Hong Kong? Experience with the Octopus Card - PowerPoint PPT Presentation

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Hong Kong? Experience with the Octopus Card

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C Solution looking for a problem. C Expensive and inflexible. The ... Octopus in Off-Street Car Parks. Muhammad Wasim Raad. 20. Octopus Applications. Retail ... – PowerPoint PPT presentation

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Title: Hong Kong? Experience with the Octopus Card


1
Smart Cards ecommerce
2
Perceptions
Were C Solution looking for a problem C
Expensive and inflexible The breakthrough! C
Platform for new services C Cost-effective and
very flexible
2
Smart Cards ecommerce
3
Interface Trends
Platforms C Attended POS C Unattended POS C
Remote POS Interfaces C Contact C
Contactless C Combination
3
Smart cards ecommerce
4
Functionality
  • C Value management e.g. EMV, e-purse
  • C Identity or reputation management digital ID
  • locally or remotely

4
Smart Cards ecommerce
5
Key Attributes
C Secure (or economically secure) C Easy to
operate C Standards terminals, drivers,
specifications e.g. PKCS11, PC/SC, EMV,
CEPS C Portable
5
Smart Cards ecommerce
6
Multi Channel Access
6
Smart cards in ecommerce
7
Market Forecasts
Source Frost and Sullivan
7
Smart cards in ecommerce
8
Frost Sullivan - A Look at the Asian Pacific
Smart Card Market, 1999 and Beyond - by 2004,
Asia will command at least a quarter of the
revenue market shares worldwide, with China by
itself commanding nearly a third of market.
Frost Sullivan, - The Asian smart card market
will soar to new heights, especially in mainland
China where the technology is expected to
penetrate a slew of applications.
IDC, Industry Trends 02/12/00 - China "already
appears as the single most promising market for
the coming years".
8
Smart cards in ecommerce
9
The new card business
C One-to-One Past every smart card application
had to be lovingly hand crafted in assembler for
a specific chip and OS combination C
Many-to-Many future standard smart card apps
can be added or deleted, moved from one card to
another because the chips are running standard
multi-app OSs that any developer can write code
for.
9
Smart cards in ecommerce
10
New smart card Food Chain
C Chip manufacturer C Card fabricator C OS
provider C Application developers C Card Issuer
and designer and personaliser C Application
issuers C Application managers or service
providers C Card managers
10
Smart cards in ecommerce
11
Applications
Gemplus figures (Proton Report, Sept 2000)
11
Smart cards in ecommerce
13
Amex Blue
12
XII World Productivity Congress 2001
  • Heading for a Coinless Society with Octopus ?
  • Rob Noble
  • CEO Creative Star Ltd
  • 7th November 2001

13
Contents
  • Octopus Progress Todate
  • Future Projects Being Pursued
  • Hong Kong Becoming Coinless?

14
What Is The Octopus?
  • A pre-paid stored value card utilizing
    contactless smart card technology
  • Operates within wallet/purse for up to 10cm
  • Less than 1/3 second transaction time

15
Establishing the Octopus Card Base
  • 6.8M inhabitants living in high density corridors
  • Low car ownership (15)
  • Nearly 11 million public transport rides per day
  • Potential for one public transport card to reach
    all economically active people

16
Formation of Creative Star
  • In 1994 a joint venture company, Creative Star,
    was formed by the 5 major public transport
    operators
  • Octopus card launched in September 1997

17
Octopus Usage
  • Currently 97 of total Octopus transactions on
    public transport
  • Nearly 90 of railway passengers using Octopus
  • Some 80 service providers accepting Octopus
  • Now expanding further into private
    transport/non-transport

18
Octopus Applications
  • Public Transport and related
  • 3 railways, 6000 buses, ferries, Peak Tram,
    Tramways, public light bus
  • Car parks
  • Parking meters

19
Octopus in Off-Street Car Parks
20
Octopus Applications
  • Retail
  • Fast food
  • Cake shops
  • Convenience stores

21
Octopus Applications
  • Unattended businesses
  • Vending machines
  • Payphones at MTR
  • stations
  • Photocopiers

22
Octopus Applications
  • Recreational facilities
  • Public swimming pools
  • Racecourses
  • Non-payment service
  • Access Control for
  • residential estates
  • School Attendance

23
Add Value Service
  • Add value service available at
  • Ticket Offices/Customer Service Centres
  • Add Value Machines
  • Retail outlets which accept Octopus for payments
  • Maxims fast food and cake shops

24
Add Value Service (contd)
  • Automatic Add Value Service with banks
  • 250 added next use after 0 or negative value
  • Save queuing time for adding value
  • No worries about insufficient cash
  • Available at nine banks so far

25
Future Projects Being Pursued
  • Extend use of Octopus as access control device
  • Extend use of Octopus as identity card
  • Extend use of Octopus cards in schools
  • Introduce Octopus across the border in Shenzhen

