Card and contactless payment could become mandatory in all London black cabs from October 2016, Transport for London (TfL) has said.
A consultation found 86% of respondents were in favour of card payment, while 68% wanted the option of contactless payment.
Customers paying by card will not pay a surcharge.
But there will be a 20p rise on the basic fare, which is £2.40 at the start of the journey, TfL said.
Steve McNamara of the Licensed Taxi Drivers Association said the majority of cab drivers already accepted cards.
"But we welcome TfL having used their bargaining power to reduce the costs to cabbies charged by the card providers."
London Mayor Boris Johnson said: "This move will boost business for cabbies and bring the trade into the 21st Century by enabling quicker and more convenient journeys for customers."
Garrett Emmerson, TfL's chief operating officer for surface transport, said: "We are seeing more and more people use contactless payments on our network, and mandating card payments in taxis will mean customers no longer have to consider how they might pay for a journey before getting into a taxi."
Valerie Shawcross, chair of the London Assembly's transport committee, said the move was a "golden opportunity" for licensed taxi drivers.
"We heard evidence from New York during our investigation, where the introduction of card payments boosted business," she said.