Contactless card payment limit could be increased to £100

Vicky Shaw, PA Personal Finance Correspondent
(Dominic Lipinski/PA)

The contactless card payment limit could be raised to £100 under measures to be considered by the City regulator.

Since the limit for contactless card payments was raised from £30 to £45 last April at the start of the coronavirus pandemic, people have increasingly made use of contactless payments, the Financial Conduct Authority (FCA) said.

The FCA said it intends to consult on a possible increase to the limit.

  • 2020, £45

  • 2015, £30

  • 2012, £20

  • 2010, £15

  • 2007, £10

It said: “It’s important that payments regulation keeps pace with consumer and merchant expectations.

“Recognising changing behaviour in how people pay, as part of a wider consultation, we will shortly be seeking views on amending our rules to allow for a possible increase in the contactless limit to £100.”

Increasing the contactless payment limit may hasten the demise of cash use, although the Government intends to legislate to protect access to cash.

Some retailers have encouraged shoppers to pay by card rather than cash during the pandemic, although a recent Bank of England study found the risk of catching coronavirus from banknotes was low.

The current £45 limit is three times the amount it was a decade ago.

“Tap and go” contactless cards initially had a limit of £10 in 2007, and this was increased to £15 in 2010, £20 in 2012 and £30 in 2015.

The FCA made the comments as it confirmed further coronavirus support measures.

It said that for mortgage customers, it is extending current guidance so firms should not enforce repossessions, except in exceptional circumstances, before April 1.

For consumer credit customers, it has updated the guidance so firms will be able to repossess goods and vehicles from January 31.

The finalised guidance emphasises this should only be a last resort, subject to complying with Government public health guidelines and regulations, for example on social distancing and shielding.

Firms will also need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate, the FCA said.

Gareth Shaw, head of money at Which?, said: “Raising the contactless payment limit will be helpful for those who are comfortable managing their money digitally and is further demonstration of the banking industry’s acceleration towards cashless payments.

“However, the focus cannot solely be on making things more convenient for those that can benefit from developments in payment technology. Millions of people still rely on cash to pay for essential products and the cash network needs to be protected for them, as the rapid pace of cash machines and bank branch closures shows no sign of slowing down.

“Legislation needs to be introduced by the Government as soon as possible to safeguard access, while the regulator must track cash acceptance, as legislation will be undermined if there is nowhere to spend it.”

A spokesman for trade association UK Finance said: “Contactless payments are increasingly popular, with many customers taking advantage of the higher £45 spending limit introduced by the banking and finance industry last year.

“The industry believes that a more flexible approach could be merited in future, which takes into account consumer demand, fraud prevention, security and convenience. UK Finance looks forward to seeing more details from the FCA on its proposals and will respond to its wider consultation on this issue in due course.

“Contactless is one of a range of payment methods and the industry will also continue to work closely with the regulator to ensure that customers can pay in a way that suits them.”

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