South Africa's taxi industry transitioning to digital payments

mylesillidge

mylesillidge

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Major South African industry saying goodbye to cash

South Africa’s taxi industry is transitioning from cash to digital payments, a move that could increase value, efficiency, and safety for drivers and passengers.

South Africa is on track to become cashless, with the Reserve Bank targeting reducing the use of cash in the local economy by modernising the national payment system and educating people on the benefits of digital payments.
 
Will the introduction of a small transaction fee by the service provider for taxi owners result in an increase in passenger taxi fares, such as paying R16 with tap-to-pay instead of R15 with cash, effectively adding a 6% charge?
 
Pythonista said:
Cash is NOT gonna go away - any time. As long as people can evade/avoid paying tax by using cash, they will.
Click to expand...

This is the answer to this:

Given the number of benefits the digital transition has to offer the taxi industry, it raises the question of why it hasn’t happened yet.
Click to expand...
 
All these "cashless future" articles are punted and the dreams of those with vested interests in cashless payments. First Payshap featured in these articles and this one is by Waxd Solutions. SARS, the banks and the Reserve Bank would love the country to go cashless.

According to the banks, cash isn't going away. They have done market research and surveys. Only the cities run a big cashless community. Travel out of a city and you will be charged about 10% for using a card. Forget using your phone to pay. Illegal immigrants can't open bank accounts and SASSA recipients draw all their cash at once so that they can see how much they have left. Something the arithmetic challenged can't do with digital.
 
No 1 reason for using cash is to evade tax. I'm surprised the article doesn't even mention this very obvious reason.
 
legitimize and taxis should not go together in the same sentence.

taxi mafias getting more power and deciding to take cards but add 10% to each transaction for "processing"
sounds more legitimate, for the few taxis that will carry a yoco device.
 
R2k/pm plus fees, the enablement of tax collection, the ability for drivers to overcharge as the feel fit, all these factors tell me this particular cashless attempt is also set to fail.

A friend and I recently sat for ages discussing who would succeed in this space with cashless.

Ultimately we landed on: either nobody, or a system that doesn't charge fees per transaction, could possibly be app based for NFC enabled phones or (ultimately) cheap terminals that could eventually come to market at once off fees where they pay for their own SIM cards, where the cash collected is quickly and easily accessible to drivers and owners, and possibly a data-free companion app for commuters to get basic information about their taxi such as is it on time for the route it generally follows (without realtime tracking on a map for safety, though perfect world that would be great), their transaction history, and a hassle free scan, tap, or find and pay by taxi ID option in the app.

The companion app serving ads could fund a lot of the services and potentially make up for the lack of transaction fees and potentially device fees for select fleets/drivers.

A companion app for taxi owners or fleet owners to monitor their taxis in near real-time, monitor income, potentially communicate with their drivers if necessary, and more.

Dropping as many transactional fees as possible is the only way to convince the drivers and owners. Not to mention the riders. They cannot afford any further fees directly by the system nor can they afford the risk that the drivers/owners up prices to make up for the fees if charged to them.

The biggest blocker of all is tax.
Cash allows many, granted not all, but many owners to either never declare or under declare income when approached by tax collection.

Having this system reduces their ability to save and make more money.
The only avenue this potentially makes them more money is by possibly opening them (back) up to commuters who have moved away from taxis because they don't want to deal with cash or for safety reasons but also still find it more affordable to use a taxi than their alternative.
It may also become a necessity as banks and government force citizen's into a banked world with digital payments and cash free environments.

I just don't see the tax blocker being avoided in any implementation of these cashless systems (for good and legal reasons of course) but it's simply not an option for many of these taxi operators.
 
Great initiative. Should be sorted by the time my cats graduate from college.
 
Mystic_ZA said:
R2k/pm plus fees, the enablement of tax collection, the ability for drivers to overcharge as the feel fit, all these factors tell me this particular cashless attempt is also set to fail.
Click to expand...

Waxd Solutions, who are the subject of this Op -Ed, want to rent out a tap to pay terminal to each taxi for R2000 a month and charge a transaction fee per transaction. Ain't gonna work in this industry.
 
Mystic_ZA said:
R2k/pm plus fees, the enablement of tax collection, the ability for drivers to overcharge as the feel fit, all these factors tell me this particular cashless attempt is also set to fail.

A friend and I recently sat for ages discussing who would succeed in this space with cashless.

Ultimately we landed on: either nobody, or a system that doesn't charge fees per transaction, could possibly be app based for NFC enabled phones or (ultimately) cheap terminals that could eventually come to market at once off fees where they pay for their own SIM cards, where the cash collected is quickly and easily accessible to drivers and owners, and possibly a data-free companion app for commuters to get basic information about their taxi such as is it on time for the route it generally follows (without realtime tracking on a map for safety, though perfect world that would be great), their transaction history, and a hassle free scan, tap, or find and pay by taxi ID option in the app.

The companion app serving ads could fund a lot of the services and potentially make up for the lack of transaction fees and potentially device fees for select fleets/drivers.

A companion app for taxi owners or fleet owners to monitor their taxis in near real-time, monitor income, potentially communicate with their drivers if necessary, and more.

Dropping as many transactional fees as possible is the only way to convince the drivers and owners. Not to mention the riders. They cannot afford any further fees directly by the system nor can they afford the risk that the drivers/owners up prices to make up for the fees if charged to them.

The biggest blocker of all is tax.
Cash allows many, granted not all, but many owners to either never declare or under declare income when approached by tax collection.

Having this system reduces their ability to save and make more money.
The only avenue this potentially makes them more money is by possibly opening them (back) up to commuters who have moved away from taxis because they don't want to deal with cash or for safety reasons but also still find it more affordable to use a taxi than their alternative.
It may also become a necessity as banks and government force citizen's into a banked world with digital payments and cash free environments.

I just don't see the tax blocker being avoided in any implementation of these cashless systems (for good and legal reasons of course) but it's simply not an option for many of these taxi operators.
Click to expand...
Flat fee actually makes more sense as they would then be encouraged to use it. They would need to push volumes to "pay" for the system.

They need to sell the idea to the owners, not the drivers.
Real time tracking of earnings is something every business owner wants.
 
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