Taxi and private-hire businesses can accept payments in several different ways, including fixed card terminals, mobile card machines, Tap to Pay, in-app payments, online bookings and corporate-account payments.
The right payment setup depends on whether the business is an individual driver, taxi fleet, private-hire operator, chauffeur company or booking platform, and on who actually takes the passenger's payment.
There is also an important distinction between taxis and private-hire vehicles. In England and Wales, private-hire journeys must be pre-booked, whereas taxis can also be hailed in the street or hired from a taxi rank.
London taxis have additional payment requirements. Transport for London requires licensed London taxis to have an approved fixed card-payment system fitted in the passenger compartment. A handheld reader or Tap to Pay solution alone does not satisfy that requirement.
Merchant Advice Service helps taxi, private-hire and transport businesses understand their payment requirements before comparing payment providers.
What payment services do taxi and private-hire businesses need?
The answer depends heavily on the way the business operates.
An individual driver may simply need a reliable way to take card payments in the vehicle.
A larger operator may need to manage:
- hundreds of drivers;
- app bookings;
- telephone bookings;
- online payments;
- corporate accounts;
- airport transfers;
- advance payments;
- card-present payments;
- multiple locations;
- driver payouts;
- refunds;
- tips;
- reconciliation; and
- integration with dispatch software.
This means a taxi payment requirement can range from a single mobile card machine to a much broader integrated payments project.
Taxi versus private hire: why the distinction matters
Taxis and private-hire vehicles do not operate in exactly the same way.
In England and Wales, a private-hire vehicle can only undertake journeys that have been pre-booked through a licensed operator.
A licensed taxi can also be:
- hailed in the street;
- hired from a taxi rank; or
- booked in advance.
This distinction can affect the payment journey.
A taxi passenger may enter the vehicle without any previous relationship with the driver and pay at the end of the journey.
A private-hire customer may instead:
- book through an app;
- book through a website;
- telephone an operator;
- have a card stored securely against an account;
- pay before the journey; or
- be invoiced through a corporate account.
The payment provider therefore needs to understand the complete booking and payment model.
Card machines for taxi drivers
For many drivers, the simplest requirement is a card terminal that can operate reliably in a vehicle.
Possible options include:
- fixed in-vehicle terminals;
- portable card machines;
- mobile card terminals using a cellular connection;
- smart payment terminals;
- integrated taxi payment systems; and
- Tap to Pay on compatible smartphones where permitted and appropriate.
The best option depends on the licensing requirements applying to the driver as well as the commercial payment requirement.
Drivers should consider:
- mobile network connectivity;
- battery life;
- charging in the vehicle;
- contactless acceptance;
- Chip and PIN;
- mobile wallets;
- receipt requirements;
- settlement;
- transaction charges;
- monthly terminal costs;
- technical support; and
- local licensing rules.
Our Card Machines guide explains the wider differences between terminal types.
London taxis and TfL card-payment requirements
Licensed London taxis have specific card-payment requirements set by Transport for London.
TfL's current vehicle inspection requirements state that all licensed London taxis must have an approved card-payment system fitted in the rear passenger compartment.
The device must be an approved system and securely installed in accordance with TfL requirements.
TfL also states that handheld units are not approved devices for satisfying the London taxi licensing requirement.
The current TfL taxi fare information confirms that approved card-payment devices must accept, as a minimum:
- Visa;
- Mastercard;
- American Express; and
- contactless payments.
A printed receipt must also be available when requested by the passenger.
This means London taxi drivers should not select a payment system solely because it has a low transaction rate or can run on a smartphone.
The driver must first confirm that the system meets the current TfL approval and installation requirements.
London taxi driver?
A handheld card reader or Tap to Pay solution alone does not replace the TfL-approved fixed card-payment system required in a licensed London taxi.
Always check the current TfL approved-device and vehicle-licensing requirements before changing payment equipment.
Can London taxi drivers use Tap to Pay?
Tap to Pay allows a compatible smartphone to accept contactless cards and supported mobile wallets without a separate traditional card reader.
However, for licensed London taxis, Tap to Pay on a phone should not be confused with TfL's mandatory taxi card-payment setup.
