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 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.