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The Octopus Credit cards Limited Information Technology Essay

Octopus Cards Limited is wholly managed by Octopus Holdings Small. The Octopus Credit cards is a contactless smartcard which can be used for open public transport as well as for others repayment and nonpayment software. The Octopus smartcard system premiered in Sept 1997. Octopus Credit cards system is typically the most popular smartcard system on the planet with an increase of than 95% market show in Hong Kong. Octopus Credit cards Limited has over 10m daily transactions and prices over HK$90m. On this discussion paper, the technology and creativeness technology adopted by the Octopus Cards limited in Hong Kong will be attended to.

Radical and Product innovation

Awareness of problem and identify Market needs

Being an international financial centre, Hong Kong has a well-developed and efficient public transport network. The increasing range of passengers has created a need and chance for transport operators to build up a more thorough ticketing system.

Ideas Era of Octopus Cards

In days gone by, aside from the use of coins for fare repayment, MTR used magnetic clear plastic credit cards technology for solitary journey and its stored value ticket. However, the magnetic vinyl credit cards only can be used in the MTR. In 1993 the MTR required the business lead in looking at its fare collection technology and it was discovered the contactless smartcard technology is the most likely program for future need. In 1994, MTR joined with other four major open public transport operators specifically, KCRC, KMB, Citybus and Hong Kong Yaumati Ferry (HKF) to form a jv company named Creative Star Limited (later as Octopus Cards Limited in 2002) to oversee the contactless smartcard system's development and execution. (Ref: Appendix I)

Octopus Technology-Product innovation

The Octopus Cards is created by Sony. It has a built-in IC chip and can communicate with different fare processors through the use of card reader/writer. Individual simply holds the Octopus Cards over a reader after reading a "Dong" audio, the right fare amount will be deducted from the cards automatically. The features of Octopus Cards are convenient and fast, secure and reliable, efficient and accurate, cost cutting down, contactless, multi-usage, easy reloading, and can be applied on discounts/loyalty programs.

The reasons for Octopus Credit cards success

Octopus cards fulfills the Cooper and Kleinschmidt (1991) three key factors for invention success: product unique feature, proficiency of predevelopment and market needs (Szeto R. & Cheng E. , "From Creative People to Innovative Organisations, 2010, Pg 157). The company also does indeed well on below:

Joint Endeavors with other-synergies effect

New technology is often high-risk and when the price tag on entry into a new market or the expense of a new product becomes too big, the stakes become too high for an individual company. (Szeto R. & Cheng E. , "From Creative Visitors to Innovative Organisations, 2010, Pg 135)

Use Co-operation strategies lead to the success of Octopus. When the MTR management developed the payment system, they co-operated with other transportation operators somewhat than home development of own payment system.

Another benefit from jv was widen the business network. Octopus system technology allows individuals to travel across multiple open public transport methods using one single card. With large system coverage and support for the public transportation operator, Octopus system becomes popular and increases fast acceptance to general public.

Identify the market needs and consumer tendencies.

In previous years, the buyer only may use visa or mastercard and EPS as an electronic payment tools. However the charge card and EPS cannot be used for small amount of payment. In addition the credit card issuer has to review the applicant credit status before approval. Octopus Cards can deal with these market loopholes.

Most of passengers are not eager to carry a lot of cash, with the good thing about Octopus Cards, it offers a convenient way to them. Using its security features, identical to store value card, the customers are definitely more willing to use Octopus Cards to buy small value things. Furthermore, the contactless design also provides convenience to passengers without withdrawing credit cards from wallets.

Innovation and multi utilization function

Octopus Cards IC chips can storage difference data. Because of this, octopus system can be widely used in transport, auto parking, retail, self applied service business, leisure facilities, moist markets, university and property gain access to control.

Current development business

Octopus Cards Limited is a recently formed company. The company has clear goal - "Continuously innovate and delight our customers". Its slogan is "Making Everyday Life Easier". Nowadays, 95% of Hong Kong folks have at least one Octopus Credit cards. The company focuses on on two types of customers: B2B (retail shops, KCR, MTR, etc) and B2C (public). The merchandise life circuit and market has appeared to reach maturity. To support the business enterprise, the Octopus Cards Limited has used customer diffusion to extend the customer basic.

In October 2005, Octopus Holdings Small formed three new subsidiaries to focus on non-payment business of Octopus, which include Octopus Rewards Small, Octopus International Assignments Small and Octopus China Investment Small. (Ref: Appendix II)

Non-payment Application

The Octopus Rewards Program is a type of loyalty programme. It allows customers to earn and redeem cash incentive, regardless of payment means. With this common program, participating merchants can provide tailor-made savings or special deals to their consumers with no any new rewards systems. Over 2. 3 million customers have documented for the program plus they can benefit from the benefits at over 20 participating retailers.

