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Coercing Consensus: Unintended Success Of The Octopus Electronic Payment System, Leung-Sea, Lucia Siu

Prof. SIU Leung-sea, Lucia

This paper contrasts the success and failure of two electronic payment systems in Hong Kong, Octopus and Mondex, during 1996-2002. The case illustrates the new properties of electronic currencies, and provides insights for product designers and regulators. Mondex was endowed with the full legal status of money, launched by a mammoth banking group, with Mondex cards given away for free to consumers. Yet the Mondex system went into oblivion within five years. Octopus started as a modest stored value transport ticket that required a deposit. It ended up as a city-wide multipurpose payment card used by 95% of the adult …