Could the UK adopt an Octopus Card?

After returning to Hong Kong for the first time since before the Covid pandemic, I thought the Octopus Card was an interesting topic to write about. As your interests grow, you begin to become more aware of differences in your environment. Before becoming an economics student, I had never given a second thought to the Octopus Card, mainly used in Hong Kong but also in Macau and Shenzhen. It was just something else we needed to remember to pack with our passport and our Hong Kong dollars. However, with the future of cash being debated in society, I began to wonder whether the UK could adopt something like the Octopus Card??

What is the Octopus Card??

The Octopus Card is a contactless card that, according to the official Octopus Card company, provides a “simple, safe and secure way to pay”. Over 98% of 15–64-year-olds in Hong Kong possess at least one Octopus Card and there are more than 20 million cards in circulation in Hong Kong, which has a population of 7.4 million. The growth of the Octopus Card has led to the introduction of new accessories and applications, for example, watches, key rings and ornaments. When introduced in 1997, it was solely used to pay for public transport like the Oyster card in London. It has come a long way in 25 years. The uses extend, but are not limited to, paying for transport, food, retail, parking, and non-payment purposes such as school attendance and access to office buildings and housing estates. The card is significantly more multi-functional than the London Oyster card because the average person in Hong Kong can just tap their Octopus Card to pay for entertainment, food and public transport. The system handles more than 15 million transactions, worth over HK$220 million, every day.?

There are multiple types of Octopus Cards. The main one is the standard Octopus. There are three variants of the standard card: Child, Adult and Elder. A child card is for people aged 3-11, the elder card for those aged 65 or above, and the adult for everyone in between. The three are distinguishable with their own colour. The child and elder card also allow for the user to receive a deducted fare on public transport. The senior citizens of Hong Kong, aged 65 or above, pay only $2 (c21p GBP) per eligible trip, where government subsidies on fares are applied, on public transport.?

Why do people use the Octopus Card??

Most standard cards are transferable and valid for use by anyone. The system does not hold any information that can verify the identity of the Octopus Card holder, which makes them safe.?One person can hold multiple Octopus Cards and lend them to friends and family with no difficulty. There is no verification required at point of use; there is no pin verification like with a debit or credit card. The rise of contactless in the UK is similar to this but nowhere near on the same scale.?

What makes the people of Hong Kong so confident and so reliant on this card? Is it because it is the norm; that everybody has one so it is just more convenient for you to have one too? Or is it just so convenient to tap and top up?

Topping up is just as easy, and there are plenty of places where you can do this. You can top up the card at the convenience store downstairs, 7/11 convenience store for the younger generation, or at the MTR station before you hop on the train to work. You can even top it up while ordering your breakfast at a chain called Café de Coral, famous with older residents. The maximum amount you can store on an Octopus Card is HK$3000 (c￡300). This may give some sense of security to Hong Kong citizens. Even though $3000 is a lot of money, it is not as much as some people have linked to their debit cards in the UK, and therefore no policy or guarantee is needed to recover any money if a card is lost. The system works because the more people who are using it, the better it is for everyone. The government and other organisations are even giving ‘free money’ to incentivise people to use it.?

The government tapped into the convenience of the Octopus Card during the Covid pandemic. They took a similar fiscal stance to the British government and believed fiscal stimuli would boost the economy and lead to growth led by consumption. The consumption voucher scheme was launched in 2021 with eligible residents getting coupons worth HK$5000 and doubling the following year to HK$10,000 in 2022.?

Do I think the UK could ever adopt something similar?

Yes. Even though it took Hong Kong 25 years to get to the scale it is at now, the use of contactless is exponentially rising. Around 83% of people in the UK now use contactless. There are policies in place to reduce the risk of losing all your money if you lose your debit card. For example, you can use mobile banking or call up the bank to freeze your card if it goes missing. The London public transport system was the first to introduce contactless travel in 2019 and other transport operators have since introduced contactless payments for travel across the UK. Many cities also have introduced their own Oyster card: for example, across the North East, people can use a Pop card on the Metro and most buses. However, no city has replicated the success of the Octopus Card.?

Will the UK ever adopt an Octopus Card?

It seems like a good idea, especially when considering the advantages it can bring in difficult times, such as the pandemic. A UK version would have been put to great use to ensure the delivery of the government's energy top-up payments. Perhaps the UK has missed its opportunity as the Oyster card seemed the obvious choice to expand into Octopus Card territory.?However, with a dynamic and exciting payments industry, perhaps the UK might go a step further and produce a product that builds on the success of the Hong Kong Octopus Card.

This article is by Abi Tang. Join Abi on Wednesday 17th May at 11am for an Enryo Consulting Half Hour Briefing where she'll be exploring this topic in more detail.