Hong Kong – Octopus Card
The Octopus Card is an electronic smartcard ‘stored-value’ payment system that is available to Hong Kong residents and visitors. Launched in September 1997 it was originally designed as a means of paying for fares on the public transport system. However, over the years it has been expanded to include:
- Payments in retail outlets – fast food outlets, convenience stores, supermarkets and leisure facilities.
- Payments in car parks.
- Vending machine payments.
- Access to buildings.
- Personal identification.
As of January 2006 there are over 12 million cards in circulation and approximately 95% of the population (16–65) have cards. There are over 8.75 million transactions per day that generate annually HK$17.2 billion.
The size of a credit card, the Octopus Card is placed on the touch pads that are located at the entrance to the transportation system or near the cash tills in stores. The computer system recognises the card and deducts the appropriate payment. There are three types of cards available:
- On Loan Octopus: These cost HK$150 which comprises a HK$50 deposit (this is refundable on the return of the card) and HK$100 of stored value.
- Sold Octopus: This costs HK$70 and does not include any stored value. However, it is a special design that makes it a souvenir value.
- Airport Express Tourist Octopus: This costs HK$220/HK$300 and includes one/two single airport journeys as well as three days of unlimited travel on the MTR (metro/subway), stored value of HK$20 and a HK$50 deposit (this is refunded on the return of the card).
This is an example of how smartcard technology can be used to cover a variety of different types of transactions. Hong Kong is the closest that any region or country has moved towards a ‘cashless’ society.
Further information and copies of Press Releases visit www.octopuscards.com.
This chapter highlighted the relationship between technological and non-technological processes. Clearly there are benefits to both the B2B and B2C arenas by having efficient and effective processes. However, I would like to raise a concern. It is not an ethical one, nor is it a legal one. Simply it is a logistical one for the ordinary person in the street, the everyday shopper.
In highly developed nations we have become use to increased forms of security, especially in relation to financial services (banking) and purchasing goods and services (be it through physical stores or online). Originally security was usually based on one question – your mother’s maiden or non-married name. Since then a variety of security measures have been introduced. Clearly the use of ‘chip and pin’ systems is vital to protect individuals from fraudsters and hackers.
However, increasingly, especially on websites, we are now being required to register in order to view information/data. So, in order to gain information on either a product or service we have to enter another Username and Password. In some circumstances we also have to have a memorable place as well as a memorable date (but not our date of birth) and, indeed, our mother’s maiden name may be included as well.
Well we could always use the same, for example, Username and Password for everything we do – however, security industry experts advise against it. A fraudster would just have to find out that one Username, that one Password and your whole life would unravel before you. Indeed, identity theft has become big business in both the US and the UK for criminal gangs. Hence the increasing need for online encryption. This supplemented by the physical shredders used to destroy bank statements and the like before placing the remnants in the recycling bins that now adorn our streets.
These are necessary actions to be one step ahead of the criminals. I agree. However, there are three potential issues:
- Do we increasingly have to have Usernames and Passwords for websites where there are no financial transactions or memberships requirements (for example, a marketing association)?
- With their increasing use how do we begin to remember the myriad of PINS, Usernames and Passwords? It may be a challenge for the young to remember such details – but what about the current middle aged population (the 50+)? What about them as they get older – will they be able to remember so many codes? There are two interesting thoughts here. It is the people of my generation that created the Internet and World Wide Web. Moreover, as stated in the book, we are the wealth generators of the future. For it is the current 45-50+ generation that will have the spending power. The birth rate in highly developed nations is falling – but people are living longer and usually to a much higher standard of living than previous generations.
- There are companies that are already developing portable keypads that store all your vital information. You only need one code number to unlock your PINs, Usernames and Passwords for a variety of functions. Useful – but what if you lose it? Is there any form of back up? Should we store everything in a safe online or indeed physically in our home?
What do you think?
What do you think are the potential solutions?
What do you think could be the potential impact upon marketers – both positively and negatively?
Breen, T.T. (2005) The Marketplace of Revolution: How Consumer Politics Shaped American Independence. New York & Oxford: Oxford University Press.
This business history text focuses on the role of consumption in the building of America at the time of independence from the British Empire.