VISA's tagline "More people go with Visa" may be catchy, but it seems that most taxi passengers in Singapore will soon be unable to use Visa's cards on their cab rides.
From next Monday, July 15, Visa cards will no longer be accepted in all ComfortDelGro and Trans Cab taxis in Singapore. Visa says that the taxi operators are unwilling to remove the 10 per cent surcharge that they apply to fares paid on Visa payment cards.
In a statement issued by Visa yesterday, the company said that it made this decision to uphold its no surcharge protection policy, which protects cardholders from paying additional fees simply for using their payment cards of choice.
"We believe that consumers should be free to choose their preferred form of payment and those who decide to pay with payment cards should not be penalised. For Singapore's commuters and international visitors the use of payment cards makes paying for taxi fares more convenient, secure and reliable," Ooi Huey Tyng, Visa country manager for Singapore and Brunei, explained that surcharging is harmful to consumers.
"Visa's no surcharging protection was created specifically to shield consumers from merchants who seek to impose surcharge fees and penalise consumers who choose Visa over other forms of payment. Surcharging unfairly shifts the cost of doing business onto consumers."
Visa and its financial institutions have been working together to reduce surcharging in the country and provide greater protection to consumers. In August 2012, a Visa audit found 9 per cent of Singaporean merchants to be imposing surcharges or minimum spend policies. However, by November 2012, a follow up audit found that this had reduced to 2.8 per cent.
"Our research shows a strong shift away from the practice of merchant surcharging. We firmly stand by our belief that cardholders are entitled to the right to card choice without penalty and we will continue to work with our financial institution partners and merchants to ensure that the practice of card surcharging is not permitted in Singapore," added Ms Ooi.
According to the company, negotiations with the taxi operators to waive this surcharge were unsuccessful resulting in the ending of the relationship.
"Unfortunately after lengthy discussions with ComfortDelGro we could not reach an agreement that was fair to consumers, so we were left with no choice but to remove Visa card acceptance. "
The Business Times could not reach both taxi operators for comment.
However, this is not the end of the road for the relationship between the parties as Visa indicated that it was open to resolving differences and moving onward with the journey.
"We remain open to working with ComfortDelGro and other taxi companies and welcome the opportunity to talk with them further to review their surcharging practices," confirmed Ms Ooi.