Incremental product

The Octopus Cards Limited broadens their source of income by targeting the business on Sold Octopus and Bank Issued Octopus and corporate and business custom-made octopus.

Sold Octopus Cards

The Sold octopus is a specially designed Octopus Credit cards, including key chains, ornaments, wristwatches and commemorative limited release cards, there's an Octopus to suit your lifestyle. For example: Hello Kitty Octopus Credit cards. Octopus Cards isn't just for the intended purpose of payment but also becomes some sort of fashion.

Bank Issued Octopus

Today most folks have registered the Auto Add Value Service (AAVS) to reload the Octopus Credit cards values. Octopus begins to cross over their products with Credit Card Company. For instance: Citibank Octopus Visa greeting card. The customer can enjoy both octopus compensation and mastercard benefit.

Octopus for corporation

The Octopus Company creates a compelling marketing tool with a Commercial Octopus, Corporate Little Octopus, or custom-made Octopus premium to improve the corporate image.

Process Innovation

In days gone by, Octopus system only can be utilized on large chain store, e. g. , Cafe De Coral or 7-Eleven etc. The Octopus Cards Limited doesn't have enough resources to broaden their business for some small stores or small company areas. The expensive installation and every month charges also create the hurdle for the tiny business to utilize their product. Lately, Octopus Cards Small appointed four Octopus providers: Loan company of China, Hang Seng Loan provider, PCCW, Union CHECK OUT Co. , Ltd. The providers can help lease the octopus reader with a much cheaper regular monthly fee.

Octopus Cards Limited can take benefit of the synergies result utilizing the durability of the providers to permeate all sections of retail industries faster.

Ideas recommendation for future opportunity

Incremental product

Resizing the Cards Reader

Octopus Cards Limited can redesign the current card reader. Octopus Cards consists of many design mini-Octopus Cards. However the size card reader and design stay unchanged. The company can design sleek size audience, support wireless and 3Generation network.

The slim size and 3Gs Octopus Credit cards Audience can apply in Charity Flag Day, Taxi fare payment or in Paper Hawker. Furthermore, it could be used on online shopping or Television shopping. The trim size card audience may also be installed in laptop and television set. The public may use the octopus cards reader at home to stay the repayment in future.

Multi Currencies Support

Octopus Cards can use some creative swiping techniques such as Dual Money Debit Card() strategy. People can use two types currency Hong Kong Money (HKD) or Renminbi (RMB). The Octopus Cards Small can partner with China Loan company to issue these kinds of Dual Currency Octopus Cards.

Cross over Product

The Octopus Credit cards Limited can cooperate with Mobile Company. Most individuals have cellular phone and Octopus Cards. Both of these things become necessary for Hong Kong People's lives. Cross product like the octopus mobile phone can be a future craze.

For the procedure innovation

Alliance with visa or mastercard company

Besides the product technology, Octopus system can sign up for alliance with Credit Card Company. As mastercard system with move forward technology and well-developed global network, sharing experience can enhance Octopus system to penetrate to global market easier.

Consultancy services

Octopus Cards Limited is successful and experienced company on smartcard technology. The company may use its knowledge to provide consultancy service abroad and to promote their technology and services for potential customer.

VIP membership card service

Nowadays, most people have over twelve of discount or VIP cards for various shops or restaurants. Transporting all of them around is impractical. Octopus can try to develop VIP or loyalty credit cards. In future, individuals can bring one Octopus Credit cards to take pleasure from shopping and VIP service. For the merchant, it could be easier to allow them to track the consumer usage and spending design.

Increase customer Satisfaction

Today Octopus holder can only check balance and transaction in Octopus Enquiry Machines at MTR channels, some 7-Eleven or Circle-K wall plug or PCCW eyesight device. To enhance the client needs, Octopus Greeting card can establish system for card user s to download the deal statement via the Internet. Furthermore, with the needs of global market and matter on security issues, the company should shorten the lost card processing time, say, from now 6 hours to real-time block credit card.


Innovation is the cornerstone of Octopus success. With a clear goal, Octopus Credit card becomes the most well-known development product. Product feature and the technology strategy both are essential for the business. In future, Octopus can utilize their competitive advantage and market leader position to formulate more creativeness ideas to make our lives easier.


Joint business shareholder of Octopus Holdings Limited

Source from: Octopus Holiding Limited

Corporate Structure of Octopus Holdings Limited

Source from: Octopus Holiding Limited

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