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New CEO of Hong Kong’s Octopus says payment service must shift ‘from plastic to phone’, and vows to put more readers in taxis

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“Our entire focus and strategy is: ‘How do we move from plastic to phone?’” he said.

“I believe that is the direction that we’re heading towards … [These generations] were born digital. Growing up digital and being born digital are very different. So I think as we move forward with Octopus, being mobile first and digital native is the direction that we really want to be able to focus on.”

The executive, however, stopped short of confirming whether he foresaw Octopus completely abandoning physical cards one day.

“I believe that we’re not actually in the payment business, because payment is a commodity,” he said. “We’re in the user experience business. And people will use Octopus, regardless if it’s plastic or mobile.”

‘Hong Kong’s Octopus to invest millions in technology, consumption voucher offers’

He also emphasised the importance of tackling areas in which cash was still dominant, such as small merchants and taxi drivers.

According to the Hong Kong Taxi Council, the city has about 40,000 taxi drivers, and Ying said 21,000 accepted Octopus payment.

“As Hong Kong adopts digital payments, and as more and more taxi drivers adopt digital payments, we will be able to reach that goal of having all drivers accept digital payments,” he said.

Ying pointed out that while most merchants using Octopus for their businesses needed to pay a percentage of transaction fees, the cost has been waived for taxi drivers since 2017.

Asked about plans to expand usage across the border, he said: “Hong Kong people today are very mobile. They’ll travel to Shenzhen, Japan, Korea, Thailand. So for Octopus, we want to be where Hong Kong people are.”

Octopus card spreads its reach in Hong Kong, wins over elderly, small merchants

The company offers a UnionPay card, which can be accessed through the company’s mobile app, and allows users to pay at more than 30 million points across mainland China without a local phone number or bank account.

Ying said the number of people using the card had increased by 300 times since January.

The company also offered an Octopus mobile app specifically for tourists, which allowed overseas visitors to use Octopus products without a local phone number, top up with a foreign credit card and refund the remaining balance when they left, the executive said.

Octopus was one of the payment platforms the government used to distribute several rounds of consumption vouchers, with the others being Tap & Go, Alipay and WeChat Pay HK. HSBC’s PayMe and Bank of China’s BOC Pay joined the list in 2022.

AlipayHK is owned by Ant Group, an affiliate of Alibaba Group Holding – the Chinese conglomerate that owns the South China Morning Post.

But residents who chose to use Octopus to claim their vouchers had to do so in more rounds than users of other payment platforms due to the card’s upper limit on credit storage, which was increased to HK$3,000 (U383) from HK$1,000 in April 2021.

According to the Hong Kong Taxi Council, the city has about 40,000 taxi drivers, and Tim Ying says 21,000 accept Octopus payment. Photo: Felix Wong

Asked whether he saw room for the ceiling to be raised further, Ying said: “I think we are in the user experience business. So whatever is important to our customers is important to Octopus.”

Octopus, a subsidiary of the MTR Corporation, reported revenue of HK$1.67 billion for 2022, up by 28.5 per cent compared with 2021. About 20.7 million Octopus cards were in circulation as of the end of last year, amassing an average of 14.1 million daily transactions valued at HK$342.6 million.

Article was originally published from here

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