Contactless card payment limit rises to £100

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The contactless card payment limit has increased from £45 to £100, although many retailers’ terminals will need to be updated so the option will not be available everywhere immediately.

The increase from today marks the fifth time that the limit has been raised after it was initially set at £10 in 2007.

The limit was increased to £45 in April 2020, early on in the coronavirus pandemic, as a result of some shops restricting the use of cash, despite Bank of England research suggesting the risk of catching Covid-19 from banknotes is low.

“While the UK contactless limit rises to £100 on Friday, it may take days, weeks, or even months for some retailers to make the necessary changes in their systems so that the new limit can take effect,” British Retail Consortium payments policy adviser Andrew Cregan said.

“Furthermore, some retailers may choose not to adopt the new contactless limit. As a result, customers will need to take care when making payments to check what the maximum contactless limit is for individual stores.”

READ MORE: Two-thirds of UK consumers would prefer to use contactless payments more often

The move comes as UK Finance revealed that between January and July, 60 per cent of all debit and credit card transactions across the UK were contactless.

This accounted for 6.6 billion payments, with a value of £81.4 billion.

UK Finance’s figures also show that, in 2016, just seven of all payments, including cash, were made using contactless cards.

By 2018 this had increased to nearly one in five (19 per cent) transactions and by 2020 more than a quarter (27 per cent) of all payments were being made using contactless cards.

Some banks will allow people to set their own contactless card limits at less than £100, or turn off contactless altogether.

“The new £100 limit offers customers greater choice about how they pay for things like their weekly shop or a tank of fuel,” UK Finance David Postings said.

“Contactless payments have become increasingly popular, and the payments industry has worked hard to ensure retailers are able to offer customers the new higher limit.”

The decision to raise the contactless limit from £45 to £100 was made by the Treasury and the Financial Conduct Authority (FCA) following a public consultation and discussions with the retail and banking sectors.

However, the move has raised some concerns about the potential for fraud.

An FCA spokesman said the rules have been changed to help the industry continue “to respond to the changing ways in which people prefer to pay”.

He said: “Available fraud rate data suggests there be no significant increase in contactless payment-related fraud since the industry increased the limit to £45 in April 2020.

“What’s more, we have seen no material increase in fraudulent transactions in other countries where the contactless limit increased to the equivalent of £100 or above.

“Firms must ensure they work to reduce the risk of unauthorised transactions and fraud and need to have tools in place to monitor for fraudulent transactions. As the limit increases we will continue to keep a close eye on the data.”

with PA Wires

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