A City lobby group, UK Finance, which represents more than 250 firms across the finance industry, has urged the Treasury to increase the limit on contactless card payments to £100.
The proposal has been suggested to help prevent the spread of coronavirus, as contactless payments remove the need for shoppers to touch the Chip and Pin machines.
Back in April 2020, the contactless limit was increased from £30 to £45 – a move already being considered but accelerated by the COVID-19 pandemic.
How Can Contactless Payments Help to Stop the Spread of COVID?
Hygiene is the number one priority for most retailers during the pandemic, as seen by the copious amounts of social distancing measures brought in to prevent the spread. The virus is transmitted from person to person through respiratory droplets found on surfaces – like Chip and Pin machines.
Contactless payments help to reduce the transmission (as well as hand washing and other preventative measures) as you don’t need to type in a PIN number on a machine heavily used by shoppers.
Although, the potential increase will also be a visible sign of Britain’s move towards independence as the country will no longer need approval from EU and European Commission to increase the contactless limit.
What Does the Potential Increase Mean for Me?
Since the introduction of contactless payment technology in 2007, the limit has increased from £10 to £15 in 2010, £20 in 2012 and £30 in 2015 to match the growing need for quick and efficient payments.
The efficiency of contactless payments is said to help speed up the process of queue lines within shops – especially throughout the pandemic where panic buying and day trips to the supermarket have become a common occurrence.
Will Cash-Based Payments Still be Accepted?
It does come down to where you shop, some smaller essential retailers are choosing to decline cash as a payment method.
However, the World Health Organisation, European Central Bank and the Bank of England have confirmed that there’s no scientific evidence that shows an increased risk of spreading the virus through the use of cash.
Will This Increase the Risk of Fraud?
The issue with contactless payments is the lack of security. There’s no need to enter a pin number or for retailers to match your identity to the bank card.
Currently, in one transaction you can lose a maximum of £45 with five contactless payments allowed in one day by most banking providers. The security of the proposed £100 limit will need to be considered before being introduced to society.
However, research by UK Finance has revealed that contactless fraud on bank cards and mobile devices still remains pretty low.
In 2019, contactless fraud equated to just 2.5p (£0.0025) of every £100 spent, which represents just 3.3% of overall card fraud, even though at the time 44% of all payments were made using contactless technology.
France is Leading the way in Contactless Payment Security
Additionally, there are projects due to be rolled out – as seen by the French bank, BNP Paribas – which provide account holders with new contactless Visa debit cards containing biometric authentication (fingerprint) allowing shoppers to make large value contactless purchases in a secure way.
This feature will be a game-changer for contactless payments across the globe and give individuals peace of mind when paying for goods and services.
The Benefits of Contactless Payments
Whether the contactless limit is increased from £45 to £100 or not, it’s clear that the technology has a range of benefits for both consumers and retailers alike, reinforced by the ever-growing number of people choosing to use contactless payment methods across the UK.
This is not only through the improved hygiene aspect of making a payment but also through the speed and efficiency contactless technology brings to the table.