Part D – Understanding and improving industry performance (PDF ...

In addition, given the well established and widespread
use of non-cash payment mechanisms, the inquiry is
sceptical that taxi operators would cease to accept
electronic card payments given a lower surcharge.
One reason is that taxi operators and drivers derive
considerable benefit from having fewer cash transactions.
Another is that it would cause them considerable
detriment and be inconsistent with the way other retailers
have behaved when faced with no specific benefit flowing
to them from card acceptance, other than the benefit it
provides to their consumers.
Accordingly, the inquiry is strongly minded to recommend
regulating service fees to a level that reasonably reflects
the resource cost of providing this service, without taking
into account the financial flows between payments
processors and taxi operators and networks. The inquiry
has seen no evidence to suggest that an electronic
payment service fee should be greater than five per cent.
Inquiry finding
è The current 10 per cent service fee for
processing electronic payments is excessive
and imposes a high cost on consumers. There
appears to be a strong case for regulating the
service fee to a level that reflects the resource
cost of providing this service – approximately
five per cent of transaction value.
Understanding industry performance CUSTOMERS FIRST 263