Octopus in Hong Kong
One of the very first implementations for contactless payment (done well) is the Octopus card system. For a dated system of close to twenty years. The card works amazingly well and fuses into a person’s life and takes a permanent slot in the limited slot real estate in wallets and purses. Octopus is definitely one of my favorite go to examples for a successful and amazingly well designed contactless card (eco)system. And of course the playful choice of name (Octopus because it was supposed to be used in the 8 major forms of transportation in Hong Kong).
The card excels not solely as an alternative to the bus/ train ticket, it helps to facilitate commerce for quick purchase items. The whole cycle of using the card is ingeniously conceived. The biggest pain and bottleneck is normally the card value increment process which relies on queuing in front of a booth or machine. The full stack of the octopus card was designed to allow the topping up of value to be seamless and transparent to the user. Once the value of the card dips below a certain amount, it would trigger a debit from the bank account and credit it into the card for continued use. This removes the hassle of topping up or holding too much value in the card. The just in time value increment is a stroke of genius that has fueled adoption.
Australia and Japan
Other locales over the last few years have also started adopting and rolling out similar technology. However, the user experience is normally limited to transportation (such as Melbourne’s Myki) or limited partner stores (Japan’s Suica)
Granted the last I used Myki was a few years ago, things have probably improved. To my knowledge Sydney uses a different standard (Opal card) and the card infrastructure (readers) are not compatible 😱
The Suica is amazing to be adopted across a country of that size as a single standard. This is definitely a shining example of bureaucracy helping to create something better (although very slowly)
For now, the Suica is limited to convenience stores, vending machines and of course public transportation. I did not get a chance to test whether there is an ability to increment funds at the point of purchase (foreigners are not allowed to open bank accounts unless they have the right of abode in the form of employment or student ID)
Sunny Singapore
Back home in Singapore, the Ezlink system was adopted close to 15 years ago. In terms of the adoption by merchants, it has seen a steady increase in the number of stores adopting the card infrastructure: convenience stores, some vending machines, most supermarkets. However one of the biggest gaps is the inability to increment value just in time at merchants point of sales. The only existing way to increase value automatically is only when the value runs out when using public transportation. I.e if I’m left with $0.9 and I wanted to pay for a can of $1 coke, I can’t just use my card at the convenience store without first using the public transport to fully deplete and trigger a top up or head to a kiosk or customer service booth to add value. Granted, convenience stores do have value top up service, but it’s an added layer of frustration when the transaction can occur in the backend.
What makes it worse is the backend infrastructure used to support the value increment automation is split into two competing standards: Ezlink and NetsFlashpay(both of these are accepted by card readers but the topping up is different. As a tourist, I would be totally confused for sure). On a technical level I believe it’s a difference in the encryption because both cards run on the same frequency of 13.56Mhz. However, what really disappoints me is that for such a small country, there are two standards that does the same thing and neither one does it well.
What’s the proposal?
In terms of the backend transactions, Ezlink and NetsFlashpay should reach an agreement to allow users to use either infrastructure for topping up. This would be similar to having banks sharing their ATMs in an alliance and no grow the ATM reach without spending additional money on hardware or rental. At any rate, there would definitely be a drastic drop in the number of confused tourists 😀
More importantly, the triggering of top up should really extend beyond the use of public transport turnstiles and bus readers. I believe. When this was designed it may have been a security feature to limit the locations of auto top up. This would limit the extent of abuse should the cards fall into the wrong hands. However, a decade later, technology has improved. The activation and deactivation of the card can be controlled through the use of a mobile app if it’s ever lost (ok, granted, I do need to see the detailed architecture before making such an argument, however, on a high level I am quite confident it’s not a big technical challenge)
The seamless payment from consumer to merchant is needed to drive adoption in the two sided payments economy. More users would be greater incentive for more merchants to sign up. For now, the cards are not living up to their full potential by limiting the ability to increase value seamlessly and just in time. I would look forward to the next improvement from the contactless card payments companies to deliver a cooler better user experience
