Contactless limit in UK rises to £100 in October. What does it mean?

09 Sep 2021

The spending limit on contactless card payments is set to rise in the UK in October from £45 to £100. The maximum amount rose from £30 to the current level when the pandemic hit, with plans for the further increase announced in the Budget.

According to Chancellor Rishi Sunak: "Increasing the contactless limit will make it easier than ever to pay safely and securely. As people get back to the High Street, millions of payments will made be simpler, providing a welcome boost for retailers and shoppers."
Contactless cards were introduced in 2007 with an initial £10 limit, yet 14 years later the limit has increased ten-fold, with close to two-thirds of all debit card transactions now made using the technology, BBC reports.

Why is the limit being increased?
The limit first rose due to shifting consumer behaviour. Last year, the number of contactless payments made in Britain rose by 12% to 9.6 billion, according to UK Finance. As such, in March this year, the Treasury and Financial Conduct Authority (FCA) decided to hike the limit to £100 to cater to growing demand.
From 15 October, retailers across the country will begin to accept contactless payments up to the new £100 limit. However, it may take some time for terminals to be updated in order to accept the new limit.
Andries Smit, CEO and Founder of Upside said of the increase: “I think the increased contactless limit is great news for retail. I only wish it was done earlier so that consumers and the retail industry could have benefitted from this during the lockdowns. People want contactless, frictionless payments. People don’t want cards, no bank cards, no loyalty cards. Contactless everything is the way to go and is almost certainly the future of payment.”

Is it safe to increase the contactless limit?
Fraud rates associated with contactless are comparatively low, equivalent to less than 2p for every £100 spent at the beginning of 2020, says a Which? report. This is less than the 2018 level, 2.7p, and makes up just 2.8% of overall card fraud. As it stands, below the £45 threshold, card issuers limit cumulative payments that can be made before a pin is requested at £130. From 15 October, the new £100 limit will see the cumulative payment cap increase to £300.
This means should your card be stolen, more could be spent on your card before a pin number is requested. That said, banks should refund money that has been stolen from your card, the Which? report goes on to say.

Martin Quinn, Head of Sales and Account Management at HeadlineMoney said: “Criminals could easily use their cards on a £100 a time spending spree before the victim even realises they have been robbed. 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.”
This was echoed in a report by UCL's Jill Dando Institute of Security and Crime Science: "Raising the contactless card limit to £100 would likely make card theft more attractive, increasing a broad range of acquisitive crimes including snatch theft of wallets and purses, hold-up robberies, and home and vehicle break-ins to find cards that can be used fraudulently.

"Past experience suggests it could attract new cohorts of teen criminals who are more likely to progress to extended criminal careers, with implications for longer term crime rates,” the report stated.
Whereas, James Thorpe, VP of Communications at Mastercard said: “It would be unrealistic to say contactless fraud will continue to track down following the extension, but coming from such a low base and with the security measures in place, it’s also unrealistic to suggest contactless will become a main driver of card fraud.”

Do you have to have a contactless card?
Most card providers allow customers to opt-out of having a contactless card, whereas those that provide credit and debit cards permit customers to opt-out of one or the other. As an example, Barclaycard allows you to say no to the contactless feature on its debit card, yet not on its credit cards. See the Which? guide of banks and credit card providers that allow users to opt-put of contactless payments here.