TfL requires an approved fixed card-payment system in the passenger compartment.
A smartphone-based Tap to Pay solution by itself therefore does not meet that London taxi requirement.
Drivers elsewhere in the UK may have more flexibility, subject to the rules imposed by their own licensing authority and payment provider.
Read our Tap to Pay UK guide for more information about accepting contactless payments using a compatible smartphone.
What about taxis outside London?
Taxi and private-hire licensing outside London is generally administered by local licensing authorities.
Payment requirements can therefore differ between areas.
A driver should check the conditions attached to their:
- taxi vehicle licence;
- private-hire vehicle licence;
- driver licence; and
- operator licence where applicable.
Do not assume that the TfL rules automatically apply across the whole UK.
Equally, a payment method permitted elsewhere should not be assumed to meet the requirements for a licensed London taxi.
Tap to Pay for taxi and private-hire drivers
Outside situations where a fixed approved device is mandatory, Tap to Pay can provide another way to accept face-to-face contactless transactions.
A compatible smartphone can act as the contactless payment acceptance device.
This can potentially suit:
- individual private-hire drivers;
- chauffeurs;
- small transport businesses;
- drivers requiring a secondary mobile workflow where permitted; and
- businesses that do not want to carry a separate reader.
Before relying on Tap to Pay, check:
- licensing requirements;
- device compatibility;
- mobile-data availability;
- transaction limits;
- PIN functionality where supported;
- receipt options;
- pricing; and
- settlement.
Mobile connectivity for taxi card payments
A taxi moves between locations constantly, so connectivity matters more than it does for a fixed retail counter.
Drivers can pass through:
- areas with weak mobile signal;
- underground or covered pickup areas;
- airport terminals;
- rural roads;
- large railway stations;
- city-centre dead spots; and
- venues with unusually congested mobile networks.
A payment terminal that is inexpensive but frequently unable to complete transactions may not be good value.
When comparing equipment, ask:
- which mobile networks the terminal uses;
- whether it can switch between networks;
- whether Wi-Fi can be used as an alternative connection;
- how failed transactions are displayed;
- what happens if connectivity returns later; and
- what support is available if the terminal repeatedly loses service.
Drivers should not repeatedly submit the same uncertain payment without knowing whether the first transaction succeeded, as this can create duplicate-payment problems.
Private-hire app payments
Private-hire operators may collect payment inside a booking app rather than in the vehicle.
A typical journey can look like:
customer creates booking → fare estimated → card details securely tokenised → journey takes place → final amount confirmed → card charged → receipt issued → operator and driver records updated
This is a significantly different payment model from a driver entering a fare into a standalone card terminal.
The operator may need:
- online or in-app card processing;
- tokenisation;
- stored-payment functionality;
- Apple Pay and Google Pay;
- 3D Secure where applicable;
- pre-authorisation capability;
- post-journey adjustment;
- refund functionality;
- driver allocation;
- reporting;
- fraud controls;
- API integration; and
- reconciliation.
Who is the merchant: driver, fleet or operator?
This is one of the most important questions in taxi and private-hire payments.
The payment provider needs to understand who is selling the transport service and who is taking the passenger's payment.
Different models can include:
Individual-driver model
The driver contracts with the passenger and accepts payment into their own merchant account.
Fleet or operator model
The passenger books with the operator, the operator processes the payment and the driver is paid separately according to the commercial agreement.
Booking-platform model
A technology or booking platform may facilitate the transaction between passenger and transport provider.
This can introduce more complex payment issues where money needs to be allocated, commissions retained or multiple parties paid.
A standard merchant account should not be used as an improvised method of taking money on behalf of unrelated businesses without discussing the structure with the payment provider.
Where the model involves multiple underlying businesses or driver payouts, explain the payment flow before selecting the provider.
Taxi fleets and multi-driver payments
A taxi company managing multiple drivers usually needs more than several unrelated card readers.
The business may want:
- one central provider relationship;
- multiple terminals;
- terminal-to-driver assignment;
- vehicle-level reporting;
- driver-level reporting;
- central settlement;
- individual merchant IDs where appropriate;
- automated reconciliation;
- refund controls;
- user permissions; and
- multi-location management.
