OCTOPUSThe most successful smartcard in the worldThe most successful smartcard in the world
Author: Alok Jain | 08 JAN 2011
Hong Kong - MVA Corporate Headquarters in Asia
Hong Kong isn't known for being the center of technological innovation but it could very well become the first cashless
society in the world, thanks to a little plastic card known as y , pTHE OCTOPUS.
- The Wall Street Journal
OCTOPUS| 08 JAN 2011Page 1
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Little bit about Hong Kong
Hong Kong boasts one of the ld' b t bli t tworld's best public transport
networks. Every day an average of 11 illi j11 million passenger journeys are made throughout the city on a wide
i t f bli t t tvariety of public transport systems.
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High demands and intensive usage
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Train Service Delivery
100.0%
99.9% 99.9% 99.9% 99.9%
99.8%
99.9%
99 6%
99.7%
99.8%
99.5%
99.6%
99.3%
99.4%
URL/TCL/DRL/AEL ERL WRL LRLURL/TCL/DRL/AEL ERL WRL LRL
2008 Performance Target
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Passenger Journeys On Time
100.2%99.9%99.9%99.9%99.9%
99.8%
100.0%
99.2%
99.4%
99.6%
98.8%
99.0%
98.4%
98.6%
URL/TCL/DRL AEL ERL WRL
2008 Performance Target
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Train Punctuality
100.2%
99.8%
99.9%99.9%99.9%
99.7%99.8%
100.0%
100.2%
99 2%
99.4%
99.6%
98.8%
99.0%
99.2%
98.4%
98.6%
URL/TCL/DRL AEL ERL WRL LRL/ /
2008 Performance Target
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International benchmarking – Trouble Free JourneyJourney
Source: CoMET 2008 KPI Report
Thousand Car km per incident causing a delay > 5 minutes
ar k
mou
sand
Ca
Tho
Asian Metros North American MetrosKCR West Rail
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Asian MetrosSouth American MetrosEuropean MetrosNorth American Metros
KCR East Rail
KCR West Rail
Sustainable Metro – Farebox revenue sufficient to cover operations and maintenance without any subsidyy y
Non-fare revenue excluded AEL and
Ratio of Total Revenue to Operating Cost 2007
Property Rental and Management incomes
D btDebt
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The Octopus Story
1994 – Creative Star Companyp y 1996 – Naming it OCTOPUS Sep 1997 Commercial Launch (non profit Sep 1997 – Commercial Launch (non-profit
business) 3 m cards sold in first 3 months 3 m cards sold in first 3 months
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The Octopus Story
Usage across 6 public transport operators using one single card eliminating the hassle of finding exact change forcard, eliminating the hassle of finding exact change for individual journeys
2000 – Realising vast commercial potential Octopus 2000 Realising vast commercial potential, Octopus obtained a Special Purpose Deposit-taking Company authorisation from HKMA to expand its use to a wider base of different applications.
2001 – Transformed from non-profit making into profit making
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The Octopus Story
2005 – Holding company incorporated to spin off O t ' t b i i tOctopus' non-payment businesses into new, separate subsidiaries independent of the payment b ibusiness
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Complex Business Rules Made PossiblePossible
3rd Leg Fare ChargeFare Charge1st Leg Fare Charge
2nd LegCase
Normal fare of 2nd leg minus 1st legBus
LR
Charge
Bus1.
LR2.
e
Bus(route Y)
No charge (if the 1st leg is bus transaction with
minus 1 leg fare, if the fare is less than zero, it
Bus (route X)
Normal fare of LR/Bus
LR3.
different route no. and the 2nd leg is a LR transaction.
will be taken as zero value (free ride),
Remarks:Remarks:1. The total journey time for LR-Bus, Bus-LR and Bus-LR-Bus is 120 minutes.2. The transfer validity time (TVT) for LR-Bus and Bus-LR is 60 minutes.3. Both Anonymous and Personalised Octopus cardholders can enjoy intra-modal discount.
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ALL PERVASIVE
Today, Octopus can be used in almost all HongToday, Octopus can be used in almost all Hong Kong's transportation systems and also retail outlets, wet markets, self-service businesses,outlets, wet markets, self service businesses, leisure facilities, schools, parking and access
control.control.
