The Royal Bank of Scotland (RBS) is piloting MasterCard's PayPass contactless payments technology in London black cabs.
The trial will enable customers to pay for fares of £10 or less by tapping their MasterCard PayPass card against specially equipped payment readers in 25 London-based cabs. The terminals can also be used for normal card transactions of over £10.
The bank says its research shows that half of people carry less than £10 in cash and would take more taxis if they could pay with a contactless card. Furthermore, 77% of taxi drivers said accepting card payments helped them meet customer demand, with 78% agreeing it is easier and faster.
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Ron Kalifa, RBS, says: "With contactless, customers will appreciate the convenience and speed of the card as well as the freedom from worrying about whether they have enough money for their taxi fare. Meanwhile drivers will benefit too because payment is faster and there is potential to attract more customers who do not have cash available or would not normally take a taxi for 'lower fare' journeys."
Last year Barclaycard teamed with London-based Computer Cab to unveil a contactless payments terminal that can be installed in taxis, which utilises MasterCard rival Visa's 'wave and pay' technology.
Both MasterCard and Visa also began rolling out contactless payments technology in New York taxi cabs last year, whilst in 2006 US eftpos vendor Verifone said it was rolling out PayPass across all cabs licensed by the Philadelphia Parking Authority (PPA).