Taxis and their Hidden Role in Driving Behaviour Change

Like many people I end up travelling quite a lot to different countries and what has become noticeable is where the Taxis take cards; that is what taxis take cards and what they charge. Now why this small point of detail; well in many emerging Debit cards are used once or twice a year by the population. A key challenge is how to get debit cards to the front of the wallet and used more often. Further, how to get the population at large understanding that Debit cards are not just ATM cards, they can and ideally should be used at POS, wirtes David Parker

Like many people I end up travelling quite a lot to different countries and what has become noticeable is where the Taxis take cards; that is what taxis take cards and what they charge. Now why this small point of detail; well in many emerging Debit cards are used once or twice a year by the population. A key challenge is how to get debit cards to the front of the wallet and used more often. Further, how to get the population at large understanding that Debit cards are not just ATM cards, they can and ideally should be used at POS, writes David Parker

With the introduction of MPos solutions I have given up the number of times banks have told me one of the key groups they will be targeting is Taxi Drivers. Taxi drivers, especially those of course working international airports, are seen as the ideal customers with great opportunity to convert their current cash transactions to cards.

It is worth noting when you look at developed markets the difference in experience you see; In New York talking to several taxi drivers they advised that their ‘garages’ had in the last 6 – 12 months gone over from surcharging for card use to making it free. The result, they all said 70%+ of their fares now pay by card, Sweden was the same, no surcharge on card use and high use by consumers. The UK on the other hand charge 10 – 15% surcharge, usage they will tell you is very low; mainly late at night when people have run out of cash or the occasional businessmen charging to expenses.

So if we look at developing markets, it will be interesting to see as (I say as rather than if) MPOS roles out to taxi drivers how will it work, will they surcharge, will they offer it for free to their customers. The reason I raise this as Taxi drivers are one of those great groups of people that have the real ability to change behaviour, the ability for populations to get into the habit of swiping/tapping with their card for the journey. No need to carry cash, a quick swipe and the fare is paid.

And here I will make a prediction, in those markets where Taxis end up offering this with no surcharge we will start to see a much stronger uptake in Debit card usage generally at POS. In those where Taxi drivers, and for that matter retailers generally, as MPOS rolls out, surcharge will not see that big move of Debit cards to POS usage.

MPos offers the real opportunity for micro merchants to accept cards and in turn drive a population to understand how debit cards are more than just ATM cards. On the other hand if we see in some markets surcharging by these micro-merchants using MPOS there is likely to be a far lower conversion. A common sense statement maybe, but one that is crucial in the ‘war against cash’; when retailers in emerging markets surcharge card use is discouraged. But even in those markets where they do not the challenge to date has been to get the population to see Debit cards as more than just ATM cards and in this Taxis can play a major role.