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Awards
Corporate Strategy Excellence Awards 2007 by East Week Chairman's Award of WITSA Global IT Excellence Awards by World InformationChairman s Award of WITSA Global IT Excellence Awards by World Information
Technology and Services Alliance (2006) Hong Kong Awards for Industries: Innovation and Creativity by Hong Kong
General Chamber of Commerce (2005)General Chamber of Commerce (2005) People Site Certification by Asia Pacific's Customer Service Consortium (2005) Enterprise Award of DHL/SCMP Hong Kong Business Awards 2003 by DHL/South
China Morning PostChina Morning Post Superbrands Hong Kong & Brand Leader Award - Business Equipment & Services
by Superbrands (2003) Best Practice Awards 2003 in Simplicity by Best Practice Management Ranked 7th in "The Election of 10 Engineering Wonders in Hong Kong" by The
Hong Kong Institution of Engineers & The Leisure and Cultural Services Department (2000)
The 1st UITP Secretariat General Award for Innovation in Public Transport by The UITP's Secretary General (1999)
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Asian Innovation Awards 1998 by Far Eastern Economic Review
"… Octopus is showing that its tentacles can reach far b d th t t ti t ith th dbeyond the transportation system, with the card
becoming the method of choice for buying all sorts of l t it "low-cost items..."
Business Week Online (24 June 2002)
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What Does OCTOPUS Do? Improves operational efficiency
Secure, efficient, flexible and reliable means of revenue collection Shorter transaction time Reduced preventive and corrective maintenance activities Reduced cash handling Additional internal uses such as staff ID and access control
Contributes to financial growth Increased usage and revenue through enhanced user-friendliness
I d t ti th h t it b i i i i f d Improved revenue protection through greater security by minimising fraud Ability to block transactions after card loss Reduction of maintenance costs by as much as 40% Elimination of card recycling costs as Octopus can be recharged Elimination of card recycling costs as Octopus can be recharged Economies of scale achieved by the sharing of a common system infrastructure
Add to brand values A platform accommodating complex payment collection strategies A platform accommodating complex payment collection strategies A platform for implementation of own or joint loyalty programmes Data on customer profiles and behaviour for deeper market insights and service improvement Enhanced corporate image and improved customer service
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Enhanced corporate image and improved customer service
Some Results
AFC Operating costs down by up to 70%Ticket Gate throughput 28 pax/minute to 40 pax/minuteReduced Fare Evasion Rates
Closed metro system – 0.014% Open systems (Light Rail) – 0.36%Open systems (Light Rail) 0.36%
99.9% reliability of Octopus AFCCard failuresCard failures
0.01% of the total card population (2003)2006 0 0023% 1 f il 32 989 t ti 2006 – 0.0023%. 1 failure every 32,989 transactions
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System Architecture
Octopus Clearing House System
Th O t Cl iThe Octopus Clearing House System uses a
complex set of business rules to validate eachrules to validate each
transaction prior to authorising settlement. A standard set of reports isstandard set of reports is
then sent to each participating service
provider on a daily basisprovider on a daily basis.
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Data Application
Modelling &Data Analysis
Octopus Data
Data AnalysisTransport Type (rail line, bus…)Hardware Type (gate, OTP, AVM…)Card Type (Adult, Student…)Entry StationExit StationBusiness DateEntry TimeExit Time
Results
Daily/Weekly/Monthly travelling patternSpending beha io rAmount
Transaction Type (fare, add value…)Fare Type (normal, 1st class…)Discount Value
Spending behaviourRevenue analysisInterchange pattern…
…
Selection of marketing schemes
Post-evaluation onThe effectivenessOf the schemes
Simulation &Evaluation ofMarketing Schemes
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Of the schemes g
Thank You
SYSTRA MVA Consulting (India) Pvt LtdSYSTRA MVA Consulting (India) Pvt. Ltd.
B-307 Great Eastern Summit
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Sector-15, CBD BelapurNavi Mumbai – 400 614Tel. +91 22 2757 2745
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Tel. +91 22 2674 3134
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Transportation Planning &Transportation, Planning &Research Consultants
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