Goodbye FeliCa Octopus, save the last tap for me

In the 2019 Apple Pay Octopus saga one thing was clear: Octopus was living on borrowed time. On the eve of the Apple Pay Octopus launch I wrote:

Octopus Cards Limited (OCL) has been slow extending the service to include mobile. Instead of putting early effort into digital wallet support for Apple Pay/Google Pay/Samsung Pay, OCL wasted time and resources developing the niche Mobile SIM product which didn’t pan out. This lag coupled with the rise of AliPay and WeChat Pay QR Code payment empires put enormous pressure on OCL to do something…

With so much traffic and business from the mainland, OCL owner MTR is looking to add QR Code Open Loop transit support (paywalled link) at some point. There is also the pressure of creating a Greater Bay Area transit card, and pressure from credit cards and banks. Every player wants a piece of the action…MTR gates will eventually look like the ones in Guangzhou with PBOC/FeliCa/QR Code readers supporting Octopus, China T-Union, AliPay/WeChat Pay…At which point I say OCL doesn’t have a viable transit platform business anymore.

Mainland China dumped the MIFARE based Beijing and Shanghai cards for their own slower PBOC 2.3/3.0 China T-Union standard, I don’t think it’s a stretch to see the same thing happening to Hong Kong Octopus at some point…Supporters will undoubtably point out the technical merits of China using a single transit standard but that’s just a red herring. The deciding factors will be good old money and politics: is it more profitable to keep Octopus in place or junk it in favor of QR and China T-Union, and who benefits from it all?

Out of Time

I thought the success of Apple Pay Octopus bought it some time, but on August 28 the South China Morning Post published a story where OCL CEO Sunny Cheung says they will join the China T-Union initiative for seamless transit integration between Hong Kong and China. He to goes out of his way a few times to say how ‘old’ NFC technology is:

Cheung said internet users’ criticism of Octopus being a tech laggard died down in June after people were allowed to add their Octopus account to Apple Wallet on their iPhones. Cheung, who admitted he was stung by the criticism, regarded Octopus’ breakthrough on the iPhone as one of the best times of his stint with the company. “This was one of my biggest challenges,” he said. “The breakthrough helped refresh Octopus’ image even though it is still using NFC technology.”

From Hong Kong’s Octopus aims to spread tentacles with contactless card for paying fares in mainland China

I guess Sunny thinks that QR Codes are cutting edge. He is retiring and doesn’t have to deal with the fallout of his misguided OCL management or care about criticism anymore.

Octopus can certainly be ‘dual mode’ with separate NFC A + CYN China T-Union purse and NFC F + HKD Octopus purse in one card, if OCL comes up with a new card architecture. But that’s an expensive undertaking when mainland China has been ruthlessly weeding out all MIFARE and FeliCa transit cards and replacing them with the slower PBOC 2.0/3.0 China T-Union standard, aka the supermarket checkout spec. It’s only a matter of time before Octopus gets the same brain lobotomy.

There is also the plastic card issue business angle to consider. Read FeliCa Dude’s Octopus on iPhone 7 post paying special attention to the Octopus plastic card issue steps he outlines. I’m sure the Hong Kong powers that be don’t want that profitable franchise to stay with Sony forever. They will work to keep it local which is exactly what the China T-Union PBOC 2.0 spec allows OCL to do.

We all know at this point that ‘one country two systems’ is just an illusion. It may not come soon but as transit gates and store readers are gradually replaced with newer models over the next few years, those models will all have dual mode support. And when the time is ready, OCL will turn off FeliCa. Until then, enjoy it while it lasts.