All 22,500 London black cabs will be required to accept debit and credit cards by October this year.
The news comes after 86% of people taking part in a public consultation backed a Transport for London proposal to mandate card acceptance and make it more convenient for Taxi users to pay for their journeys.
Around half of all cabs already take card payments but TfL’s announcement means passengers will no longer have to check acceptance before starting their journey.
TfL will approve all card equipment installed in cabs and says it will work with the card industry to link future payment devices directly to the taximeter.
Mayor of London, Boris Johnson, said: “It’s great news that with a quick swipe of a card, millions of passengers will be able to pay for their journeys in London’s iconic black cabs.
“It’s an essential part of modern life and it’ll make paying for your journey swifter and simpler than ever before.”
Garrett Emmerson, TfL’s Chief Operating Officer for Surface Transport, adde: “We believe the acceptance of card and contactless payments will be a huge plus for both taxi drivers and their passengers.
“Card payments are part of everyday life in London, and people use them in every aspect of their lives.”