Contactless card payment limit to more than double to £100 on the 15th October

The UK contactless card payment limit is going to more than double from £45 to £100 on the 15th October, allowing for much more flexibility and even more transaction speed at the point of sale. But is this necessarily a good thing for everyone?

The contactless card payment system was first introduced in 2007 and revolutionized the speed at which transactions could be made—with an initial £10 limit. That limit subsequently rose to £30 in 2015 and rose even higher to £45 in April 2020 as a response to COVID-19 safety concerns.

Today, it is easy to forget that card transactions of similar sizes used to require an accompanying signature. The revolution in how we pay by using just a tap of our card, our mobile phone, or other frictionless payment methods is something that it is easy to take for granted.

In our COVID-19 Barometer, we sought to determine just how much behavior has changed with regard to payment. What we found is that 63% of UK respondents elect to use cards or digital payments whenever possible.

I am personally looking forward to the increase in the UK contactless card limit, but it does raise some interesting points…

1. The timing is quite interesting. It might have been beneficial to see a larger contactless limit introduced during the early stages of lockdown in 2020.

2. Although it does not require much effort to input a four-digit PIN number, introducing the new limit could continue to stimulate consumer spend. The increase also makes sense as we move towards becoming a cashless society. However, our data shows that cash continues to have an important role in day-to-day transactions at the present moment.

3. The new increased limit could also prove very beneficial in offering reassurances to those who have been shielding during the pandemic and others who feel uncomfortable handling a payment terminal.

5. I think this change presents some very genuine concerns in terms of security—particularly for the elderly and vulnerable who might be taken advantage of if someone gained access to their card. This might result in an increase in the volume of fraud claims for banks to process.

5. It will be easier to buy more items, as well as more expensive items, with the new limit. Perhaps individuals should be allowed to set their own contactless card limit (within an overall allowance), enabling them to define a comfortable number for themselves.

Contactless card technology limits, as well as the underlying technologies, are set to rapidly evolve over the next five to ten years. This is going to continue to be a very exciting area for market researchers to engage with.