The best account structure depends on who the merchant is and how the drivers are contracted.
A fleet with employed drivers can have a different payment structure from an operator working with independent drivers who each operate their own businesses.
Find Suitable Payment Providers
Integrating payments with taxi dispatch software
Larger taxi and private-hire operators may use dispatch software to manage bookings, vehicles and drivers.
Connecting payments directly to this system can reduce manual administration.
A good integration may connect:
booking → passenger → journey → driver → fare → payment → refund → settlement → reconciliation
Before choosing a payment provider, establish:
- which providers the dispatch system already supports;
- whether payments are embedded or redirected;
- whether the system supports stored cards;
- who controls the customer token;
- whether payments can be migrated if the provider changes;
- how refunds are handled;
- how drivers are identified;
- how commissions are recorded;
- how settlement data is reconciled; and
- whether an API is available for more complex requirements.
Our Integrated Payments guide explains the wider questions businesses should consider before connecting payment processing with operational software.
Booking-system payments
Some operators use external booking systems rather than building their own technology.
The booking software may control:
- journey booking;
- customer records;
- fare quotation;
- driver allocation;
- payment;
- confirmation;
- receipts;
- cancellations; and
- refunds.
Before switching merchant provider, establish whether the booking software restricts which payment providers can be used.
Read our Payment Providers for Booking Systems guide.
Advance payments and airport transfers
Airport transfer and chauffeur businesses may take payment before the journey takes place.
For example:
customer books airport transfer → fare quoted → card payment taken → journey scheduled → driver allocated → service delivered
The provider may want to understand:
- how far ahead customers normally book;
- whether payment is taken in full;
- cancellation policy;
- refund policy;
- average transaction value;
- maximum transaction value;
- customer countries;
- business versus consumer bookings; and
- chargeback history.
The longer the period between payment and service delivery, the more important it is to describe the business model accurately during underwriting.
Pre-authorisation for taxi and chauffeur bookings
Some transport businesses may want to authorise an estimated amount before the final fare is known.
A pre-authorisation can temporarily reserve an amount against a customer's available card funds, subject to the provider, card scheme and transaction setup.
The final transaction can then be completed for the appropriate amount where the payment setup supports it.
This can potentially be relevant where:
- the exact fare is not known at booking;
- waiting time may apply;
- additional journey charges are possible; or
- the operator wants to verify the payment method before dispatching a vehicle.
Businesses should use the provider's supported authorisation and completion process rather than simply charging arbitrary additional transactions after the journey.
Corporate taxi accounts
Taxi and private-hire companies may also provide transport to corporate customers.
Examples include:
- law firms;
- hotels;
- healthcare organisations;
- airlines;
- local businesses;
- financial-services firms;
- events companies;
- universities; and
- public-sector organisations.
Corporate customers may not pay the driver directly after each journey.
Instead, the operator might:
- hold a corporate card securely against an account;
- invoice weekly or monthly;
- provide journey-level reporting;
- allocate journeys to departments or cost centres; or
- collect payment centrally.
This means the business may need both card processing and strong invoicing/reconciliation functionality.
Hotel, airport and concierge bookings
Taxi and chauffeur businesses may receive bookings through third parties such as hotels, concierges or travel partners.
The payment flow should be clear.
Questions include:
- Does the passenger pay the driver?
- Does the hotel collect payment?
- Does the taxi operator invoice the hotel?
- Is commission paid to the booking partner?
- Who handles a refund?
- Whose name appears on the passenger's card statement?
If multiple businesses are involved in collecting or distributing the customer's money, explain this to the provider before processing begins.
Tips and gratuities
Some payment terminals and integrated taxi systems allow passengers to add a tip.
Where gratuity functionality is required, check:
- whether tipping is supported;
- whether fixed percentages or custom amounts can be shown;
- how tips appear in reporting;
- whether tips settle with the main transaction;
- how driver-level tips are reconciled; and
- how the business handles onward payment to drivers.
The payment system should make it easy to distinguish the fare from the gratuity for reporting purposes.
Receipts for taxi payments
Receipt requirements can depend on the licensing framework and payment setup.
For licensed London taxis, TfL requires the approved system to support printed receipts when requested.
