The first smart card in Hong Kong is actually not the Hong Kong well known Octopus, in fact it is Mondex, which is known world wide. It is a smart card that is very similar to the Octopus. It stores how much values you have in your card, and when you pay with it, it automatically reduces the credits inside. “Mondex card carries a record of its last ten transactions, including the date, the name of the merchant or vendor and the amount of the purchase.”(Master Card) Their card balances can be checked through a “Mondex key ring card reader” that comes with the card. One of the smartest things of a Mondex card is that it is also a multi currency card. “capable of holding up to five different currencies separately.”(Smart Cards, The Global Information Passport, p153)
The main problem it had faced in Hong Kong was the lack of support. According to Sumner Lemon’s written article, it was said that “efforts to sign up other retailers appear to have fizzled.”(Computer world) In an article from the South China morning post, it was said that Mondex are not better than the credit cards due to the security reasons. “Or smart cards are, at least for the moment, no more than stupid credit cards.” “I’m sticking to cold, hard cash.” “I’m certainly not adverse to using the Internet for credit card purchases.”(SCMP article) This means back then when Mondex first came out in Hong Kong, people still think it is not very convenience as you lose the card meaning losing everything inside.
Mondex came out in the 1997. It didn’t meet original expectations. This was also because in the 1996 similar programs came out and did not meet what the producers expected. “Visa Cash by Visa at the 1996 Summer Olympics in Atlanta, Georgia, has reportedly fallen flat there with the withdrawal of most participating banks. Mondex has reportedly shut down tests in Swindon, England, and Guelph, Ontario.” (Computer World)
There was also personalized Mondex. The Chinese University of Hong Kong wanted to personalize these Mondex cards, it was called the CU Link, allowing their staff and students using the CU link Mondex to do the following things. “using one card to access campus facilities as well as banking and payment services offered by Hang Seng Bank both on and off campus. The CU Link is an all-in-one card for identification and access control” (CU Link) “The CUHK will input the cardholder’s data into the microchip, enabling the card to function as an identity card and bringing increased convenience to cardholders” (CU Link)
Other than this, Mondex is also very flexible in adding values and payments. Payments are quick and easy and values can be added to your Mondex from your bank accounts to the card at public telephones which has the Mondex sign or cash machines or bank counters. Unlike Octopus, later introduced, Mondex allows purchasing more expensive products as long as there are enough values inside, while Octopus’ has a maximum value of $1000. There is also a special security system on Mondex, where you can lock any transactions with the four digit lock password. By turning on the lock key, any transactions or device checking the remaining value is locked until the lock password is correctly inserted.
One of the most well known smart cards in Hong Kong is called Octopus. It overtook Mondex in Hong Kong, it is a very similar card compare to Mondex. “Octopus is an electronic payment system using contactless smart card. It offers users an easy and hassle-free way to travel, shop and dine around Hong Kong. Each Octopus card has a built-in microchip which stores money electronically and also has other applications. Users simply wave their Octopus cards over an Octopus reader which will automatically deduct the correct amount from the card”.(Octopus) It is demanding more popularity over the past years. Many businesses have also begun to use the Octopus readers to allow their customers to pay for the service. This helps both the firm and the customers to save time from taking in hard cash and changing money back to the customers.
There are also a lot of people that is afraid to lose the card among with the card’s deposit. They believe the amount of deposit is too expensive and their ideal price of deposit is $21-30(Lang209, 4.5) compare to the $50 original price. According to the author of Lang209, a reason of setting the high deposit by the company was “to recover the money that passengers did not pay back the negative amount inside the Octopus Card”(Lang209, 4.5)
Advantages of Octopus
Octopus also benefits Hong Kong society with people paying with Octopus and not hard cash. For example, when people from Hong Kong take the bus and when they do have enough change to pay the exact fare, then the person will have to pay a little more than the exact fare. But by using the Octopus, the machine takes out exactly the amount as asked, therefore for the people that uses it, it will benefit for them from saving the unnecessary amount that they would have to pay if they do not have enough change and saving time from finding enough change. Some people also believes Octopus is good because “they could use the very last $0.1 in the ticket to take the most expensive journey”(Lang209, introduction) While the security of smart cards are also better than credit cards also in a way because credit cards can be hacked easily online to get their information to consume things, “A 2-year-old security hole in Microsoft Corporation’s Internet Information Server (IIS) software let a computer cracker download thousands of credit-card numbers from e-commerce sites recently and post them on the Internet.”(CNN) Another way that it is more save is that, it can not be read from illegal credit card readers and therefore, smart cards cannot be copied for illegal use. One other advantage of Octopus is the limitation of how much money you can put in it. Their limit is $1000, so that is also the limit of how much you can lose when you lose your card.
Surveys that have been done by Lang209 has shown that reasons that people uses Octopus are “More convenient than old charging method, Store-valued ticket cannot be used in near future, Lower traveling cost for Octopus System, Persuaded by others, Can access several transport systems with the same card and the card design was attractive”(Lang209, table1 Reasons of people using the octopus system). There are also personalized Octopus cards. For students, they can be enrolled into a Student Travel Scheme if they want to take the MTR with a discount. This is a personalized Octopus Card with the student’s name and picture at the back, the subscriber is asked to fill in a form which includes their Chinese name, English name, sex, HKID number, mailing address, school name, school address, contact telephone number, age and the school endorsement. This information will not be stored into the octopus card and is only use for MTR’s own database system to keep track. (Octopus Phone)
There is also another type of a personalized Octopus card, it allows the user to automatically add value to the octopus card they are holding when there is a negative value in it and this is done by registering the smart card with their banking account. “Each Personalized Octopus card can be automatically reloaded with $250 once a day.. ” (Octopus) This means for Octopus users that have enrolled into the automatically add value system, their maximum loss of the card is $1250. One other advantage for personalized smart cards holders is, “There is an added security for using Personalized Octopus cards – cardholders can report the loss and the lost card will be blocked from further use within 24 hours. Cardholder is only required to bear the loss arising during the first 24 hours after the loss report.” (Octopus)