Visa set to disembark from every S'pore taxi
VISA cards will no longer be accepted in any Singapore taxi from next month after SMRT, the last taxi operator to have the credit card payment option, withdrew it from its cabs.
Visa is phasing out the service on SMRT's cabs to uphold its "no surcharge protection policy".
The change, to take effect next Thursday, is the latest in a longstanding wrangle between Visa and cab companies, which do not want to budge on their 10 per cent levy for credit card payments.
ComfortDelGro, TransCab and Prime stopped accepting Visa cards in July, after discussions failed to reach a desired outcome. Premier also ceased the payment option last month.
Payment through other credit and charge cards continues to attract a 10 per cent fee.
Visa told My Paper yesterday that its operating rules prohibit surcharging as this penalises card holders.
Seah Seng Choon, executive director of the Consumers Association of Singapore (Case), said the latest news was "disappointing" and "a step backwards" in Singapore's move towards more cashless transactions.
"Right now, both parties are looking at it from a cost point of view," said Mr Seah, who hopes cab companies and Visa can come to the table again to negotiate.
Cab companies said in reports last year that the surcharges are to cover a fee that they have to pay banks for every card transaction - estimated to be between 2 and 3 per cent.
Besides bank fees, there are also telco charges and costs incurred in investing in and maintaining the cashless payment terminals and services, ComfortDelGro spokesman Tammy Tan said then.
The system involved a "sizeable investment" of about $10 million, Ms Tan added.
It is understood that Visa and SMRT were in discussions to come up with a smaller surcharge fee late last year but they were unable to reach an agreement. "The decision to stop Visa acceptance is always a last option," said Visa.
SMRT's director of media and marketing communications, Alina Boey, said notices will be put up in its taxis to inform customers of the changes. "We apologise for the inconvenience caused," she added.
Payment firm MasterCard said it "does not encourage surcharging" but it recognises the need to "balance giving consumers payment choices and managing the cost of card acceptance".