Octopus card

Octopus Service Point at MTR Lam Tin Station

In order to enhance the level of security and technology, Octopus company launched "replacement of First Generation On-Loan Octopus" programme in 2015.

First Generation cards have no bracket in their card number. On successful transactions with first generation cards, the card reader will emit a "Do" sound three times to remind cardholders to replace their cards.

In 2015, at the initial stage, card holders of first generation cardholders may voluntarily replace their cards at an Octopus Service Point without charge.[13] In 2017, the final call on card replacements was launched by Octopus company. First generation cards will be unusable by stages starting from January 2018. Cardholders can replace these cards without charge at MTR or KMB Customer Service Centres, and Octopus Service Points.[14]

Octopus card reader of a self-payment kiosk at a McDonald's restaurant in Hong Kong

Making or recording a payment using the card for public transport or purchases at Octopus-enabled retailers can be done by holding the card against or waving it over an Octopus card reader from up to a few centimetres away. The reader will acknowledge payment by emitting a beep, and displaying the amount deducted and the remaining balance of the card.[26] Standard transaction time for readers used for public transport is 0.3 seconds, while that of readers used for retailers is 1 second.[27] When using the MTR heavy rail system, the entry point of commuters is noted when a passenger enters, and the appropriate amount based on distance traveled will be deducted when the users validate their cards again at the exit point.

The MTR usually charges less for journeys made using an Octopus card instead of conventional single-journey tickets. For example, the adult fare of a single journey from Chai Wan to Tung Chung is HK$25.7 with an Octopus card, and HK$28.5 with a single journey ticket.[28] Other public transport operators also offer intermittent discounts for using Octopus cards on higher fares and round-trip transits on select routes.[29]

On 6 November 2005, Octopus Cards Limited launched Octopus Rewards, a program that allows cardholders to earn rewards at merchants that are partners in the program. Participating merchants provide consumers with tailor-made offers and privileges.[30] The rewards that the program offers are in the form of points, or reward dollars, stored on the card. Once a card is registered for the program, the cardholder may accumulate reward points by making purchases at participating merchants, and payments may be made in the form of cash, credit cards, or Octopus cards themselves.[31] The rate at which reward points are earned per dollar-amount purchase differs by the merchant at which that the purchases are made. At Wellcome, for example, one point is earned for every purchase of HK$200;[32] and at Watsons, points are earned at a rate of 0.5 percent per dollar amount of a purchase.[33] Once these reward dollars are accumulated, they may be redeemed as payment for purchases at partner merchants for at least HK$1 per reward dollar. To redeem the accumulated reward dollars, cardholders must use the entire value amount in whole, and may not elect to use it partially. If the purchase price is lower than the amount of reward dollars available, the amount difference remains stored on the card.[34] Founding partners for the Octopus Rewards program include HSBC, UA Cinemas and Wellcome.[35]

Although taxis in Hong Kong are a popular form of transport, not all accept the Octopus card. On 27 June 2006, after 10 years of negotiations between Octopus Cards Limited and the taxi industry, the first trial of taxis equipped with Octopus card readers was launched in the New Territories with taxis operated by the Yellow Taxi Group.[36] But it was reported on 30 October that of the 20 taxis that participated in the trial, eight had dropped out. Part of the reason was technical – drivers must return to the office every day for accounting. The Octopus card company said it would be upgrading the system to allow automatic account updating in the future.[37] Wong Yu-ting, managing director of the Yellow Taxi Group, also noted that they had been "trying to convince restaurants and retailers" to offer discounts to Octopus taxi passengers, but the Transport Department had been a major obstacle. The Transport Department is against this approach for legal reasons, as taxi fare discount is illegal in Hong Kong.[37] Also, other than taxi corporation overseas, most drivers are self-employed. They and their taxi owner prefer to account their profit and rent in daily basis, while Octopus requires to transfer money through bank after a working day. Plus, installation and service fee are also their concerns.[38]

