Square abruptly halts NYC taxi payment system trial
Square has abruptly shut down Checker, a pilot service enabling New York City taxi passengers to more efficiently pay their fare via credit card.
In a letter to New York's Taxi and Limousine Commission obtained by The New York Post, Square told officials it plans to overhaul Checker in light of new rules designed to legislate credit card payments in cabs. The new TLC guidelines would allow any company in compliance to offer payment services in NYC taxis.
"Square has determined, in light of developments in prospective taxicab regulations in New York and other markets, and based on what we have learned conducting the pilot program to date, that we wish to pursue a different hardware and software solution," Square wrote.
The Checker trial--launched in March and slated to run until Feb. 15, 2013--leveraged an Apple (NASDAQ:AAPL) iPad tablet encased in a black metal sleeve connected to a credit card swipe unit. As the cab traveled to its destination, the iPad displayed real-time navigation data tracking the location, route and fare; passengers could swipe their card even prior to arrival, signing the iPad screen with their finger to authorize payment and transmitting a receipt to their mobile phone via email or text message. While cabbies must wait as long as 30 days to receive payment from conventional card transactions, Square vowed to deposit all payments in the driver's bank account the next day.
The New York Post notes that Square's deal with the TLC gave the payments firm the flexibility to end the Checker program at its discretion, without the agreed-upon 45-day notice period. Square also must fund the installation of new payment systems for all cabs participating in the pilot, which could cost more than $40,000 in total.
As of June 2012, more than 2 million businesses and individuals across the U.S. are using Square's mobile payment services--the firm now processes more than $8 billion in payments on an annualized basis, up from $1 billion just a year ago. Beginning this fall, Starbucks' 7,000 company-owned U.S. stores will begin processing all credit and debit card transactions using Square technologies, a move to slash operational costs.
- read this New York Post article
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