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What Is The Limit For Contactless Payment?

Last editedJan 20222 min read

Contactless payments were first introduced in the UK back in 2007 for payments of £10 or less, with the contactless payment limit steadily increasing over the years. Up until October of 2021 the limit had reached £45, but it has now been increased to £100.

The Treasury and the Financial Conduct Authority (FCA) approved the decision to increase the contactless payment limit after a public consultation that took place earlier in the year. Chancellor of the Exchequer Rishi Sunak supported the limit increase, believing it would give shoppers more convenience and thus boost high street retailers’ profits after the many closures and restrictions caused by the pandemic.

It was also the pandemic that gave the FCA cause to increase the previous limit from £30 to £45 back in April 2020.

How new contactless payment limit affects small businesses

The immediate impact of the contactless payment limit increase is that retail businesses will need to update their terminals in order to be able to process the new payments. This can take some time, especially for small businesses, with the British Retail Consortium believing it could take several months for some businesses to be able to offer the £100 contactless limit.

The reason for the delay in uptake is mostly down to the sheer number of payment terminals that must be updated. Add onto that the fact that each individual business will have to make changes to their own systems in order to offer the increased payment limit.

The issues this will cause include a possible rise in ‘contactless walk-offs’, which are not thefts per say, but simply customers who wrongly believe they have successfully made the contactless payment at a self-service checkout. Some businesses slow to offer the increased contactless limit could also lose custom due to customers choosing other businesses who do offer the increased limit. This is especially concerning for any businesses also demanding a minimum card payment limit for transactions.

Setting a personal contactless payment limit

There are quite a few banks and building societies who offer a personalised contactless limit option where you can set the limit somewhere under £100. Many also let you turn the option off altogether. These banks include:

  • Lloyds Banking Group

  • NatWest

  • HSBC UK

  • Barclays

  • Santander

  • Nationwide Building Society

  • Virgin Money

  • Metro Bank

  • Starling Bank.

Contactless payment limit security risks

With a significantly higher payment limit than before, concerns have obviously been raised regarding the security risk of the £100 limit. In response, the FCA stated that there has been ‘no significant increase in contactless payment-related fraud’ since the limit was raised to £45 in April 2020, according to available fraud rate data.

The FCA also pointed out that they had not seen any ‘material increase in fraudulent transactions in other countries’ where the contactless payment limit had been increased to the equivalent of £100 or above.

The current fraud protections in place should continue to provide enough security, with people able to claim a refund if someone else makes an unauthorised payment from their account. Such unauthorised payments would usually involve a payment made after the card has been lost or stolen.

To help process any fraud refund claim, it is vital that anyone who loses their card or has it stolen reports it immediately. This is also the case if the card is not lost or stolen, but the holder notices unfamiliar transactions on their account.

Another built-in security check for contactless payments is that there is a limit on how many can be made within a certain timeframe. Once the limit is reached, the pin number must be entered to make further transactions. This payment protection at least minimises the amount that can be stolen through fraudulent transactions.

We can help

If you’re interested in finding out more about the contactless payment limit in the UK, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 70,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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