Other taxi and private-hire businesses may use:
- printed receipts;
- email receipts;
- SMS receipts;
- in-app receipts; or
- corporate journey statements.
The receipt should allow the customer to recognise the transaction and understand who has charged them.
Card-statement descriptors
The statement descriptor is the name or description that may appear against the transaction on the passenger's card statement.
A recognisable descriptor can help reduce unnecessary payment disputes.
A passenger who booked with “ABC Cars” but sees a completely unrelated legal entity on their card statement may be more likely to question the transaction.
When setting up the merchant account, ask the provider:
- what descriptor will appear;
- whether it can reflect the trading name;
- whether a phone number can be included where supported; and
- how multiple brands or fleets are handled.
Chargebacks in taxi and private-hire businesses
A cardholder can dispute a transaction through their card issuer.
Taxi and private-hire disputes can involve:
- unrecognised transactions;
- fraudulent card use;
- duplicate charges;
- cancellation disputes;
- refund disagreements;
- arguments over the fare;
- claims that the journey did not take place; or
- disagreement about additional charges.
Good payment and journey records can help the business respond appropriately.
Useful information can include:
- booking confirmation;
- pickup and destination information;
- journey date and time;
- driver record;
- fare calculation;
- payment receipt;
- customer correspondence;
- cancellation records;
- refund records; and
- other relevant journey evidence.
Read our Chargeback guide for more information.
PCI DSS for taxi payments
Taxi, private-hire and transport businesses accepting card payments need to understand the PCI DSS requirements relevant to their payment environment.
PCI DSS provides technical and operational requirements intended to protect payment-account data.
Physical payment terminals themselves form part of the cardholder-data environment because they capture and transmit payment information.
Drivers and operators should avoid storing card data in inappropriate systems such as:
- dispatch notes;
- driver messages;
- paper notebooks;
- spreadsheets;
- emails;
- CRM notes; or
- unapproved mobile applications.
Where a passenger card needs to be used for future bookings, the business should use appropriate provider-supported tokenisation or stored-payment functionality rather than retaining the raw card details itself.
Settlement times for taxi businesses
Settlement is the process through which completed card-payment funds reach the business bank account.
The timetable varies between providers.
Taxi businesses should establish:
- standard settlement period;
- whether faster settlement is available;
- whether faster settlement costs extra;
- what happens over weekends;
- what happens on bank holidays;
- whether in-app and terminal payments settle together;
- whether refunds affect settlement; and
- how driver payouts are funded.
Fast settlement can matter where a driver or fleet has significant daily costs such as fuel, vehicle hire, insurance and driver payments.
Reconciliation for taxi fleets
For larger operators, reconciliation can be more important than the headline transaction rate.
The finance team may need to match:
booking → passenger → driver → vehicle → fare → tip → payment → provider fee → settlement → driver payment
If those records sit in several disconnected systems, significant manual work can be required.
A fleet should therefore compare:
- transaction reporting;
- driver IDs;
- vehicle IDs;
- booking references;
- terminal identifiers;
- settlement reports;
- refund data;
- chargebacks;
- tips;
- fees; and
- accounting integration.
Multi-site taxi and private-hire operators
A larger operator may work across several towns, offices or licensing areas.
The payment infrastructure may need to support:
- separate fleets;
- different merchant IDs;
- multiple bank accounts;
- regional reporting;
- central administration;
- different trading brands;
- different dispatch systems; and
- different licensing requirements.
This should be designed before the provider is chosen rather than adding unrelated merchant accounts as the company expands.
How much does taxi card processing cost?
There is no single UK taxi card-processing rate.
Costs can depend on:
- monthly card turnover;
- transaction volume;
- average fare;
- consumer versus commercial cards;
- UK versus international cards;
- card-present versus app payments;
- terminal requirements;
- integration;
- settlement;
- provider pricing model; and
- contract structure.
Possible costs include:
- transaction fees;
- interchange and scheme costs;
- provider margin;
- terminal rental;
- gateway charges;
- authorisation fees;
- monthly account fees;
- PCI-related charges;
- refund charges;
- chargeback fees;
- international-card costs; and
- integration charges.