In 2018, Octopus Cards Limited announced its plans to re-enter the taxi payment market with their new mobile app for taxi drivers. The mobile app is able to receive funds by tapping the passenger's Octopus card to the device's NFC reader, or by allowing passengers to scan the O! ePay driver QR-code.[39]

Usage of the Octopus card was extended to Macau and the Chinese city of Shenzhen in 2006. In collaboration with China UnionPay, Octopus Cards Limited introduced Octopus card usage to two Fairwood restaurants in Shenzhen in August 2006.[40] In 2008, five Café de Coral locations in Shenzhen also started accepting Octopus.[41] Value cannot be reloaded to Octopus cards in Shenzhen, but the Automatic Add Value Service is available to automatically deduct money value from a customer's credit card to reload an Octopus card. The two Fairwood restaurants in Shenzhen that were enabled for Octopus card payments are located at Luohu Commercial City and Shenzhen railway station.[40] Shenzhen became the first city outside Hong Kong in which Octopus cards may be accepted as payment. In Macau, the Octopus card was introduced in December 2006 when two Kentucky Fried Chicken restaurants in the territory adopted its usage as payment. Similar to its usage in Shenzhen, an Octopus card may not be reloaded in Macau, and the currency exchange rate between the Macanese pataca and the Hong Kong dollar when using an Octopus card is MOP1:HKD1.[42] The two Kentucky Fried Chicken restaurants in Macau that adopted the Octopus card for payment are located at the Rua Do Campo and the Sands Casino.[42]

Shenzhen Tong cards are now widely used in Shenzhen instead, and a combined Shenzhen Tong – Hong Kong Octopus card is available, called the Hu Tong Xing, with RMB & HKD in different purses.[43] The Macau Pass is now widely used in Macau.

Enquiry machines are available in all MTR station and Octopus Service Point in some MTR station. Place any Octopus products on these machines which display the balance along with a history of last ten usages. Card users may also check the balance and last 3-month transactions on mobile with Octopus app. For some Octopus products, like the 20th Anniversary Special Edition, up to 40 transactions can be checked on the app. After each payment, the remaining value and cash deducted are also shown on the card reader as well as the receipt.

Money can be credited to the card through a number of ways. In general, all cards can top-up in multiples of HK$50. As for Elder cards, Personalised Octopus Cards with "Student" or "Person with Disabilities" identity, these cards can be topped-up in multiples of HK$10, but this has to be done at MTR Customer Service Centre only.

"Add Value Machines" are installed at all MTR stations and they accept cash only.[44] Alternatively, cards may be topped up with cash at authorised service providers such as PARKnSHOP, Wellcome, Watsons, 7-Eleven, Circle K, and Café de Coral, and also at customer service centres and ticketing offices at transport stations.[45]

In selected store, change can also be put into Octopus card after a cash payment.[46] Other than that, a large number of spare coins can also be added into Octopus card on "Coin Carts", a vehicle operated by Hong Kong Monetary Authority.[47]

The Octopus "Automatic Add Value Service" (AAVS) is an automatic top-up Octopus method. This service allows for money to be automatically deducted from a credit card and credited to an Octopus card when the value of the Octopus card is less than zero. The credit card used must be one offered by one of 22 financial institutions that participate in AAVS.[48] Participating banks include HSBC, Bank of China, and Hang Seng Bank. Depend on applicants' default, HK$150/250/500 is added to the card each time value is automatically added.

The "O! ePay" mobile wallets, which is also run by Octopus company, also allows users to transfer money between itself and Octopus cards. The transfer amount can be down to 10 cents.

