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In cities around the world, taxis are starting to deploy electronic card-payment terminals. Outside the U.S., that growth has started with simple terminals and voluntary use.

VeriFone Holdings Inc., a payment-terminal maker whose products are being used in two of the largest U.S. deployments of wireless-payment systems, also has installed versions of its wireless terminals in taxis in Mexico, Brazil, Singapore and Australia. VeriFone expects Columbia to join the list soon. VeriFone representatives decline to say how many of their terminals are used in taxis in those countries.

Driver acceptance of payment cards in the taxi programs outside the U.S., for the most part, is voluntary. Moreover, the equipment installed in cabs abroad started simply, without the inclusion of functions for dispatching drivers or communicating with global positioning satellites, says William C. Nichols, VeriFone senior vice president of global marketing and general manager of Asia-Pacific operations.

The proliferation of wireless-phone networks and quick Internet protocol connections were key to enabling use of wireless terminals by wait staff and customers in restaurants. And the technologies now drive the vendors' push into taxis.

A number of taxis in Tokyo accept contactless credit cards and mobile phone-based payments. Efforts also are under way to expand acceptance of card payments in taxis in Europe, but progress has been slow there.

Wireless-terminal adoption takes time, especially if the user is unaccustomed to handling payment cards, Nichols says. "We saw this when we launched our 'pay-at-table' initiative," he says.

Another challenge for mobile-terminal services vendors to overcome is relatively high interchange rates on card payments in taxis. In the U.S., they range from 1.55% of the sale plus 4 cents to 2.3% plus 10 cents.

"Slowly, banks are seeing that [taxi payments are] legit. Once they do, they will start bringing down those fees," Nichols says.  CP

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