After the contactless payment limit has been raised, shoppers can now pay up to £ 100 with a single tap on the card.
The cap has been raised from £ 45, but the options aren’t immediately available everywhere due to the need to update the handsets of many retailers, and the process involves “days, weeks, and even numbers.” It may take “months”.
It came into effect on Friday, October 15, and is the fifth time the threshold has been raised since it was first set at £ 10 in 2007.
Why has the contactless payment limit been raised to £ 100?
Early in the coronavirus pandemic, the cap was raised to £ 45 in April 2020. According to a Bank of England study, the risk of catching Covid-19 from banknotes is low, but some stores have limited people’s ability to pay in cash during the crisis.
Between January and July this year, 60% of all debit and credit card transactions across the UK were contactless payments, according to industry group UK Finance. It accounted for 6.6 billion payments and was worth £ 81.4 billion.
Group figures also show that in 2016, only 7% of all payments, including cash, were made using contactless cards. By 2018, this had increased to almost one in five transactions, and by 2020 it had increased to more than a quarter.
The decision to raise the cap to £ 100 was made by the Treasury and the Financial Conduct Authority (FCA) as a result of public consultation and consultation with the retail and banking sectors.
How the limits of contactless payments have expanded
The new contactless card usage limit of £ 100, introduced on Friday, is 10 times the original limit set in 2007.
This is a timeline that shows how limits have increased over the years.
- 2007, £ 10
- 2010, £ 15
- year 2012, £ 20
- 2015, £ 30
- 2020, £ 45
- 2021, £ 100
Is the new limit a security risk?
This move has raised some concerns about the potential for fraud.
An FCA spokesman said the rules were changed to help the industry “keep up with the changing ways people prefer to pay.”
He states: “Available fraud rate data suggests that there will be no significant increase in contactless payment-related fraud as the industry raised its cap to £ 45 in April 2020.
“In addition, there was no significant increase in fraudulent transactions in other countries where contactless payment caps were raised above £ 100.”
UK Finance states that if your card is lost or stolen, or if you notice a strange transaction in your account, you should always contact the bank immediately.
Under fraud prevention rules, people can claim a refund if someone else makes a fraudulent payment from their account. For example, after the card has been stolen.
The card also has a built-in security check, which requires the customer to enter a PIN after a certain amount of contactless payments or after a certain number of transactions.
Sarah Pennells, Consumer Finance Specialist at Royal London, said:
“Contactless cards must be treated like cash in your pocket, so be careful when using them and don’t give them to others.”
Which banks can set their own limits?
Some banks allow you to set a contactless card limit of less than £ 100 or turn contactless payments off altogether. The comparison method is as follows.
Lloyds Banking Group
Lloyds, Halifax, and Bank of Scotland customers can set their own contactless payment limits in £ 5 increments from £ 30 to £ 95.
You can also turn the non-contact feature on and off. If you turn off contactless payment, you will need to enter your PIN when paying with your card.
Customers can choose to turn off the contactless feature of their cards using the NatWest mobile app, but currently they cannot set their own limits.
Banks currently do not offer the ability to set individual contactless limits, but said customers could request contactless cards if that was their preference.
Currently, customers do not have the option to set their own contactless payment limits, but they can set spending limits across all transactions, including contactless payments.
These controls can be updated in real time in the app.
Banks are working on an option that allows customers to request a lower limit for contactless payments, which is not immediately available.
Nationwide Building Society
Members across the country can turn off the contactless feature and request a contactless card if needed.
The building-and-loan union also plans to launch in the future the ability for members to set a contactless payment limit below £ 100.
You may not set your own limits or switch contactless on and off.
Metrobank currently has no plans to allow customers to set individual limits on contactless cards. He added that various safeguards are being taken across the channel to protect customers from fraud.
Customers can use the app to select limits that can be selected in £ 10 increments between £ 0 and £ 100. If you want, you can turn contactless payments off altogether.
Additional report from Press Association