An Octopus card may store a maximum value of HK$3,000,[49] with an On-Loan card having an initial deposit value of HK$50 and a Sold card having no initial deposit value. Negative value is incurred on a card if it is used with insufficient funds – both types of cards may carry a maximum negative value of HK$35 or HK$50(depends on card issue date) before value needs to be added to them again for use.[50] At the time, the maximum cost of a trip on any of the rail networks except the Airport Express and first class of the MTR East Rail line was HK$34.8, the cost of travelling between East Tsim Sha Tsui Station and Lo Wu Station;[51][52] the current maximum cost is HK$55.3, the cost of travelling between Disneyland Resort Station and either Lo Wu Station or Lok Ma Chau Station.

An Octopus card may be returned to any MTR Customer Service Centre for a refund of the remaining credit stored on it. A handling fee may be charged for the refund – HK$11 for an anonymous On-Loan card that had been in use for fewer than 90 days, and HK$10 for a Personalised On-Loan card that was issued on or after 1 November 2004. A refund is immediately provided at the time an anonymous On Loan card is returned, unless it has more than HK$500 stored on it. A Personalised On-Loan card or an anonymous On-Loan card with more than HK$500 stored on it needs to be sent back to Octopus Cards Limited for refund processing, in which case, the refund for a Personalised On-Loan card would be available in eight days, and that of an anonymous On-Loan card would be available in five days. If a damaged On-Loan card is returned for refund, a HK$30 levy would be charged to the cardholder.[53]

On-Loan cards are issued for usage in day-to-day functions, primarily for fare payment in transport systems. They are further classified into Child, Adult, Elder, and Personalised categories, with the first three based on age and different amounts of fare concession.[54] With the exception of the Personalised cards, On-Loan cards are anonymous; no personal information, bank account, or credit card details are stored on the card,[55] and no identification is required for the purchase of these cards. If an owner loses a card, only the stored value and the deposit of the card are lost. On-Loan Octopus cards may be purchased at all MTR stations, the KMB Customer Service Centre, New World First Ferry (NWFF) Octopus Service Centres, and the New World First Bus (NWFB) Customer Service Centre.[56] A student on-loan Octopus Card was initially issued, but was discontinued in 2005.[57]

The Personalised card is available on registration. The name and, if opted, a photo of the holder are imprinted on the cards. They can function automatically as a Child, Adult, or Elder card by recognising the cardholder's age stored on the card, hence accounting for different concessionary fares. As of 2003, there were 380,000 holders of Personalised Octopus cards.[59] In addition to all the functions of an ordinary card, this card can be used as a key card for access to residential and office buildings.[23] If a Personalised card is lost, the holder may report the loss by phone or on the web to prevent unauthorised use of the card. A refund or a new personalised card, depend on holder choice, will then be mailed to the holder of the card. The refund contains the deposit and the value that remained on the card three hours after the loss is reported, minus a HK$30 card cost and a HK$20 handling fee.[60]

Schools in Hong Kong can use the Octopus card to record student attendance.

A Personalised card with "student status" is available for students in Hong Kong. To be eligible for this card, the applicant must be a full-time Hong Kong student aged between 12 and 25.[61] This type of Personalised card is automatically issued to a student who applies for student concessionary privileges. Additionally, they can be used for school administrative tasks such as the recording of student attendance and the management of library loans.[24]

In contrast to On-Loan cards, Sold cards are sponsored and branded cards.[62] They are souvenir cards that are frequently released by Octopus Cards Limited. The designs for these cards usually come from fictional characters in popular culture, or they are inspired by Chinese cultural events such as Chinese New Year. These cards are sold at a premium, have limited or no initial stored value, and cannot be refunded, but they can otherwise be used as ordinary cards. An example of the Sold card is the McMug and McDull collection. It was launched at the end of January 2007 to coincide with the beginning of the Year of the Pig, it features two differently designed versions of the card and is sold for HK$138 per set. Each set comes with an Adult Octopus card, with a pouch for the card, a matching strap and a Mcmug or Mcdull ornament.[63] Octopus Cards Limited has launched new collections of these cards for such occasions as the Mid-Autumn Festival, the passing of the year 2004, and the release of the movie DragonBlade. Sold Octopus cards may be purchased at selected MTR stations, and all 7-Eleven stores.[56]

