Contactless spending limits will increase to £100 in October, more than doubling the current limit as contactless adoption continues to skyrocket.
Rishi Sunak, chancellor of the exchequer, announced during the March budget that cap would be raised significantly later this year.
The UK’s largest banks, represented by UK Finance, has now confirmed that the rollout will take place on October 15, seeing limits jump from £45 to £100 marking the second time since the start of the pandemic it has been increased.
This will mark a tenfold increase on spending limits since contactless cards were introduced in 2007 with a limit of £10, rising to £20 in 2012 then £30 in 2015.
While some retailers will implement the £100 contactless limit immediately, UK Finance said it would take “some time” for all UK terminals to be updated.
Numerous studies have suggested that the pandemic has driven dramatic growth in contactless payments, advancing the technology’s adoption by years.
According to a new report from VoucherCodes, conducted by the Centre for Retail Research, prior to the pandemic around 37 per cent of all transactions were made via chip-and-pin payments, while just 17 per cent were made contactlessly.
Throughout 2021 and 2022, chip-and-pin payments are forecast to drop to just 25 per cent of all transactions, while cash is also set to see a significant drop in usage falling to just 11 per cent.
Though the move has been hailed by some, including Sunak, as a “welcome boost for retailers and shoppers”, others have warned that it poses a security risk for shoppers.
AJ Bell’s head of personal finance Laura Suter said: “While the move brings more convenience for some it also carries two big warnings.
“First, it is a thief’s dream, as they can take far more of your money in each transaction if your card is lost or stolen. By spending £100 at a pop without having to put in a PIN, it would be very easy for thieves to blitz through money quickly before you even spotted the card had been nicked.
“Second, there is a risk for those who are in debt getting further into debt. The easier a card transaction is the less the consumer is actively thinking about how much they are spending, meaning it’s easier to rack up larger bills on a credit card.
“People should be able to set their own card limits if they want to, either to scupper thieves or for their own financial management.”