The Royal Bank of Scotland (RBS) is trialling contactless terminals in London black cabs for fares of up to £10.

RBS is using MasterCard's PayPass contactless technology. Its rival Barclaycard started trialling its own cab terminals last year using Visa's 'wave and pay' technology.

The 'touch and go' terminals are designed to encourage people to use cabs for short journeys.

“Drivers will benefit because payment is faster and there is potential to attract more customers who do not have cash available or would not normally take a taxi for 'lower fare' journeys,” said RBS’ managing director of global merchant services Ron Kalifa.

According to the bank’s own research, half of its customers regularly carry less than £10 in cash.