Following the UK’s departure from the European Union, the limit for contactless payments within the UK could be increased from £45 to £100.
The change would come as engagement with contactless payments has continued to heighten as consumers have sought to halt the risk of covid-19 transmission as much as possible.
In order for the increase to come into effect, it would require approval from the Financial Conduct Authority, however, it is already seeing support from much of the UK’s finance industry, with the Times reporting that City lobby group UK Finance was at the heart of it being pitched to the treasury.
The current limit of £45, which was increased at the start of the COVID-19 pandemic following the guidance of the World Health Organisation when it comes to cash handling, was set by the European Commission. Given the UK has now exited the Union, there is scope to accelerate the increase of contactless payment allowance.
The UK government may see this as an opportunity to showcase freedoms that have become available following Brexit,a shift that is likely to be popular amongst consumers given how it increases efficiency in everyday payments.
Unsurprisingly given the impact of the pandemic on cash handling and consumers’ enthusiasm to utilise point of sale terminals, last year saw substantial growth for contactless payments with 46 per cent of all credit card transactions taking place via contactless technology.
Expert Analysis: Contactless payments are becoming increasingly prevalent and are now a normal part of the customer commerce journey. The limit for contactless payments has slowly grown since its introduction and whilst rising to £100 would be a significant limit increase, it’s one that very much makes sense, especially following the lack of vulnerability to fraud that has been seen from the tech in the past year.