Other than the Octopus card itself, operator Octopus Cards Limited also sells watches and mobile phone covers that function as anonymous Octopus cards. The types of watches available include wrist watches, pocket watches, and watch key chains. The mobile phone covers were specifically designed for Nokia models 3310 and 3330, and iPhone 4 and 4S.[64] As with the card itself, these products are used by waving them over a card reader. They may be reloaded with money value the same way as the card itself, including automatic reloading via the Automatic Add Value Service, with the exception that they cannot be reloaded at Add Value Machines due to their shapes.[65] An Octopus watch or mobile phone cover may be stored with a maximum of HK$3,000, but do not have any initial stored value at the time of its purchase. It may have a maximum negative value of HK$35 as with an Octopus card.[64] These products are not refundable for their costs, but the remaining value stored on them may be refunded if they are damaged, with the damaged product itself also returned to the customer.[65]

In June 2007, a new set of limited edition products was announced, featuring Mini Octopus cards and Child Octopus Wristbands. The Mini Octopus cards, available in Adult and Elder editions, measure 4.7 cm by 3 cm (1.85 in by 1.18 in) and work as regular (anonymous) Adult and Elder, respectively, Octopus cards. The Child Octopus Wristbands are plastic wristbands with a watch-like round face and work as regular Child Octopus cards.[66] The same value-adding abilities and limitations as the aforementioned watches and mobile phone apply.

The special-purpose card, Airport Express Tourist Octopus, was introduced by Octopus Cards Limited to target tourists in Hong Kong. Two versions of this card are offered, a HK$250 card with a free single ride on the Airport Express, the Mass Transit Railway (MTR) train line that runs between the Hong Kong International Airport and the urban areas of Hong Kong, and a HK$350 card with two free single rides included. The airport journeys are valid for 180 days from the date of purchase. Both versions allow three days of unlimited rides on the MTR and include a HK$50 refundable deposit. Usable value on these cards may be added if necessary. These tourist Octopus cards may be used only by tourists staying in Hong Kong for 14 or fewer days; users may be required to produce a passport showing their arrival date in Hong Kong. Airport Express Tourist Octopus is available for purchase at all MTR stations.[67]

The other special-purpose card, the MTR Airport Staff Octopus, is available for the staff of Hong Kong International Airport and AsiaWorld-Expo, a convention centre close to the airport, for commuting at a reduced fare between the airport and MTR stations via the Airport Express. Staff who apply for the card may use it for a discount of up to 64 percent for Airport Express single journey fares.[68] The MTR Airport Staff Octopus is available upon application via the company for which that a staff member works.[69]

Some local banks in Hong Kong have integrated the Octopus Card into their ATM cards and credit cards.[70]

Since 14 December 2017, the cardless Octopus, named "Smart Octopus", is available with Samsung Pay, a mobile payment platform provided by Samsung. By using the phone's NFC function and magnetic secure transmission (MST) technology, users can tap their selected Samsung devices on Octopus readers, paying in a similar way as a normal physical Octopus cards.

Users can choose to transfer their card data from an existing anonymous On-Loan Adult or Elder Octopus to the Smart Octopus. All card value and reward points would be transferred and held in the Samsung Pay app. However, the physical card will then be deactivated and can no longer be used. Users can also choose to purchase a new Adult or Elder Smart Octopus in the app.

Smart Octopus provides features like instant transaction notification and in-app top-up function, that were not available originally when using a physical card. Yet, such in-app top-up method will charge 2.5% as handling fee.[71][72][73]

Virtual Octopus is currently only available with Samsung Pay via Smart Octopus. Apple Pay integration is expected in iOS 13 to be released in autumn 2019, as developers found code associating Octopus integration with Apple Pay.[74] On 11 July 2019, it was announced that Octopus would be coming to iPhone and Apple Watch in late 2019. (But later postone to 2020.)[75] Details on the features and availability have not been released, but it is expected that the card will take advantage of Apple Pay's Express Transit function. This allows payments to be made from the iPhone or Apple Watch without needing to switch on the phone or authenticating the payment with Face ID, Touch ID, or a password.

