Editorial | Octopus’ Japan deal can be a springboard for further innovation

When enabled, customers can use their Octopus app to scan or generate PayPay QR codes, allowing them to complete transactions with vendors. Octopus has promised favourable exchange rates and no transaction fees. PayPay estimates that it has more than 70 million registered merchants in Japan, an operation that extends to more than two-thirds of the country’s code-based payment market share.

Octopus deserves credit for expanding its business tentacles in recent years. The home-grown technology was launched in 1997 to automatically collect train fares. The RFID (radio-frequency identification) chipped cards inspired similar systems overseas. Few, however, managed to follow the Octopus innovations that helped the company expand into providing popular touch-and-go payments for goods and services. The Japan project is not the first international expansion for Octopus. In 2023, it launched Thailand’s PromptPay payment in its app. Last year, it introduced a service with Zero Pay in South Korea as well as the roll-out of a new Octopus card that allows users to top up in Hong Kong dollars for rides on public transport across 336 cities in mainland China.

More than 20 million cards and downloads of the Octopus app are now in use. RFID cards are no longer the main medium for the service, since more than half of the city’s population has adopted the mobile version for fares and transactions. Many travellers, understandably, are focused on the convenience of being able to use Octopus while abroad. Broader benefits await if Octopus can keep up the momentum with proactive strategies that capitalise on its international reputation.