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Last August we noted the partnership between payment terminal supplier Blue Bamboo and payment provider Kpay/Kuaipay to establish a payment network for Beijing's popular Yikatong contactless transit card (also sometimes called "SuperPass"). Uptake of Yikatong cards in the last several years has been excellent; last September, the authority in charge of Yikatong, the Beijing Municipal Administration & Communications Card Co. Ltd. (BMAC), announced that over 13 million cards had been issued and approximately 15,000 new cards were being issued every single day. As penetration approaches 100% among Beijing's nearly 18 million residents, this growth pace will decline, but we do believe the number of Yikatong cards has already surpassed 15 million to date. Whatever the exact number is, it's clear just how great the potential is for an Octopus-like network in Beijing. But so far in 2008, only three new merchant partners have been added--Weiduomei bakeries, Jia He Yi Pin Congee, and Jack Hut drink shops--bringing the total number to seventeen. And with new subway lines scheduled to open in time for this summer's Olympics, not to mention a long overdue pay-by-distance system for subway tickets, we expect it to be a while before the merchant network reaches a critical mass and Beijingers start using their Yikatong cards for food and other small purchases. Signing up a well known, heavyweight merchant partner or two--McDonald's, KFC, or supermarket chain Jingkelong, perhaps--wouldn't hurt, either.
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