are 12.6 mil­lion pas­sen­ger jour­neys on var­i­ous modes of pub­lic trans­porta­tion daily. For 20 years, the city’s com­mu­ni­ties have learned to take the speed and ef­fi­ciency for granted, us­ing just a tap of the card on Oc­to­pus reader de­vices.

The nearly in­stan­ta­neous pay­ment sys­tem takes 0.3 sec­onds. The Oc­to­pus Card uses Ra­dio Fre­quency Iden­ti­fi­ca­tion (RFID), trans­mit­ting data by ra­dio waves, from the chip on the card, to a re­ceiver at speeds up to 212 kbit per sec­ond.

Che­ung de­scribed the speed as “un­par­al­leled”, com­pared with the five sec­onds, re­quired for data trans­mis­sion at 9.6 kbit/s, for other smart card sys­tems like Mon­dex, ap­pli­ca­ble on MasterCard.

“With this speed, the ex­ten­si­bil­ity of the card’s us­age is huge,” Che­ung said, elu­ci­dat­ing how Oc­to­pus ser­vices have ex­panded ex­po­nen­tially over the years.

In April 2000, the Hong Kong Mon­e­tary Au­thor­ity granted Oc­to­pus Hold­ings de­posit­tak­ing com­pany au­tho­riza­tion. Since then, the smart card has been able to flex its mus­cles on var­i­ous sec­tors. It was first ap­pli­ca­ble in con­ve­nience stores, later ex­tended to fast food out­lets, schools, vend­ing ma­chines, and so on.

Nowa­days, over 14 mil­lion oc­to­pus trans­ac­tions, val­ued at over HK$189 mil­lion, are pro­cessed daily. The city has 76,000 read­ers uti­lized by more than 9,000 Oc­to­pus ser­vice providers.

“With such vast amounts of data and pay­ment run by Oc­to­pus cards ev­ery day, we have to be par­tic­u­larly cau­tious, heed­ful of pos­si­ble er­rors,” he said, adding: “A small mis­take can wind up with a huge af­ter­math.”

With such vast amounts of data and pay­ment run by Oc­to­pus cards ev­ery day, we have to be par­tic­u­larly cau­tious, heed­ful of pos­si­ble er­rors. A small mis­take can wind up with a huge af­ter­math.”

Sunny Che­ung Yiu-tong, CEO, Oc­to­pus Hold­ings Ltd

Data pri­vacy con­cern

In the past two decades, the com­pany has recorded ma­jor achieve­ments, though it hadn’t come off without a few glitches.

There was a pri­vacy breach back in 2010 that shook up the com­pany, when card hold­ers be­came in­censed, upon the dis­clo­sure that the per­sonal data of 1.97 mil­lion users was sold for profit to com­mer­cial in­ter­ests.

“It’s a les­son we learnt in a painful way,” Che­ung said of the in­ci­dent and its ef­fect on the firm.

Che­ung be­came CEO a few months after the breach was ex­posed. His prin­ci­pal duty was to undo the sham­bles, He added. “At that time, I de­ployed max­i­mum manpower and re­sources to safe­guard users’ per­sonal in­for­ma­tion. We went all out to straighten out the ear- lier mis­take.”

Oc­to­pus, un­der Che­ung’s man­age­ment, has turned to col­lect­ing min­i­mum amount of per­sonal data from users. The firm shuns am­bigu­ous terms in its li­cense agree­ments that might be mis­in­ter­preted by users.

“I have to re­as­sure users their data is stored safely and con­scionably un­der our sys­tem,” he stressed.

Let in bloom

Twenty years is not too long nor too short, Che­ung said. Up to now, it still gives him a rush when struck by data show­ing that 99 per­cent of Hong Kong’s pop­u­la­tion, aged 15-64, have at least one Oc­to­pus card.

Oc­to­pus is a “sus­tain­able”, “time­less” tech­nol­ogy, in his words. Since tak­ing charge of the firm, he has set about crack- ing new sec­tors. He hopes the smart card will pen­e­trate the very fab­ric of the com­mu­nity.

There’s been some head­way. Shop­pers can buy gro­ceries, with a sim­ple tap in All­mart wet mar­ket in Tse­ung Kwan O. The firm’s CEO as­pires to branch out the ser­vice into more wet mar­kets.

The card’s colos­sal client base still is a heavy weight on Che­ung’s shoul­ders, but he main­tains his unas­sum­ing mien. He’s tak­ing on the even greater chal­lenge of ex­tend­ing Oc­to­pus to cross-boundary trav­el­ers.

In 2012, Oc­to­pus and Ling­nan Pass en­tered a joint ven­ture, of­fer­ing main­land trav­el­ers easy pas­sage be­tween Hong Kong and Guang­dong province. In 2014, Oc­to­pus ser­vice be­came avail­able in Ma­cao. Che­ung said more cross-boundary col­lab­o­ra­tion in trans­porta­tion is ex­pected, due to stronger busi­ness ties be­tween Hong Kong and the Chi­nese main­land.

Be­tween 1997 and 2017, there has been a ten­fold in­crease in Oc­to­pus cards in cir­cu­la­tion in the city. Che­ung ad­mit­ted he and his team had never ex­pected it to grow so big.

“If you want a city to thrive, you have to leave it to de­velop at its own pace. What we have to do is to ob­serve the par­tic­u­lar things that stand out from the day-to-day pat­tern, and to give those fuel to pick up steam.”

That is Che­ung’s mantra, which is ex­actly how Oc­to­pus card blooms, on the pref­er­ences of its users.

Con­tact the writer at hon­eyt­sang @chi­nadai­lyhk.com


Sunny Che­ung Yiu-tong, chief ex­ec­u­tive of­fi­cer of Oc­to­pus Hold­ings Ltd, said it’s grat­i­fy­ing to see how Oc­to­pus has evolved as a ne­ces­sity for most of the city’s 7.37 mil­lion peo­ple.

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