Singapore and Hong Kong are two interesting places for studying service innovation due to the high density of the population and also a consumer culture that favours the try of new products and services embedded with new technologies. However the two cities have experienced a different model of service innovation. In Singapore the government is the driver of the service innovation stimulating innovation through initiatives and public policies while in Hong Kong the government role has created an environment in which entrepreneurs are the engine of innovation and economic growth. While the type of service innovation (electronic cash), we examine in this paper has also been launched during the same period in Singapore we will only examine Hong Kong innovation cases because impediments to service innovation is largely influenced by countries specific regulatory issues that create specific obstacles. The objective of this paper is not to suggest a new development process for services enabled technologies or to find key success factors for such services but simply to understand the reasons of success and failure of two major service innovations in Hong Kong, Mondex and Octopus launched ten years ago. Mondex was a major innovation developed by Hongkong Bank (HSBC) late in the 90’s and Octopus launched during the same period by a consortium of transportation companies controlled by the Hong Kong Government. The two services have been largely driven by new technologies. Mondex failed and was withdraw from market in 2002 while Octopus became a success story in Hong Kong. We used a case study approach to explore the service innovation process. We interviewed project managers, marketing, operations and information technology department managers from both firms, collecting secondary data from business magazines and also using online research to collect more recent information.