Rollout of new £100 contactless limit begins today
The national roll-out of the new £100 spending limit for contactless card payments will begin today, Friday 15 October.
Consumers will start to see retailers accepting contactless card payments up to £100, which will give them more flexibility when shopping in store. This will also help with bigger spends where speed and convenience are valued, such as a family meal out.
Given the number of terminals that need to be updated, the £100 limit may not be available across all retailers immediately. To check if a retailer has updated to the new limit, customers should either ask in store or follow the prompts on the card payment machine when paying. Where the retailer’s terminal has not been updated, payment cards can still be used as before.
From January to July of this year 60 per cent of all debit and credit card transactions in the UK were made using contactless. This accounted for 6.6 billion payments, a value of £81.4 billion.
David Postings, Chief Executive of UK Finance, said: “The new £100 limit offers customers greater choice about how they pay for things like their weekly shop or a tank of fuel. 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 HM Treasury and the Financial Conduct Authority following a public consultation and in discussion with both the retail and banking sectors. It follows on from the successful increase in the limit from £30 to £45 in April 2020.
Customers are fully protected against any losses due to unauthorised card fraud, for example, if a card has been stolen. Every card also has an in-built security check which means that after a certain amount of contactless spending is undertaken or a certain number of transactions have been made, customers will need to enter their PIN to verify that they are the genuine cardholder. Customers should report lost or stolen cards to their bank immediately.
Alexander Von Schirmeister, Executive Vice President For Europe at SumUp comments: “From the microwave oven to the mobile phone – technology has always been driven by convenience.
“Our data shows that there has been a steady increase in contactless transactions within the new limits, raised to £45 in April last year, because the majority of customers are just seeking the convenience of a tap of a card – without having to work out the limit first. This Budget announcement is likely to be most welcomed by small business owners who, at this incredibly difficult time, need as few barriers as possible that could scupper important sales.
“Of course, it’s our job as the technology provider to make sure these payments are safe and secure for both customer and merchant – as well as working with the UK Government to ensure a payment infrastructure is easily accessible and affordable for businesses of all sizes.”
Steffen Vollert, C-Founder & CTO, Volt comments: “With at least 135m contactless cards in circulation and the technology accounting for 9.6bn payments a year, there’s no doubt that the new contactless limit brings new opportunities for many. Consumers will benefit from greater flexibility and convenience; merchants could see an increase in sales and operational efficiencies; payment service providers might experience an uptick in transaction volumes.”
“However, concerns that the increased limit will make it easier for fraudsters to steal larger sums of money from cardholders are valid, and should not be disregarded. During the first six months of this year alone, contactless fraud – covering cards and mobile phones – totalled £7.6m, according to UK Finance.”
“Certainly, steps are being taken in right direction to combat card fraud. After 14 March 2022, issuers in the UK will have a legal obligation to implement SCA on card transactions under the FCA’s PSD2 requirements, for example. But this doesn’t solve the issue of contactless transactions, or card fraud itself. As a result, the increased limit could accelerate growing demand for an equally fast, but more secure payment method, which can be realised via open banking. Direct account-to-account payments in real-time eliminate card fraud altogether, whilst providing a single-click checkout experience for the consumer and substantially reduced fees for the merchant. It will take time for open banking payments to become mainstream. But could the increased contactless limit be the catalyst for a transition away from card payments? Only time will tell.”
A Visa spokesperson said: “The introduction of the new £100 contactless limit is a good move for British shoppers, high street businesses and the communities they serve – providing greater flexibility and choice in how people pay in-store.
“With one of the lowest fraud rates of any type of payment, at 0.01% across Europe*, contactless payments remain one of the most secure ways to pay for everyday purchases. Contactless fraud rates actually fell following the introduction of the £45 limit in the UK last year.
“Many other countries with a limit of £100 and above like Australia, Singapore and Canada have also maintained low fraud rates, and we’re confident that the UK will experience similar success with the rollout of the new limit.”
Speaking about the trend, David Whiting, head of payments from Soldo said: “We’ve noticed an increasing number of businesses opting to turn off contactless payments on company cards. Contactless is a fantastic innovation for consumers, but in certain situations, particularly when you’re not directly footing the bill, it can lead to reckless spending. Another problem is that many people forget to get a receipt when they pay with contactless, and this can cause havoc for finance teams at the end of the month. Soldo is committed to helping business manage spend with solutions that provide transparency and control across all payments, so we’re not surprised to see finance teams disable contactless as they smoothly manage payment risks by making use of Soldo’s advanced card control and security features.”