Hong Kong should phase out Octopus cards to make way for truly competitive e-payment apps
I refer to the introduction of the O! ePay app that allows Octopus card users to transfer funds using their smartphones (“Octopus banking”, April 19). Despite the Octopus card company’s efforts at innovation – including offering the “Automatic Add Value Service” and the O! ePay app – I believe it is time for the city to start phasing out this 20th-century technology.
To transfer funds using the new app, users would have to take several steps to transfer money from the credit card to the Octopus cards, which have to be connected to smartphones through a technology known as near-field communication. Since Apple does not open near-field communication for O! ePay, iPhone users would need another Bluetooth device to transfer funds. I would be very surprised if this app could take off, given the much more convenient WeChat Wallet or Alipay. Even the Uber app has its own component for splitting fares.
It is estimated that Octopus cards facilitate over 13 million transactions worth nearly HK$150 million in Hong Kong every day. Only a small fraction of the transaction data was captured by Octopus. Imagine the countless business opportunities that could have been further generated if these 13 million daily transactions were conducted using smartphones that allow more sophisticated data mining and smarter advertising.
Despite the ubiquity of Octopus cards, the city still has 6.07 billion coins in circulation as of 2014, a nearly 20 per cent increase from 5.17 billion coins in 2009. The main obstacle to becoming truly cashless is, ironically, the monopoly of Octopus cards, which charge more transaction fees than small businesses are willing to pay. Only through competition among Apple Pay, Google Wallet, WeChat Wallet and Alipay could the fees for mobile payments be driven down to affordable levels. To make Hong Kong a truly cashless society, it’s time to start phasing out Octopus cards.
Simon Wang, Kowloon Tong