Octopus contactless payment system

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Octopus is a smartcard payment and ticket system rolled out in Hong Kong on the local mass transit system what the locals call the MTR.

McDonald's till

However the card system is also fast becoming a local electronic payments system covering everything from the 7-Eleven convenience store purchases, cinema tickets and a Happy Meal at the neighbourhood McDonalds.

Octopus is attacking more established payment systems like Visa and Mastercard at the bottom end of the market. As it becomes more ubiquitous the network effect will kick in lowering the transaction cost on Octopus, allowing it to squeeze paper money and coins out of everyday purchases.

Octopus is the kind of success story that people in the mobile payments sector should be looking at to see how they can further expand their businesses.