point of sale ..... point of sale .. TAKING CARDS: YOUR GUIDE TO


CARD PAYMENTS IN THE TAXI INDUSTRY


These days, you can use a credit or debit card to pay for just about anything from almost anywhere. Whether it’s a lunchtime sandwich or a new sofa, cards are an indispensable part of day-to-day modern living. In 2009, there were 162.6 million cards in issue UK-wide (UK Cards Association figures) and anecdotal evidence suggests that many people are more likely to be carry- ing cards than cash. Increasing card use has led to a large- scale sea change across the taxi indus- try. Passengers now expect to be able to pay for taxi journeys by card, with drivers and fleets who are unable to accept this type of payment losing fares as a result. This is particularly galling for those who see their rivals taking higher value longer fares (from corporate pas- sengers, for example) which are far more likely to be paid by card since passengers often simply don’t have the appropriate cash.


If you’re looking to join the revolution by tak- ing cards in your taxi, there are various solu- tions available for you, but all the jargon is often confusing for someone unacquaint- ed with the intricacies of card payments. We’ve outlined some of the options here, and highlighted some of the major pitfalls to watch out for when getting started with cards.


The Right Provider Choosing the best service provider for your needs is extreme- ly important.


Some providers decid- ed to approach this problem on a cash- based model: a driver takes payment by


card, keeps his copy of the receipt, physi- cally drives to meet his provider (who has bundles of cash deliv- ered regularly) and is then paid for his trans- action in cash. The flaws of such an approach are immedi- ately obvious: the expense of moving cash in transit, cou- pled with the requirement for some- one to be on-hand to pay the appropriate drivers, as well as the enormous problem of accounts reconciling using this system make the platform inefficient and


not


scalable beyond a cer- tain size. Unfortunately, some companies have found this to their peril, and have become inopera- ble because of their flawed model, leaving their drivers without a card payment solution and out of pocket as a result.


Thankfully, there are firms who have adopt- ed a far more up-to-date, automated approach to card pay- ments within the taxi industry. One such firm is CabCard Serv- ices, which was established in 2006 and has gone from strength to strength, providing a first-rate card payment solution to thousands of driv- ers and fleets across the UK and Ireland. Richard Akitt, Cab- Card’s financial director, explained why his company’s business model works so well for drivers: “Because our system operates on a cen- tralised basis, our service is totally scala- ble. All our financial, accounting and cus- tomer service expertise acts as a cohesive unit from one place, and paying directly to our drivers’ bank accounts has allowed us to provide


OCTOBER 2010 PHTM


our service throughout the length and breadth of the UK and in Ire- land too. Recently, we’ve also added the facility to pay drivers their fares directly to a prepaid Visa card, called the CabCash card because it makes card transactions behave just like cash payments. This is great for three rea- sons:


“First, it means we can cost-effectively pay drivers more than once per week on a daily basis, as soon as the payment clears our bank. This eases the cashflow problems drivers can face when other providers pay them monthly or fort- nightly.


“Second, the ability to pay drivers directly onto a prepaid card is fantastic for fleet man- agers, who can slash their administration costs by paying indi- vidual account work automatically and even collecting despatch rentals using the cards.


“Third, our card offer- ing has various consumer- facing developments, includ- ing loyalty-style rewards systems for passengers, which help drive more busi- ness into the taxi trade and lets firms develop their customer-base more competitively.” CabCard’s innovative and highly-tailored approach to card pay- ments has earned them plaudits from across the taxi indus- try and elsewhere, including from driving instructors throughout the UK who benefit from the CabCard service.


CHIP & PIN Technology


When it comes to tak- ing cards, the most important issue is security. It’s in every- body’s interests to


protect card payments against fraud, from the cardholder (passen- ger) and the merchant (driver) to the bank. Card fraud is a serious crime in the UK, with card fraud losses in 2009 totalling £440.3m in 2009 (UK Cards Association figures). You need to make sure that you’re using a secure card payment method, because if you don’t you might find you’re liable for the costs of fraudulent transactions. You should always check that the hard- ware you’re using to take cards is fully compliant with PCI DSS, a set of security standards which aims to dramatically reduce card fraud. This is par- ticularly relevant to fleet operators who are trying to take cards using their own Merchant ID (MID). If your hardware isn’t PCI compliant, you could find yourself at risk of large fines imposed by your bank, or being placed on an inter-bank blacklist (losing future ability to take cards) if you fall victim to fraud or disingenuous pas- sengers who use chargebacks to with- draw payment after the journey is over. Again, there are vari- ous hardware options available, and some are far more secure than others. For instance, some taxi fleets use an old-style swipe slot which inte- grates with their despatch system. This leaves card details open to interception over the open radio frequencies, and since it isn’t Chip & PIN, you could be liable for fraudulent transac- tions.


The increasing popu- larity of smartphones has led to the intro- duction of various payment ‘apps’ which


at first glance seem to be a cheap solution to taking mobile card payments. Unfortu- nately, it is very difficult to assess to what extent these devices are PCI com- pliant, since a mobile phone can easily be compromised by hackers, and these ‘apps’ invariably have no Chip & PIN facility, which again could leave you vulnerable to fraud. Perhaps more importantly, driv- ers often note that customers feel uncomfortable putting their card details into their taxi driver’s mobile phone, and the whole process (usual- ly slow, as dictated by mobile phone recep- tion) smacks of an unprofessional ap- proach – not least because the device can’t even print them a receipt.


In view of all this, per- haps the best solution on the market today in terms of hardware comes from those firms who provide a basic secure mobile Chip & PIN terminal, of the sort used in most shops. These devices, which are totally wire- less and linked to individual drivers (not installed to a particular vehicle) are secure, PCI-compliant hard- ware which take payment in seconds and provide receipts for both passenger and driver. They can be removed from a vehicle between shifts, and, as is the case with firms like Cab- Card Services, linked directly to a driver’s bank account or pre- paid card. Not only that, the fact that this type of card terminal is already common- place, with passengers already accustomed to using them in shops, pubs and other businesses, means that they’re


already comfortable with the technology and know that it’s secure. This has the added bonus of enhancing the driver’s or fleet’s professional image.


In short, we believe that a simple Chip & PIN terminal, as pro- vided by CabCard Services, is by far the most elegant, robust and secure solution for taking card pay- ments in today’s taxi industry – one which carries clear benefits to passengers and drivers, as well as fleet administrators. Re- member that above all, security and protec- tion against card fraud should be your para- mount concerns when choosing a card provider; as APACS spokeswoman Jemma Smith points out, “His- tory shows that fraudsters target the weakest link in the chain.” Those who do not adopt the Chip & PIN system are likely to attract card crimi- nals who will target the weakest links.


Overall, drivers seem to be very impressed with the service pro- vided by CabCard Services, and their innovative payment system and high quali- ty customer service certainly seems to have a good deal of mileage. The firm encourages cus- tomers to shop around because they know their offering is absolutely first-rate, and their fees and pricing structure are very easy to under- stand and completely transparent – they’re certainly not playing their cards close to their chest.


For more information on their services, visit www.paycabs.com or call CabCard on 0845 491 8410. See advert on page 27.


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