The contactless payment limit in the UK is set to rise to £100 today, as the transaction continues to spike in engagement amongst consumers. 

In order to alleviate any fears of fraud, however, the majority of the region’s major banks have enabled consumers to take advantage of greater controls and set their own limits on contactless payments. 

Mick Fennell, Business Line Director of Payments at Temenos, praised the move: “The decision to increase contactless payments to £100 from today is another clear landmark in the journey to the land of ubiquitous, seamless, frictionless digital payments. 

“While card payments continue to lead, we are also observing a definite trend to direct account payments, which are gaining momentum through the accelerated use of tokenization, open banking, and instant payment schemes. We’re witnessing significant growth in the automation of direct pay-ins and pay-outs on websites, and we expect to see much more of this open banking-led payments technology in e-commerce in the coming years.”

Brad Hyett, CEO of phos also commented on the decision: “Businesses must embrace digital payments or risk getting left behind. A quarter of all UK smartphone users are predicted to make in-store payments using a mobile phone by 2023. The move to increase the contactless spending limit is an inevitable response to that fact. The pandemic has accelerated the move towards cash-free payments and consumers now expect to make convenient and quick payments without entering a pin code.

“Increasing the contactless spending limit benefits both merchants and consumers. Businesses will experience an increase in overall revenue as consumer spend is no longer limited to £45. As such, affording customers the freedom to spend more in store. And the consumer benefits from greater financial security, thanks to the tap to pay technology which is encrypted with dynamic data technologies to protect users from fraudulent purchases.

“As contactless payments become more popular, the finance industry must step up to the challenge of ensuring that merchants are equipped with the right payment solutions to accept payments in a secure, efficient, and simple manner. Those that are too slow to move away from cash as a primary mode of receiving payments will have the viability of their businesses significantly threatened as they won’t be able to compete.”

The move marks the second significant rise in the allowance of contactless payments since the commencing of the pandemic last March, with the original increase being from £30 to £45. 

According to Sky News, Caroline Abrahams, charity director at Age UK stated on the move: “As the banks and some shops try to encourage people to use less cash, it’s important that they take proactive steps to help to boost people’s confidence to use cards as an alternative and to tackle fraud.

“Both shop and bank employees should be trained to watch out for signs of coercion or abuse, such as unusual spending patterns, and be prepared to sensitively raise the issue with their customers when they believe it’s the right thing to do.”

Expert Analysis: This is a significant change in the way the UK makes payments and a further acceleration of the digital and contactless transactions, whilst also bringing an extra level of convenience and efficiency. It also adds a potential threat of fraud, something that UK retailers and banks have to combat.