Should Card Payments Be Mandated in Taxis?

Card payments accounted for more than half of all UK transactions for the first time in 2019. This figure has grown significantly since then, no doubt thanks to the effect of the pandemic.  

For better or worse, the pandemic has accelerated the move to a cashless society. Contactless payments now account for over a quarter of all payments in the UK. When looking at just card payments this figure jumps to over 70%. 

Despite how common card payments have become, there are still a few sectors where there is resistance to the change. One of these is the taxi industry. 

Mandatory Card Payments 

In many areas, card payments are mandated as part of being a licensed taxi driver. This is the case in London, Coventry, Chelmsford, and many other areas. As consumers become more reliant on card payments in taxis, for many it has become an expectation.  

The DfT have even made an exemption to legislation which allows taxi drivers to use their mobile phones to make contactless payments. 

This is why some are suggesting that it's time to mandate card payments nationwide.  

With card payments dominating UK transactions it does make sense. Having a national mandate would provide customers with a guarantee that they can use their card universally. As a service industry, what the customer wants ultimately takes precedence.  

But for some cash is king. 

Against a mandate 

There are elements in the trade against a card payment mandate. Some of the points they make are definitely understandable. 

Mandating card payments means that taxi drivers are forced to accept the costs involved in maintaining a card machine and transaction processing costs. Whilst these fees are significantly less than when card machines first entered the industry, it's still an additional cost. 

Many cabbies also point to the fact that there can be cash flow delays with card payments. Funds can sometimes take several days to clear. Only accepting cash payments means there is no problem with cash flow.  

A concern for drivers who regularly visit rural areas is that they may not have network coverage. This would mean they physically couldn’t take a card payment. Although there is telephone support, allowing payments to be made, if there is poor network coverage there is no guarantee of this as an option either.  

Inevitability 

While there are some legitimate concerns around mandating card payments, whichever way you look at it, a mandate is bound to happen. Since the pandemic, cash as almost been forgotten. Customers expect the convenience of contactless payments in all aspects of their lives. 

It’s only a matter of time until card payments are mandated as a licensing condition.  

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