Today myTaxi, the Hamburg-based startup that pioneered mobile applications for booking taxis, launches the first mobile payment system in the German taxi market that enables passengers to pay their taxi by smartphone.
MyTaxi Payment is a direct billing process between driver and passenger, smartphone to smartphone, thanks to the help of Paypal and Wirecard.
The money is debited from the passenger's PayPal Account or credit card. Input of a personal identification number for the myTaxi App Payment system is used for security.
Passengers don't need to remember their credit card number, pay with cash, use near-field communication (NFC), scan Quick Response (QR) codes, or buy hardware.
One in five German taxis are associated with myTaxi, but not all of the myTaxis are set up to use the new payment system to start.
MyTaxi Payment will be introduced in international locations this year only for passengers using the iOS version. Android will follow shortly.
To make the point, myTaxi has created a humorous video of a naked traveler walking around Germany, hiring a taxi, and paying without cash or credit card.
The cute YouTube advertisement underlines the stereotype that Germans will use any excuse to get naked in public.
Here's how the process works. Users download the free app. They then register, creating a myTaxi Account. Passenger lodges his or her Paypal or credit card (Visa or Mastercard) through the app or myTaxi website.
Then the passenger orders the cab (usual ordering process) but activates myTaxi payment in the app (so only myTaxi Payment drivers can accept the order).
Once passenger is in the cab, the driver starts the billing process by typing in the fare. Push notification pops up on passenger's screen with the fare. Passenger chooses tip (5, 10, 15 %) and the paying method (credit or Paypal).
Passengers then slides an icon on the screen to pay and has to confirm the whole process with his personal identification number.
Driver receives push that billing was successful. Passenger receives receipt via email right after the billing process.
"With our new myTaxi Payment product we will revolutionise the taxi branch once again," claims Niclaus Mewes, CEO of myTaxi and co-founder, along with Sven Külper.
For the passenger there will be no extra charge to use the myTaxi Payment service.
MyTaxi requires a referral fee (typically 21 cents per trip) from participating taxi drivers.
Leading rival taxi-call application taxi.de requires no referral fees and monetizes using advertising and the construction of "individualized applications for taxi drivers." Taxi.de has no mobile payment solution as easy as myTaxi Payment's, though.
Earlier this year, Daimler-associated company Car2go invested 10 million euros in myTaxi. Other investors include KfW and T-venture, the venture capitalists of Deutsche Telekom on the road.
The mobile solution will be watched closely by other companies, and not just players in the taxi booking sector such as Uber. The travel sector currently pays high fees to credit card companies in order to use their services.
N.B. Article was updated to describe the booking process at 3:35 p.m. ET.