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What is an Octopus Card?

By Matt Brady
Updated May 16, 2024
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The Octopus card was the world's first contactless smart card. Debuting in Hong Kong in 1997, the Octopus was created to provide mass-transit commuters a faster and more reliable method of payment. The card contains circuits able to communicate by radio frequency with a card reader. Card users store money on the card prior to use, which makes it easy for Hong Kong railway commuters to quickly pay for and get on a train simply by holding their card to the reader as they walk through the entry. The Octopus card became so popular that it's now used in Hong Kong for a variety of retail services as well. Other card companies throughout the world have launched contactless smart cards, such as the Visa® payWave™ and the MasterCard® PayPass™.

The Octopus card wasn't just popular for its easy-to-use design, but also for the security it provides to the user. One particular type of Octopus card, the On-Loan card, is preloaded with a monetary value before users even purchase them. Thus, there is never any communication between the card and the user's bank account. If the smart card is stolen, only the amount of money on the card is subject to theft, as opposed to a user's entire bank account. It's called On-Loan because Octopus Cards Limited is, in a sense, lending money to the user in exchange for a deposit. These types of cards will also provide payment even if the card has been used to a negative value.

The other main type of card is the Sold Octopus. The Sold Octopus Card has minimal or no initial value to it, leaving it up to the user to load the card. The advantage of a Sold card is that it's reloadable. If users don't want to provide the card with bank account information by transferring funds electronically, they may add value to the card by paying cash at select retail locations. Octopus Cards Limited offers Sold cards in personalized designs as well.

There are some risks to one's personal information when using the Octopus card or other contactless smart cards. The risk comes from the fact that the card is embedded with a computer chip. This chip stores pertinent information, such as sources of funds and the card's payment history. If hacked, a thief could potentially discover someone's bank account information — if the card was loaded by electronic transfer — or be able to track a person's itinerary and whereabouts. To avoid such problems, card companies recommend that users shred cards instead of throwing them away. Companies that store payment information, such as transit systems and retail centers, have also taken measures to ensure the security of smart card transactions.

The Octopus card has also evolved beyond use strictly as a payment device; many school systems, residential buildings and commercial businesses use them as an identity and access device. Schools can use Octopus cards to track student attendance. College campuses, as well as residential and office buildings use them as a way of providing access to some and restricting access to others. Octopus Cards have also evolved into a new kind of fashion, with Octopus watches, key chains and ornaments that operate exactly as the card does. For example, railway commuters with Octopus wristwatches can pay a train fare with a simple wave of the wrist as they walk through the turnstile.

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Discussion Comments
By anon133995 — On Dec 13, 2010

Can I know if there is any way to prevent the card from being read by the machine? This is a security question as my company want to delivery some value added card to our customers without interruption. Is there any material that can filter out the radio frequency?

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