However minimum fares will rise by 20p in order to support new technology
Transport for London (TfL) says passengers will be able pay for journeys using credit cards or contactless payment services, following a huge surge in public support for such a scheme and increased competition from the likes of Uber.
However, the service will not be available across London’s fleet until October 2016, and fares will rise slightly to compensate for the costs of installing and using the technology.
“This is great news for the millions of people who use London’s world famous black cabs. This move will boost business for cabbies and bring the trade into the 21st century by enabling quicker and more convenient journeys for customers,” said Mayor of London Boris Johnson.
From next October, the current minimum fare of £2.40 will rise by 20p to accommodate the costs of using the new technology, and could even come into force as early as April next year if approved by the Transport for London board.
The launch is finally happening after credit card companies agreed to lower the fees associated with accepting cards and other contactless methods, which will now be below three percent of the transaction, compared to the current rate, which can be as high as ten percent depending on the provider.
The announcement is the latest that shows the growing popularity of contactless and other forms of non-cash payments in the UK.
Recent research by the UK Cards Association found that more than £2.5 billion was spent using contactless cards in the first half of 2015 across the UK, a significant rise from the £2.32 billion spent over the whole of 2014, as more shops than ever before look to implement the technology.
Visa also recently reported that more than one billion contactless transactions have been made across Europe in the last 12 months, with the UK leading the way in terms of the amount of contactless technology in shops, boasting 49.6 million cards and 410,000 point of sale (POS) terminals.
In order to support this growth, MasterCard recently announced plans to greatly improve the scale of contactless payments to allow ‘high-value’ transactions across all European terminals by 2017.
Currently, the maximum customers can spend in the UK using a contactless card is £30, but by 2017 the company is aiming to upgrade all MasterCard contactless terminals to allow higher value payments, as well as having contactless available at all its point of sale (POS) acceptance points across Europe by 2020.
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