Hong Kong's Octopus Transit Card to Support Apple Pay Later This Year [Updated]

[tongxinshe]

I live in the US, in Arizona in all places, which isn’t exactly the epitome of tech. I haven’t used cash in over 10 years. I don’t have any cash in my wallet.

The only time I touch cash is when people give me cash for various reasons like Christmas and Birthdays. Even this is stopping with people giving me Visa gift cards or even just texting me the money.

The US is pretty much already cashless for people who don’t carry any cash like myself. I guess a lot of this is due to Square. Most street vendors in the US have Square or similar devices to accept cards/Apple Pay. And rental bikes (Chinese companies at that!) etc accept cards in the US.

The hate with QR codes is that it isn’t well integrated. You have to hunt for an app, find the app, open the app, go through steps to pay. And then the whole direct access to the bank account think without a card as a middle man with consumer protections.

If Asia had a “Square” (Japan does have Square but their not china), I bet WeChat and those other companies with QR code wouldn’t have been as popular.

The processing fee is too high for a lot of the small stores or booths, their normal daily profit margin likely cannot cover that processing fee.
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This is just my experience but here in Arizona I have been able to tap at most places I go to, about 90% of stores. 10% pretty much being sit in restaurants and Walmart. For Walmart I do use Walmart Pay (QR code based!). There is no tap limit that I know of in the US, I’ve tapped for $1k+ car down payments at the dealership, I’ve tapped at the court house to pay $500 court fees, and of course at Apple to buy a new Mac. If I walk into a store without tap, I do carry only one card with me in a simple card holder with my ID, a Costco card (going away on Jul 22 as Costco finally will have a digital card), and a backup card for places without tap.

A lot of small restaurants and small grocery stores in the US don't accept card payments for amount lower than $20. And, there are always places like flea market, farmers market and garage sales.

 

[dontwalkhand]

The processing fee is too high for a lot of the small stores or booths, their normal daily profit margin likely cannot cover that processing fee.
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A lot of small restaurants and small grocery stores in the US don't accept card payments for amount lower than $20.

$20??? Here in AZ I have never seen it more than $5. Where are you going where it’s $20? I think there are laws that limit it to $10 and in some states outright illegal. Even at the stores where it’s $5 as mentioned, they just charged 10 extra cents which, who cares? Still more convenient than paying $3 to pull out cash.

 

[TheIntruder]

I've visited HK and the Octopus card is fantastic, even if it's limited to transit and convenience stores.

I'm currently in Europe, and NFC terminals rule. Almost every entity I've encountered that takes credit payments has an NFC terminal, including parking meter machines. No need to go through the awkward "print and sign" routine for Americans with half-hearted cards that lag the rest of the world even after the big push for EMC tokenized payment adoption.

Fellow non-techy traveler was convinced to add their cards to Wallet app after seeing how convenient it is.

Hopefully, the U.S. will catch up at some point, but I have doubts.

 

[tongxinshe]

$20??? Here in AZ I have never seen it more than $5. Where are you going where it’s $20? I think there are laws that limit it to $10 and in some states outright illegal. Even at the stores where it’s $5 as mentioned, they just charged 10 extra cents which, who cares? Still more convenient than paying $3 to pull out cash.

There is a concept of "minimum amount per transaction" in credit card processing fee, one dime is far from covering that.
I met restaurants with $20 minimum at a lot of places I've been to -- CA, NY, FL, even in Chicago.

 

[tmiw]

Hopefully, the U.S. will catch up at some point, but I have doubts.

Frankly, I think the US will never have 100% NFC penetration at the merchant level, mainly because some industries heavily frown on customers handling the payment process. We may end up with enough penetration that it'll be usable for most transactions, though, with the rest either running Apple Pay/cards through their own apps/websites or inserting cards for customers. (Restaurants in particular I can see doing the latter, or potentially just tapping contactless cards for customers if/when those become more common.)

However, if the networks do end up making NFC acceptance mandatory at some point like they have in Europe, it wouldn't be the worst thing in the world.

There is a concept of "minimum amount per transaction" in credit card processing fee, one dime is far from covering that.
I met restaurants with $20 minimum at a lot of places I've been to -- CA, NY, FL, even in Chicago.