The Octopus card uses encryption for all airborne communication and performs mutual authentication between the card and reader based on the ISO 9798-2 three-pass mutual authentication protocol.[82] In other words, data communications are only established when the card and reader have mutually authenticated based on a shared secret access key. This means that the security of the Octopus card system would be jeopardized should the access key be exposed. A stolen Octopus card reader could be used with stolen Octopus software, for example, to add value (up to HK$3,000) to any Octopus card without authorization.[83] Nevertheless, as of 2003, the Octopus card and system had never been hacked.[84]

Octopus card reader includes a fail-safe that prevents reader from initiating transaction when more than one card is being detected at the same time. On 11 February 2009, Sing Tao Daily reported that the fail-safe has been abused for fare evasion through the railway station turnstile. A large number of dishonest mainland Chinese passengers at Sheung Shui Station and Lo Wu Station were stacking up 4 or more cards before breaking through the turnstile, pretending their cards have been touched with the reader correctly but triggering the fail-safe deliberately to avoid card value deduction. Because of this, if they get caught by the station staff, they can make an excuse of a hardware malfunction and offer the Octopus card with an unsuccessful transaction.[85]

In February 2007 it was found that when customers added value to their cards at self-service add-value points located in MTR and Light rail stations, their bank accounts were debited even if the transactions had been cancelled.[94] Octopus Cards Limited claimed that the fault was due to an upgrade of communication systems. Initially, two cases were reported. The company then announced that the use of the payment system, Electronic Payment Services (EPS), at add-value service points would be suspended until further notice, and that it had started an investigation into the reasons for the problem.[95]

On 27 July 2007 it was announced that the faulty transactions could be traced back to 2000, and that a total of 3.7 million Hong Kong dollars had been wrongly deducted in 15,270 cases. The company reported that there might be cases dating to before 2000, but that only transactions from the past seven years were kept. The company stated that it would co-operate with EPS Company Limited, operator of Electronic Payment Services, and banks, to contact customers involved and arrange a refund within ten weeks' time.[96]

On 21 December 2007 the company announced that it would permanently cease all transactions using EPS because it could not guarantee that such problems would not occur again.[97]

On 15 July 2010, despite Octopus' claims to have never sold data, a former employee of the China insurance company claimed China purchased records for 2.4 million Octopus users.[98] On 20 July, Octopus acknowledged selling customers' personal details to Cigna and CPP, and started an internal review of their data practices.[99] Octopus Holdings made 44 million Hong Kong dollars ($5.7M USD) over 4.5 years.[100] Roderick Woo Bun, Hong Kong's Privacy Commissioner for Personal Data, gave radio interviews and called for transparent investigation, but his term expired at the end of July 2010.[99] Allan Chiang Yam-wang was announced as the incoming Privacy Commissioner. This news was met with protests and international outrage, due to his prior history of privacy invasions involving cameras used to spy on his employees at the Post Office, and disclosing hundreds of job applicants' personal data to corporations.[101] Outgoing Privacy Commissioner Woo pledged to finish a preliminary report on the Octopus privacy abuse before his term ends, and called for a new law making it a criminal offence for companies to sell personal data.[102]

As NFC and cardless payment are more popular in mainland China, some opinions question the slow technology development of Octopus company. Among these commentaries, some suggest market monopoly and government attitude to Octopus company are the contributing factor, as the social transportation subsidies are solely through Octopus system.[103] Octopus company CEO Sunny Cheung reassured that new technology would be launched in short period of time, such as QR code payment, integration of Octopus card with Samsung Pay and Peer-to-peer lending.[38]