Read our Merchant Account Fees guide for more information about the different components of card-processing cost.
Why fixed transaction fees matter for taxi businesses
Taxi businesses can process a relatively high number of lower-value transactions.
This makes fixed per-transaction charges particularly important.
For example, a fixed 10p charge represents:
- 1% of a £10 transaction;
- 0.5% of a £20 transaction; and
- 0.2% of a £50 transaction.
This is why a provider advertising a low percentage does not necessarily have the lowest effective cost for a taxi fleet.
The business should compare pricing using its actual transaction volume and average fare.
Should taxi drivers choose a card machine with no monthly fee?
That depends on the driver's transaction volume and the complete pricing structure.
A no-monthly-fee provider may suit a low-volume driver, but another provider charging a monthly terminal rental could potentially offer a lower transaction rate.
Compare:
- monthly fee;
- transaction percentage;
- fixed transaction charge;
- terminal cost;
- minimum monthly charge;
- settlement;
- contract term;
- support; and
- replacement-terminal arrangements.
For a working taxi driver, downtime also has a cost. A cheap terminal with poor support may be expensive if the driver cannot take payments.
What happens if the card terminal fails?
Taxi businesses should have a documented process for payment-terminal failure.
Possible issues include:
- terminal battery failure;
- mobile-network outage;
- damaged equipment;
- software errors;
- provider outage;
- expired SIM or connectivity problems; and
- hardware replacement.
Before choosing a provider, ask:
- Is telephone support available while drivers are working?
- How quickly is faulty equipment replaced?
- Can a replacement terminal be sent next day?
- Can the business see whether a failed-looking payment actually completed?
- Is there an approved alternative method if the primary device fails?
London taxi drivers should pay particular attention to TfL requirements because the approved fixed payment system forms part of the vehicle licensing requirements.
What information will a payment provider ask for?
Requirements depend on the provider and business model.
Information may include:
- business or company details;
- driver or operator licensing information;
- owners and directors;
- business bank account;
- time trading;
- number of vehicles;
- number of drivers;
- monthly card turnover;
- average transaction value;
- maximum transaction value;
- card-present versus online volume;
- corporate-account activity;
- customer countries;
- processing statements;
- refund history;
- chargebacks;
- dispatch or booking software;
- terminal requirements; and
- existing payment provider.
What should taxi fleets compare between payment providers?
Compare the complete operating requirement rather than one card-processing percentage.
Consider:
- terminal options;
- mobile connectivity;
- TfL approval where applicable;
- Tap to Pay;
- online and in-app payments;
- stored-card capability;
- dispatch-system integration;
- API availability;
- corporate accounts;
- driver and vehicle reporting;
- tips;
- refunds;
- chargeback management;
- settlement;
- reconciliation;
- terminal replacement;
- support hours;
- contract length; and
- total processing cost.
Find Suitable Payment Providers
Choosing a payment provider for a taxi or private-hire business
Start by mapping the complete payment journey.
For an individual driver, that might be:
passenger journey → fare confirmed → card tapped or inserted → payment approved → receipt → settlement
For a larger private-hire operator, it could be:
booking → passenger account → fare estimate → driver allocated → payment authorised → journey completed → final payment → receipt → settlement → driver reconciliation
Then identify:
- who is the merchant;
- who receives the money;
- how drivers are paid;
- how passengers book;
- how passengers pay;
- whether cards need to be securely stored;
- whether payment integrates with dispatch software;
- which licensing requirements apply;
- how payments are reconciled; and
- what happens when equipment or connectivity fails.
This gives a much better basis for comparing providers than searching for the lowest advertised taxi card-machine rate.
Merchant Advice Service helps businesses understand their payment requirements before introducing them to providers that may be suitable.
Sources & References
About Merchant Advice Service
Merchant Advice Service (MAS) provides independent information, comparison and provider-matching support for UK businesses looking for payment services.
We help businesses understand their payment requirements before introducing them to providers that may be suitable. MAS does not provide payment processing services directly.
Disclosure: Merchant Advice Service may receive commission from payment providers following a successful introduction. This does not increase the price paid by the merchant and does not determine which providers are included in our editorial guidance.