I mean, I don't doubt that this happens, but $10 is the maximum they're allowed to impose (and only with credit cards at that, not on debit/prepaid cards). One should really be reporting such places to Visa/MC:

https://usa.visa.com/Forms/visa-rules.html
https://www.mastercard.us/en-us/consumers/get-support/report-problem-shopping.html

Also, FWIW, despite California's reputation of being less card friendly than some other parts of the US, I don't run into minimums and surcharges that often outside of gas stations. And I go to some pretty small businesses, too.

That all said, do merchants wish they paid less for card processing? Definitely. However, I don't think they generally want it enough to, say, dramatically ramp up surcharging and minimums or even no longer accept them (I doubt they're going to issue phones to employees/make them use their own to accept QR, especially if it means they have to manually enter the accepted amount into the POS and slow down checkout. Nor go through POS integration efforts similar to what they're already doing for contactless for just any random QR system out there--not without a much bigger incentive, anyway.)

 

[haruhiko]

Dude. You need realize in Asia, at least developing countries, Point of Sale machine and credit card are not as prevalent as in United Stats and Canada.

If you go to any street vendors, restaurants or night market, there is no way vendors have point of sale machine. QR code scan is great way for vendor to collect money and pave the way for mobile payments.

I don’t understand the hate of QR code. It is easy to setup and easy to use. It allows small vendors not collecting cash, it allows easy way for mobile payment become mainstream.

In fact, I can say cashless society is more likely in China than United States of America.

Not the case for Hong Kong. Wireless card reader everywhere. The rest which don’t have wireless card terminals, have octopus readers.

 

[konqerror]

There is a concept of "minimum amount per transaction" in credit card processing fee, one dime is far from covering that.
I met restaurants with $20 minimum at a lot of places I've been to -- CA, NY, FL, even in Chicago.

Agree with dontwalkhand, never seen $20 in the US. $5-$10 is the range, if any.

 

[szw-mapple fan]

So in other words WeChat Pay and Alipay are just the CurrentC for Asia. You guys should be against this! QR codes? Direct access to bank account? It literally is CurrentC!

Sheesh Apple Pay wins in every way compared to this.

It's not literally CurrentC. It's more like Venmo or Paypal. QR Codes are a cheap and convenient way for vendors to accept digital payments in a country where smartphone ownership is far higher than credit card ownership. China became a middle income country just as digital payments became mainstream, so many people simply opted for digital wallets instead of getting credit cards. There's also the issue of credit card fees and expensive terminals for sellers. For most small vendors and ships it's simply not worth it.

 

[Azelastine]

Major city in mainland China, metro station just support bank card nfc, you don’t even need to get a dedicated metro card, which has to get balance...

 

[ignatius345]

$20??? Here in AZ I have never seen it more than $5. Where are you going where it’s $20? I think there are laws that limit it to $10 and in some states outright illegal. Even at the stores where it’s $5 as mentioned, they just charged 10 extra cents which, who cares? Still more convenient than paying $3 to pull out cash.

And there are also laws in some places that forbid "cashless" businesses, thank god, because it's an exclusionary tactic that keeps "certain people" who maybe don't have access to banking out of their stores. And on top of that, not everybody wants their every move tracked, and not every small business cares to peel off several percentage points from their gross to pay processing fees. There are quite a few small places in my neighborhood, here in NYC, that offer a discount for people who use cash for exactly this reason.

 

[dontwalkhand]

And there are also laws in some places that forbid "cashless" businesses, thank god, because it's an exclusionary tactic that keeps "certain people" who maybe don't have access to banking out of their stores. And on top of that, not everybody wants their every move tracked, and not every small business cares to peel off several percentage points from their gross to pay processing fees. There are quite a few small places in my neighborhood, here in NYC, that offer a discount for people who use cash for exactly this reason.

From the same state that also outlawed businesses from charging a “card fee” (which they loopholed their way in the form of cash discounts).
I’m indifferent about the matter
I do wish there were laws that said you take cards you have to take NFC however. We could easily blanket the whole US with Apple Pay if there was such a law.