Contactless cards are arguably the easiest form of payment to use at retailers and the chancellor Rishi Sunak has announced that the limit has increased to £100
The new limit for contactless cards has come into effect across the UK, making it a lot easier to spend higher amounts of money.
It replaces the old limit of £45. Any total higher than that and users were required to use chip and pin payments. As the contactless limit has increased, so has usage of contactless cards.
The Chancellor Rishi Sunak believes that the increase in the limit will be a boost to the economy.
The Chancellor said: “As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth.”
The number of consecutive payments before card users are required to provide their pin will stay at five. However, the amount a person can spend across those five transactions has gone up to £300.
What is the new limit?
The limit is increasing by £55 to £100. This is a sizeable difference considering contactless payments were originally brought in at £10.
But there are fewer people using cash and this has been accelerated by the pandemic.
In June, a study by UK Finance reported a 35% drop in cash transactions
It is widely expected that cash will eventually be phased out. The popular restaurant Nando’s already declines any attempted use of cash payments, for example.
The Bank of England said: “While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.”
What happens if someone steals my card?
Martyn Wheatley / Parsons Media)
Some have criticised the increase and are worried about fraud and that bag snatchers may be more inclined to target people’s wallets and purses, now that they can spend more on a contactless card before it is cancelled.
But a spokesperson for the Financial Conduct Authority told the BBC : “We have seen no material increase in fraudulent transactions in other countries where the contactless limit increased [in other countries with similar limits] to the equivalent of £100 or above.”
If you are worried about losing your card, then you can request a non-contactless card from your banks.
If it is lost or stolen, you should contact your bank immediately to cancel your card.
Some banks already have restrictions in place so that your pin will be asked for if there are a certain number or amount of transactions within a period of time.
Where can I use it?
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You won’t be able to use it everywhere straight away. Shops, restaurants, bars and the like all need time to update the terminals that receive the payments.
It is also the case that some shops may not want to extend the limit for the time being.
Payments policy adviser at the British Retail Consortium Andrew Cregan told the BBC: “It may take days, weeks, or even months for some retailers to make the necessary changes in their systems so that the new limit can take effect.
“Furthermore, some retailers may choose not to adopt the new contactless limit. As a result, customers will need to take care when making payments to check what the maximum contactless limit is for individual stores.”