GigaOm's Ryan Kim is reporting Square is shutting down a pilot program it was running with New York City's Taxi and Limousine Commission. The company was testing an iPad-based system for processing payments in approximately 15 New York cabs.

The pilot was intended to run through next year, but in a letter to NYC TLC, Square claimed solution was "commercially unreasonable" due to new regulations. The company will be looking at a new solution instead.

According to the story, Square is reimbursing pilot participants the cost to uninstall its solution and reinstall the original systems from VeriFone or Creative Mobile Technologies. Square will also pay participants $378 — the estimated difference between its processing fees and those charged by competitors during the remainder of the test period.

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