The limit for contactless "tap and go" cards is to increase to £20, as retailers carry out upgrades across the UK.
The UK Cards Association said the £5 increase will broaden the appeal of the cards and reflect the gradual move from cash to cards for low-value payments.
The technology enables customers to pay for goods with a single swipe of their card on a reader, without the need to sign or enter a pin number.
The transaction limit has been raised once before, from £10 to £15 two years ago and 23 million cards have this technology across the UK, the association said.
More than 17.7 billion of all consumer cash payments are for amounts under £20 and the majority were used to buy groceries, followed by money spent on dining out.
The increase comes ahead of the Post Office's roll-out of contactless payment technology to its 30,000 counter positions from next week.
The initiative is said to be the largest deployment of contactless technology in Europe and will put the terminals within three miles of 99% of the UK population.
Contactless can already be used in 55 national stores, which have rolled out the technology or else placed it in selected branches including Boots, Greggs, Spar and Wilkinsons.
UK Cards Association chair Melanie Johnson said: "Low-value transactions have been gradually moving from cash to card. Contactless cards provide another convenient and fast method for paying for low-cost goods and services.
"They attract the same level of protection as traditional plastic cards - meaning that customers will suffer no loss if they are a victim of fraud - and certainly provide much more convenience and protection than traditional payment methods such as cash or cheque."