The new contactless spend limit of £100 is almost upon us, and evidence suggests that a further rise in contactless payments and consumer spending is inevitable.Read more
22 September 2021
The new contactless spend limit of £100 is almost upon us, and evidence suggests that a further rise in contactless payments and consumer spending is inevitable. Customers will be able to make higher value purchases without the need to tap in their pin, giving them the freedom and flexibility to pay by card faster. Broadly viewed as a positive move for consumers and merchants alike, consumer spending is expected to increase facilitating a much needed boost in the economy.
Contactless payments have become common place in recent times with more customers accepting that they are a convenient and safe way to pay for their favourite products and services without having to touch a terminal.
Over time the spending limit has been creeping up and from October 15th, customers will be able to make contactless transactions up to the value of £100. Once the new limit is introduced, customers will still be able to make up to five transactions or spend a maximum of £300 (up from the current £130) before they are asked for a Pin.
According to UK Finance, the collective voice for the banking and finance industry, the increase in the contactless payment limit is a positive move. The 50% increase from £30 to £45 on 1 April 2020 had a positive effect on customer spending, with contactless payments growing by 12% in 2020. The proportion of debit card payments increased from four out of ten in 2019 to six out of ten by September 2020, indicating that the new limit signals the likelihood that merchants will see an increase in contactless payments across the board when the higher limit is introduced.
Whilst the move to increase the maximum spend gives customers more flexibility and is of benefit to merchants, experts warn that the increase could lead to a surge in fraud and rise in consumer debt.
As outlined by which magazine online, in the event that your card is stolen, theives will be able to spend more on your card before they are asked for a pin. However, banks should refund money that has been fraudulently taken from your card and the FCA says it will take enforcement action if it finds banks are allowing breaches of the cumulative transaction limit.
Consumers will need to be mindful of their spending as the contactless limit increases to avoid getting into debt. Lloyds, Halifax, and Bank Of Scotland have already announced that their customers will be able to set their own contactless limit when the new £100 cap is introduced.
Card machine updates will happen automatically for most RMS merchants from October 15th, so you do not need to do anything. For merchants with Verifone VX card machines simply click on this link, select your model and follow the instructions from Step 1.
If you do not currently accept contactless payments but would like to, please get in touch to get set up.