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London's black cabs get wireless payment kit

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Royal Bank of Scotland is to fit proximity-payment readers into 25 London taxies, allowing punters equipped with wave-and-pay cards to settle any fare under a tenner with a touch of the card.

Most London cabs accept credit cards these days, although some still resort to card-impression machines, but the percentage that has to be paid to the card-issuing company makes that ineffective for small amounts - taxies in Glasgow threatened to refuse chip and PIN transactions for less than £12, and charge passengers £1.50 for the privilege.

Proximity payment systems, such as wave-and-pay - or PayPass as the Royal Bank brands it - take a smaller percentage. They therefore make more sense for lower-value transactions, but if the system is going to get any acceptance from taxi drivers the issue of how to tip will need to be solved.

When one had to sign a credit card slip there was usually a blank line, headed "gratuity" into which one could write an amount for the tip. With chip and PIN that option disappeared, and it's taken a few years for terminals to start asking if you'd like to add a tip before entering your PIN. But with proximity payments there is no PIN, nor screen to interact with, so adding a tip becomes more difficult.

The 25 drivers involved in the pilot probably won't care, but if the system is to be more widely deployed, then perhaps a big red button marked "ADD TIP" is in order. But the cabbies still won't take you south of the river after midnight. ®

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