Taxi cabs in New York City already take credit cards, but they will accept a credit card perk as well.
American Express (AXP) will allow cardholders to pay for cab rides using rewards points generated with other credit card purchases. Users will be able to use their reward points simply by swiping their cards through VeriFone‘s (PAY) payment machines in the back of taxis, Business Week notes.
Once the card has been swiped, American Express will determine how many reward points a cardholder has and then deduct them from the bill. The program could also eventually be extended to retail outlets that use Verifone machines if it proves successful.
Allowing cardholders to convert their rewards points directly into cash for taxi rides is seen as perk that could put American Express’ incentive offers ahead of those issued by rivals MasterCard (MA) and Visa (V).
Shares of American Express gained modestly in Monday morning trading.