octopus - mvaasia.com · awards corporate strategy excellence awards 2007 by east week...

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

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.


High demands and intensive usage


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


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



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/ /



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


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


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


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


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


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.


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.


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)


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)


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


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


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.


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


Of the schemes g

Thank You

SYSTRA MVA Consulting (India) Pvt LtdSYSTRA MVA Consulting (India) Pvt. Ltd.

B-307 Great Eastern Summit

206 Oberoi Chambers IIOff Link Road, Andheri

5/F Guru Angad Bhawan71 Nehru Place

Sector-15, CBD BelapurNavi Mumbai – 400 614Tel. +91 22 2757 2745

(W)Mumbai – 400 053

Tel. +91 22 2674 3134

New Delhi – 110 019Tel. + 91 11 2641 3310

Transportation Planning &Transportation, Planning &Research Consultants


octopus - mvaasia.com · awards corporate strategy excellence awards 2007 by east week...

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