The national roll-out of the new £100 ($138) spending limit for contactless card payments will begin from 15 October 2021, UK Finance said on Friday. The move is meant to gives customers more flexibility when shopping in-store.
The decision to raise the contactless limit from £45 to £100 was made by HM Treasury and the Financial Conduct Authority (FCA) following a public consultation and in discussion with the retail and banking sectors.
The FCA had said it was doing this to "recognise changing behaviour in how people pay".
In April last year the limit was increased from £30 to £45.
“Increasing the contactless limit will make it easier than ever to pay safely and securely – whether that’s at the local shops, or your favourite pub and restaurant,” said UK chancellor Rishi Sunak.
“As people get back to the high street, millions of payments will be made be simpler, providing a welcome boost for retailers and shoppers.”
Given the number of terminals that will need to be updated to accept the new limit, it may take some time for all retailers to get on board.
"The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit," said David Postings, UK Finance CEO.
There are still many ways to pay for customers who spend more than £100.
Mobile payments made via Apple Pay or Google Pay, for instance, do not have an upper limit when authenticated through biometric technologies such as fingerprint or facial recognition.
Last year the number of contactless payments made in the UK increased by 12% to 9.6 billion.
This was in part because Britons avoided touching cash in a bid to curb the spread of the coronavirus.
UK Finance’s 2021 Payment Markets Report said contactless payments accounted for 27% of all payments and found there are now 135 million contactless cards in circulation – 88% of debit cards and 81% of credit cards now offer this service.
Accenture has predicted that 11.6 billion transactions, worth up to £155bn, will shift from cash to cards and digital payments by 2023.
However, there have been concerns about a cashless society creating huge problems for the millions of people who live in rural areas or are in a lot of debt.
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