SINGAPORE — Transcab has become the second taxi operator which will soon no longer offer consumers the option of paying by Visa, after it refused to remove the 10 per cent administrative fee it applies to fares. The move will take effect on Monday, affecting the 4,484 taxis that the second-largest cab operator here has on the roads.

Announcing this via a press statement yesterday, Visa explained that its decision to sever ties with both Transcab and ComfortDelGro — Singapore’s largest taxi company — was to uphold its no-surcharge policy, “which protects cardholders from paying additional fees simply for using their payment cards of choice.”

A check with SMRT, however, revealed that it is still accepting Visa cards for payment, while applying the 10 per cent surcharge. SMRT is the third-largest operator here, with 3,257 taxis on the road.

On Wednesday, TODAY reported that ComfortDelGro had informed its cabbies that consumers will no longer be able to pay for their rides using their Visa cards, after the transport operator was told to stop imposing surcharges. Those who use credit and debit cards now pay 10 per cent extra, excluding Goods and Services Tax — a breach of contract terms, according to Visa.

Visa Country Manager for Singapore and Brunei Ooi Huey Tyng said yesterday that its no-surcharge policy was created specifically to “shield consumers from merchants” who seek to impose surcharges and penalise consumers who choose Visa over other forms of payment. “Surcharging unfairly shifts the cost of doing business onto consumers,” she added, even though the company did not respond to queries on why SMRT is allowed to continue to do so.

Pointing out consumers such as tourists who may not have Singapore dollars on them when they first arrive, Mr Seah Seng Choon, Executive Director of the Consumer Association of Singapore (CASE) said consumers will be inconvenienced by having one fewer form of cashless payment they can make to the two largest taxi operators here.

Said Mr Seah: “We certainly hope that Visa and the taxi companies can come together to sort out their problems and work on a suitable solution so that any inconvenience to consumers can be minimised.”

Transcab General Manager Jasmine Tan said its cabbies will be informed today that they will not be able to accept cashless payments via Visa cards, but added that consumers can still pay by MasterCard or Nets.

She said: “With cashless payments, we are actually helping the drivers to collect the money on their behalf, process it in the back end, and then return to the drivers. The 10 per cent surcharge includes the bank surcharge, operation costs and other miscellaneous costs to process all these. (It) is actually not enough to cover our cost.”

SMRT Taxis, meanwhile, is evaluating the “cost-benefit analysis” regarding this matter. “Meanwhile, our taxis will continue to accept payment for fares via VISA credit cards until further notice. The admin charge of 10 per cent of the fares will also continue to apply,” said SMRT Senior Vice-President for Roads Benny Lim.

Mr Seah said SMRT will now have to justify why it is still imposing the surcharge, since Visa has come out publicly to emphasise its no-surcharge policy.

Ms Julienne Loh, MasterCard Worldwide’s Singapore Country Manager, acknowledged that “a fine balance” has to be struck between giving consumers payment choices and managing the cost of acceptance”.

“We are continually working with merchants — including ComfortDelGro — to bring down the overall cost of acceptance over time, though we are in the early days of this effort yet,” she added.

Visa has indicated that it “remains open to working with ComfortDelGro and other taxi companies” to “further to review their surcharging practices”.