During 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:
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)…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.
I hoped the success of Apple Pay Octopus would buy it 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 in the interview 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.”Hong Kong’s Octopus aims to spread tentacles with contactless card for paying fares in mainland China
Obviously Sunny thinks that QR Codes are cutting edge. He is retiring and doesn’t care about criticism of his disastrous OCL tenure, or scalping inbound tourists who want to use Apple Pay Octopus.
China has ruthlessly weeded out MIFARE and FeliCa transit cards and replaced them with the slower PBOC 2.0/3.0 China T-Union standard, aka the supermarket checkout spec. Octopus will eventually get the same China T-Union lobotomy.
Doing so means OCL and China transit authorities can replace the Sold Octopus•Lingnan Pass that is plastic only and covers 20 Greater Bay Area cities. If OCL went deep instead of cheap Octopus would go ‘dual mode’: a single card with separate NFC protocols and currency purses: NFC-A/China T-Union RMB and NFC-F/Octopus HKD. In this scenario Hong Kong Octopus remains on FeliCa with the rest of China on PBOC China T-Union.
Unfortunately OCL will likely go cheap instead of deep…. a single protocol China T-Union PBOC 2.0/3.0 card that works everywhere, and on mobile, for all mainland transit and for mainlander transit in Hong Kong. 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 that he outlines. The Hong Kong powers that be would like that profitable franchise sourced locally or in mainland and not from Sony.
‘One country two systems’ was an illusion, Hong Kong is being force fitted into China. Nothing is sacred, there are no hold outs. It may take a few years, but as MTR transit gates and OCL store readers are gradually replaced with newer models, those readers will all have dual mode FeliCa/PBOC support. And when everything is ready, MTR and OCL will simply turn off FeliCa. FeliCa based Octopus has had a great run that influenced transit fare system development around the world. Enjoy it while it lasts.
Jason Tjong tweeted that a dual protocol mode Octopus card is in final testing stages. It will be interesting to see the hardware and card architecture details. Hard to say what it is at this point, Sold Octopus•Lingnan Pass replacement, Greater Bay Area transit card, the new Octopus? A transition step away from FeliCa though a digital wallet version seems unlikely at get-go nevertheless.