Taxis now need to have card machines in this UK city

As the UK edges closer towards becoming a cashless society, councillors in Southampton have ruled that all taxi drivers must have card machines.

The changes have been introduced after concerns were raised that drivers were using the lack of a card reader to refuse to carry out short trips. Transaction fees mean that minute or mile-long journeys can prove less profitable for taxi companies and self-employed drivers.

The new rules echo those previously introduced by Transport for London (TfL). Black cabs in the city are required to install an approved card machine in the passenger compartment.

As customers increasingly expect modern payment methods including Apple Pay and Google Pay, the policy could soon be rolled out across more UK towns and cities.

Cash rules

Southampton City Council (SCC) approved the changes alongside a raft of new measures to ensure taking payments is secure and transparent for taxi drivers and customers.

Alongside a requirement to have a working card machine, drivers based in the city will also need to make sure the customer can identify the individual or company that took the payment on their bank statements. This is known as a “billing descriptor”.

Currently, the information that appears on a customer’s statement is subject to the card brand and issuing bank. However, providers such as SumUp will sometimes allow business users to customise information in their account settings.

According to The Daily Echo, a Southampton-based newspaper, the new rules will apply to taxis that can be hailed on the street or at a rank. A separate consultation will be held on whether to introduce the requirement to private hire vehicles, such as Uber drivers.

Cash-free taxi?

The Daily Echo has reported that the new card machine policies were confirmed after a committee meeting held last Wednesday, following a successful trial period. The proposals were apparently supported by 63% of respondents in the committee.

While it is unknown who voted against the change, this could be due to the processing fees charged on most card transactions. Today, some sellers argue these eat into their profit margins.

Another reason could be the movement against the so-called cashless society. UK Finance is now predicting that by 2032, 7% of all transactions in the country will be made by cash, ringing alarm bells for those who rely on coppers and silver to pay their way.

As digital payment methods overtake cash, some are rallying against the trend. They argue going cashless would negatively impact vulnerable people in society, such as the elderly.

Those concerned can feel at ease, however. There has so far been no signal from Southampton City Council that cash payments will be banned in local taxis.

How to get a card reader

Investing in new technology can feel like a burden. Particularly in today’s economy, SMEs are struggling to keep overheads down and maintain healthy cash flow.

Nonetheless, card machines bring many benefits to traders. The majority of customers prefer them to spending cash. Mobile payments, for example digital wallets like Apple Pay and Google Pay, have been named the most popular way to spend today.

Accepting contactless and even chip and PIN payments is also far less painless for cab drivers than waiting for customers to fiddle with a wad of crumpled paper notes (especially when there’s a queue of traffic waiting behind them).

In this context, the new Southampton laws are an opportunity for taxi drivers everywhere to update their tech, and offer customers a diverse range of payment options.

Read more about the top card readers for small businesses, including our number one recommended card machine for taxi drivers, Zettle.