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Contactless card limit rise - what consumers and retailers need to know

The contactless card limit will increase to £100 tomorrow (Friday, October 15) and many consumers are worried about the negative effects this could have should they lose their card, whilst retailers learn how it will affect their business.


From tomorrow, shoppers will be able to make an in-store purchase of up to £100 without using their PIN, that’s an increase from the £45 limit introduced in April 2020.


Money expert Andy Webb spoke on BBC Money Box and gave his thoughts on the increase, and talked about measures people should adopt if they do lose their cards.


“The most you could potentially be defrauded of is £300, but you will get that back.”, Andy began.
“The limit changes for each bank but the most you can spend with contactless is £300, or five uses.
“As soon as you find out money has been taken, you should go straight to your bank.
“Also, on a lot of apps now as well, as soon as you find out this has happened, you can freeze your card straight away before you get on the phone to them, and it can stop any transactions taking place.”

Currently, regulations state that providers will prevent contactless payments where people try to spend above the contactless limit, where they’ve made more than five contactless transactions in a row using the same card, or where the total amount spent since people last had to verify a transaction exceeds £130 (this is changing to £300 from tomorrow).


Each bank has protocols in place to prevent fraud, but the Financial Conduct Authority has explained victims should be able to get their money back “without unnecessary delay”.


In the past four years the number of contactless payments in the UK has risen from seven percent of all payments to 27 percent, according to UK Finance.


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, in which time contactless payments grew by 12 percent.



Responding to concerns that raising the contactless limit could result in a rise in fraudulent activity, the Treasury said there was no significant rise in reported fraud when the limit was raised from £30 to £45 last year.


It added that reported fraud equated to 0.02 percent of the total spent using contactless cards since April 2020.


The proportion of debit card payments using contactless has risen during the pandemic, from two in five in 2019 to three in five by September 2020.


David Postings, Chief Executive of UK Finance, said: “Contactless payment has proved very popular with consumers and an increasing number of transactions are being made using contactless technology.
“The increase in the limit to £100 will allow people to pay for higher value transactions like their weekly shop or filling up their car with fuel.
“The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit.”

Meanwhile, Chancellor of the Exchequer Rishi Sunak added:

Increasing the contactless limit will make it easier than ever to pay safely and securely - whether that’s at the local shops, or your favourite pub and restaurant. As people get back to the high street, millions of payments will made be simpler, providing a welcome boost for retailers and shoppers.

For those opposed to the idea of the limit increasing, each bank has different rules in terms of lowering the contact limit or not having it at all.


People should speak with their bank as all of them are different.


What about retailers?


UK Finance have put together a comprehensive Guide for Retailers. If you own a business and want to know the ins and outs of the increase, read this guide.



 

Reporting

Report all Fraud and Cybercrime to Action Fraud by calling 0300 123 2040 or online. Forward suspicious emails to report@phishing.gov.uk. Report SMS scams by forwarding the original message to 7726 (spells SPAM on the keypad).


 

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