26
Future Projects Being Pursued (contd)
  • Combined Octopus/hotel room key
  • Combined Octopus/credit card with AAVS
  • Octopus mobile phones and key fobs
  • Home personal readers for web micro-payments

27
Video Clips of Road Runner
  • Railway
  • Bus
  • Retail

28
Hong Kong Becoming Coinless?
  • Virtually everyone in Hong Kong has an Octopus
  • Already used extensively for public transport
  • Being readily adopted for private transport/
    unattended environments

29
Hong Kong Becoming Coinless? (contd)
  • Soon a critical mass of manned payment SPs and
    cardholders thinking of retail payments
  • CS pursuing many new Octopus projects

30
Hong Kong Becoming Coinless? (contd)
  • Big savings for operators if coinless
  • Virtuous circle, more SPs and fewer coins
  • Customers prefer Octopus to heavy, dirty,
    slower-transaction coins
  • Large productivity gains if electronic
    transactions replace physical coins

31
Hong Kong Becoming Coinless? (contd)
  • Coins been around for some 2500 years
  • Still some HK6b worth of coins circulating
  • Real chance world-leading Octopus can help Hong
    Kong to become first coinless city

32
Hong Kong Smart Cards
  • Octopus
  • 8 million cards, 9000 readers
  • 7 million transactions/day
  • Visacash
  • ComPass Visa (VME)
  • Mondex
  • GSM SIM
  • ePark

33
Octopus
  • Transaction time lt 300 milliseconds
  • Transaction fees HK0.02 0.75
  • 10 transaction costs 0.095 (0.95)
  • Applications
  • Transit
  • Telephones
  • Road tolls
  • Point-of-sale
  • Access control
  • Anonymous / personalized
  • How does money get to service providers?
  • Net settlement system operated by Creative Star

34
Entities of the E-payment System
Identification Card Issuer (Corporate or Service
Provider)
Purse Charger (Bank or third party)
  • Access Control/E-payment terminal
  • .Corporate secure Log in
  • .Retail POS
  • collecting Highway tax

Card Holder (User)
Corporate Information Center (Database)
35
Octopus System
SOURCE WORLD BANK
36
Smart Card Sales Leaders (2000)
VENDOR OF CARDS
SHARE Gemplus 185,000,000 29 Schlumberger 152
,000,000 24 Oberthur Smart Cards 85,000,000
14 Giesecke Devrient
76,000,000 12 Orga Card Systems 53,000,000
8 TOTAL 628,000,000
SOURCE CARDWEB.COM
37
Mondex Security
  • Active and dormant security software
  • Security methods constantly changing
  • ITSEC E6 level (military)
  • VTP (Value Transfer Protocol)
  • Globally unique card numbers
  • Globally unique transaction numbers
  • Challenge-response user identification
  • Digital signatures
  • MULTOS operating system
  • firewalls on the chip

38
Payment Cards
EMV EUROPAY INTL, MASTERCARD,VISA MPCOS
MULTI PAYMENT CHIP OPERATING SYSTEM
  • 8-128 Kb
  • Data rate 115 Kb/sec
  • ISO 7816 compliant
  • Visa-certified
  • PIN management and verification
  • 3DES algorithm for authentication, secure
    messaging
  • Epurse with payment command set (debit,credit,
    balance, floor limit management)

SOURCE GEMPLUS
39
Wireless Card Authorization
SOURCE SAMSUNG
40
Mondex
  • Smart-card-based, stored-value card (SVC)
  • Subsidiary of MasterCard
  • NatWest (National Westminister Bank, UK) et al.
  • Secret chip-to-chip transfer protocol
  • Value is not in strings alone must be on Mondex
    card
  • Loaded through ATM
  • ATM does not know transfer protocol connects
    with secure device at bank
  • Spending at merchants having a Mondex value
    transfer terminal

41
Mondex Components (Hitachi)
Electronic Cash Register
Cashless ATM
PCMCIA Reader/Writer
Key Fob Balance Reader
Electronic Wallet
SOURCE HITACHI
42
  • The National Bank of Kuwait (NBK) has launched
    the worlds first Visa internet-only payment
    card program in Kuwait city
  • Features of NBK card include preset
    spending limits, automatic insurance from
    NBK for all purchases using the card
  • .

43
Smart Cards Will Play an Important Role In
Ecommerce
  • Provide a secure storage for digital
    certificates and personal identification
  • Convenience-Multifunction Card like the JAVA
    Card and very portable
  • Log recent activities
  • Can Provide automatic Logins to designated
    websites without having to remember passwords
    and login procedures
  • Suitable for payment over the internet

44
Conclusion
  • Ecommerce will take off in Asia
  • Smart Card will play an important role in
    ecommerce
  • Security is an important issue and the smart
    card will add value to it
  • Ecommerce will go wireless
  • Asia has the highest growth rate of smart
    card usage in the world
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