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| Subject: Re: Octopus card uses proprietary technology | |
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Author: 1998--milfare |
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Date Posted: 01:03:09 01/30/03 Thu In reply to: Key Clients:Hong Kong Exchange&Clearance, UK Defence Nato 's message, "Re: Thales e-Security " on 00:38:28 01/30/03 Thu Octopus card back in business By Jacqueline Mailloux Transport consortium Creative Star was finally able this week to put Octopus smartcards back at ticket windows five months after inadequate estimates saw transport users exhaust the initial supply of cards. To date, just under 4 million of the smartcards have been issued, said Brian Chambers, general manager for contactless smartcards at the Mass Transit Railway Corp. (MTRC), a leading member of the Creative Star group. "That’s when we ran out," he said. Three million more contactless cards have been ordered from supplier Sony, Chambers noted. "Basically that should keep us going for another year," he said, adding that Creative Star hopes to bring the number of cards in circulation up to the seven-million mark within that time frame. Octopus cards are again available at MTR stations, Hongkong & Yaumatei Ferry terminals, KCR Customer Service Centers and KCR East Rail ticket offices, officials from Creative Star said. In addition, "student" and "elder" cards that had been temporarily labeled as adult cards due to the shortfall can now be exchanged, officials said. And magnetic-based Common Stored Value Tickets, the standard before the introduction of the Octopus scheme, will continue to be sold for a limited period and will be valid until December 31, 1998, Creative Star said. Numbers game The Octopus card ran into trouble only four months after its October launch last year, when the supply of the specially-manufactured contactless smartcards ran dry. "There’s a lot of variables in the issue," Chambers said. \ For one, the planners didn’t realize that about 18 percent of Hong Kong transport users carry two cards, he noted. "Eighteen percent is about 650,000 cards which we could have kept going with for a long time until we got more orders." In addition, the introduction of "personalized" Octopus cards has also been held up due to "commercial reasons," Chambers said. Personalized cards would include an additional level of security and privacy so that they could be used with an autopay facility linked to a bank, similar to the direct account debit system already available with Common Stored Value Tickets. The machines used to add value to Octopus cards are already technically capable of directly downloading value from a bank account, Chambers added. "The idea originally was that people who took the autopay facility, which is the automatic [value] loading facility, would need to have personalized cards," he said. "But we’ve not actually launched that feature yet, so instead all those people we anticipated having personalized cards have bought anonymous cards." While the lack of agreements with banks may have slowed plans for distributing the personalized Octopus cards, Creative Star and the banks are working to come to terms. "We hope the commercial agreements can be put in place in the very near future," he said, indicating that it could be within the next month. But despite business glitches, the primary reason for the card shortage was underestimating demand, Chambers said. "We just didn’t anticipate so many people would go out and buy the card," he noted. "When you’re a pioneer, as it were, you take all sorts of risks and some of the risks don’t always come off," Chambers said. "But that’s the way of innovation." Lag time Running out of Octopus cards highlighted the difficulty in replenishing supply quickly – especially since the cards use the relatively new contactless smartcard technology. While it usually takes about six to eight weeks to fill orders for contact smartcards, the contactless Octopus cards have a six month lead time, Chambers said. Part of the problem is that the Octopus card uses proprietary technology – but there’s no other choice, according to Chambers. "In fact all the contactless cards are proprietary at the moment because there aren’t open ISO standards on the things," he said. The other problem is that with a target of seven million cards total over the next year, the Octopus card isn’t a volume product. "It’s a very specialized manufacturing process," Chambers said, adding that while other manufacturers could develop facilities, current worldwide capacity requirements do not justify opening more plants. Smartcard manufacturer Schlumberger Industries, which has been in discussions with Sony about becoming a supplier for contactless smartcards, said that multisourcing would likely come on stream in mid-1999. But until other projects in addition to the Octopus card adopt Sony smartcard technology, the volume requirement is just not there, agreed Jean-Claude Deturche, marketing director for Schlumberger in Asia. He contrasted the Octopus requirement for seven million cards to the 50 million phone cards Schlumberger delivered in China last year. But according to Deturche, in the case of the Octopus project, planning was more to blame than a lack of multisoucing options. "Once you know the market demand, and once you have set capacity to meet that demand you’re set to absorb peaks in demand within normal delivery time," he said, adding that Creative Star should have better estimated requirements and Sony should have invested more in capacity. And while there is no standard for contactless smartcards, there is an emerging de facto standard in Philips Semiconductors/Mikron’s Mifare contactless smartcard technology, which has multiple suppliers, including smartcard makers Schlumberger and Gemplus. "Most [contactless smartcard] projects are using Mifare technology," said Alex Cheung, former general manager for Gemplus in Hong Kong and now director of alliances and business development for Asia-Pacific. "There’s no rush for us to be a second supplier for Sony," he added. Cheung claims that because Mifare has multiple suppliers, there wouldn’t be six month delays in delivering cards; if the chips were in supply, Mifare-based cards could be delivered in about 12 weeks, or 15 weeks if there were a shortage of chips. However, Creative Star had specific requirements for its automatic fare system and did not select Mifare because it was not adapted to those requirements, Schlumberger’s Deturche said. Meanwhile, the Octopus system currently handles about three million transactions per day, and capacity is being upgraded from four million transactions per day to eight million, MTRC’s Chambers said. The increased transaction capacity will support additional service providers such as the bus companies, which have agreed to fully implement the Octopus system on all vehicles within three years, Chambers said. New World Telephone is integrating payment by Octopus card for payphones located in MTR and KCR stations, he noted. In addition, Creative Star is discussion using the Octopus card with Hong Kong Resorts, the Peak Tram and Star Ferry, among others. "We’re looking at the technical feasibility," Chambers said. And despite problems, the Octopus project is drawing worldwide attention as a model installation. "We’ve got a fairly constant stream of people looking [at the Octopus system], because we are probably the flagship in terms of automatic fare collection and we use a contactless smartcard," he said. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Re: Octopus card uses proprietary technology | IP (intellectual property)CEO Armand LinkensOctopus’s plans | 01:07:21 01/30/03 Thu |
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