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LBS & tourism through the eyes of a postgrad marketing student in New Zealand.

Tuesday, March 15, 2005

More about contactless payment

I just scrolled down here a little bit and saw another post about contactless payments, fun! I have something to add to that, too.

The Octopus Card has been in use in Hong Kong for some time now, and it's something no traveller to the city should be without. Here is a useful blurb - I've picked out the more important bits below:
Octopus cards were developed as an automatic fare collection (AFC) scheme for Hong Kong’s transit system. This contactless smart card ticketing system currently includes over 100 service providers, including all of the major transport operators. The use of the card has shortened queues at ticket barriers, because the card doesn't have to be taken out of a bag or wallet — customers can just wave it past a scanner at a distance of several centimeters.
...
Nokia has launched a cover for one of their mobile phones that includes an embedded Octopus chip and antenna, enabling commuters to use their phone to make Octopus payments.

While Octopus cards are anonymous by default, over 500,000 personalized cards have been issued and are used for the Octopus Automatic Add-Value Service. Twelve Hong Kong banks and one credit card company support the automatic add-value service. Because each personalized card has a unique identification number, up to 40,000 cards are also being used as security passes at housing estates, for staff identification cards, and as loyalty cards.
...
Travelers have found that the card provides increased convenience, allowing them to pass through fare collection points 15 to 20% faster, according to Octopus card statistics. The scheme has succeeded because it offers real convenience to cardholders.
Dear Nokia (and Motorola, etc): why not go one step further and actually embed the Octopus chip & antenna into the phone itself, not just the cover? I think that the way of the future in terms of mobile-payments is not via SMS but Octopus card-like contactless technologies. Carriers will hate the idea because they don't profit from it (since it bypasses their network, rather like Bluetooth), meaning that consumers will love it for the very same reason.

For example, take the new 'txt to park' Auckland parking meters. Not only do you have to pay 50c when you SMS Vodafone or insert your credit card to pay for parking, a One News story illustrated just how bewildering the machines were to most of the public, with most just staring blankly at the machine for an extended period of time.

Now imagine you're in Hong Kong - just wave your Octopus card over the parking meter, and your ticket pops out. No extra fees because it doesn't go through your mobile carrier or your credit card company. Which solution sounds better?

I think the annonymous, pre-paid nature of Octopus cards will also appeal to many - it's inherently more user-friendly because you're not required to have a credit card or even a bank account, making it a lot more accessible to the wider population. It'll also pacify consumers who are paranoid about being tracked by 'the corporations'.

As with all of these things, the hard part is getting everyone to install the Octopus card readers in the first place - for the skeptics, at least there's the shining example of Hong Kong to look towards...

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