Businesses will be able to set higher limits in a matter of days
People are being reminded of a significant change to contactless payments in the UK that will take effect within a matter of days. It will get rid of a long-standing limit in favour of a new rule for banks and customers to follow.
From Thursday, March 19, banks will be able to set higher contactless limits than the existing £100 per transaction limit. Although the cap is being removed, UK Finance suggests most banks will likely stick to the £100 limit in the short term for security reasons as customers adjust to the new rules.
Customers will be able to set their own personal contactless limits or disable the feature entirely through their banking apps. The Financial Conduct Authority (FCA) decided to scrap the limit following a public consultation.
Banks and payment providers must have robust fraud controls when processing contactless transactions. The greater flexibility will incentivise firms to step up their fraud prevention, giving consumers greater protection and peace of mind.
The FCA is implementing the change to the contactless rule, and existing safeguards will remain in place. This will allow customers to be refunded in cases of unauthorised fraud, such as if their card is lost or stolen, reports the Express.
Experts believe these new limit removals will have major impacts on businesses that rely on contactless payments. Kate Nicholls, chair of UKHospitality, said: “Making life easier for consumers is a positive for any hospitality and high street business, and I’m pleased the FCA is bringing forward this change.
“Contactless has increasingly become the preferred payment method of choice for many people and lifting the limit can mean quicker and easier experiences for consumers. Whilst many people still prefer to use cash or chip and PIN, this change adds much-needed flexibility for providers and consumers.”
Recent reports suggest that the majority of UK adults favour contactless payments. UK Finance found that, since 2023, nearly four out of 10 payments in the UK have been contactless, and that a third of UK adults use mobile contactless payments at least once a month.
The findings also shared that, in total, contactless payments made up 38% of all payments made in the UK during 2023. This covers both the use of physical cards and cards loaded onto mobile phones or other devices, such as watches, which are then used to initiate contactless payments.
How have contactless limits changed in the UK?
Contactless payments have existed for decades, and longer than some people may realise. The concept of tapping to pay without entering a PIN number has been available in the UK since 2007 – almost 20 years ago.
Pioneered by Barclays with its OnePulse card, the limit on its use was relatively modest by today’s standards. In 2007, customers were capped at £10. Over the years, it gradually rose in line with inflation as the concept rolled out further across the country.
Previous ceiling limits were increased gradually over several years to what they are today:
- £15 (2010)
- £20 (2012)
- £30 (2015)
- £45 (2020)
The most recent increases occurred during the peak of the coronavirus pandemic, providing a quicker and more sanitary method for people to pay without handling cash or sharing card reader keypads.
Since October 2021, most places have offered £100 as the maximum amount people can tap to pay, and this is now set to change again at individual discretion. Although card limits were £100, payments made via digital wallets, such as Apple Pay and Google Pay on smartphones, often had no set limit due to biometrics.