Contactless payments were introduced back in 2007 as a way to streamline the shopping experience and make life easier for high street customers.
Already a popular option, the start of the pandemic led to many stores adopting contactless as their preferred payment method so that they could stop unnecessary contact between shoppers and their staff.
This led to the payment limit being upped from £30 – £45 at the start of the pandemic. It was hoped that the change would encourage more customers to use their contactless card and help limit the possible spread of germs. The plan seemed to work, and the government now plans to increase the limit again – this time more than doubling it to £100. The change will come into play in mid-October, although it may take longer for some stores to adapt their devices to accept the higher amount.
It will be a welcome thought to anyone who’s had their card rejected after trying to make a payment that’s over the limit. However, for many it will also spark concerns about security. One of the reasons that we have a contactless limit at all is to ensure that criminals aren’t able to spend too much should they steal somebody’s bank card. This is also the reason for asking card users to make payment via chip and pin after a certain number of transactions.
Industry experts and pundits are split down the middle as to whether the limit increase represents a bold step forwards or a security nightmare. The CEO of VibePay suggested that it’s a natural next step when we consider how transactions are taking place:
“The move from the regulator to increase the contactless limit makes complete sense as we rapidly move towards a cashless society – a trend which has been accelerated by the covid-19 pandemic.”
However, Martin Quinn of HeadlineMoney warned that: “Criminals could easily use their cards on a £100 a time spending spree before the victim even realises they have been robbed.” Instead, he proposes that: “A greater emphasis should be placed on retailers accepting cash as a form of payment rather than this unnecessary increase to the contactless limit. This would help the vulnerable and less tech savvy in society.”
That being said, the £100 limit also brings with it some added financial protections – particularly for those using credit cards. Payments of £100 and over are covered by section 75 of the consumer credit act, a regulation that makes it easier for customers to get their money back from the credit card provider should something go wrong.
There’s also an emphasis on the individual’s responsibility to keep their card safe. This means taking precautions when you’re out and about, to make sure that it’s stored out of sight in a secure wallet or purse.
So while there are definitely some safety concerns to be aware of, the new £100 contactless limit seems to represent the government’s intention to keep up with modern industry trends. It also makes great sense for small businesses, many of whom have recently made the move to accepting card after customers increasingly stopped carrying cash. Making transactions quicker and easier for them may prove an important part of post COVID-19 recovery.