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Following is a question by the Hon Bernard Chan and a written reply by the Secretary for Transport, Mr Nicholas Ng, in the Legislative Council today (Wednesday):

Question : Will the Government inform this Council whether it knows if the relevant parties have plans to extend the use of Octopus cards to cover payments such as those made when shopping in convenience stores etc; if there are such plans, whether and how the Government will regulate such uses?

Reply :

Madam President,

The Octopus common ticketing system is managed by a private company, the Creative Star Limited. The company is set up by a group of public transport operators for the development and promotion of the common ticketing system which enables commuters to use one single card for travelling on different modes of public transport.

While Creative Star Limited has always had, and will continue to accord top priority to expanding the use of the Octopus Card for transport-related payments, the company is also considering ways to improve services to Octopus cardholders. One such improvement is the use of Octopus Card for small purchases at convenience stores, as value adding facilities have already been made available at convenience stores since May 1999.

The Octopus Card is currently regulated under the Banking Ordinance (Cap. 155) which provides the Hong Kong Monetary Authority (HKMA) with the power to approve and regulate the issue of multi-purpose cards including the Octopus Card. The regulatory regime of HKMA aims to ensure the soundness of multi-purpose card schemes and the financial strength of the issuers.

To pursue its plan for the use of the Octopus Card for small purchases at convenience stores, the Creative Star Limited will have to apply to the HKMA for an appropriate authorization under the Banking Ordinance. In considering its application, the HKMA will have regard as to the soundness of the card scheme, the business plan and the measures of Creative Star Limited in managing the various types of risk to which the use of the card is exposed e.g. credit risk, liquidity risk and market risk.

End/Wednesday, January 19, 2000

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