Smart Cards Success in Hong Kong

Writes Dan Gillmor from Hong Kong:

Octopus is easily the world’s most successful experiment to date in stored-value, electronic cash cards. Instead of pulling out bills and coins in subways, buses, fast-food restaurants and convenience stores, customers wave purses and wallets past devices that deduct dollars from their cards inside.

Octopus cards are the real thing when it comes to cash cards. They are equivalent to cash. You put value into them, spend it down and then replenish the money if you want to keep using it.

They’re like cash in another crucial way. If the user prefers, they are entirely anonymous — that is, not linked to any bank account or other personal information.

And they are a massive hit. More than 9 million have been issued, beyond saturation in a city of 6 million. (Many residents carry more than one, and tourists often buy them as well.) They’re used in about 7.5 million transactions each day, most of which are mass transit fares.

The mass transit companies here created the card. They collectively own Octopus Cards, with the subway system owning a majority, says Eric Tai, Octopus’ chief executive officer.

The reason just about everyone here uses the card is that just about everyone uses Hong Kong’s elaborate, excellent mass transit system. That was the key to success, Tai says — making the cards something that people would use regularly, even compulsively, without a second thought.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.