The UK financial regulator just dropped a bombshell! From March 19, 2024 onwards, they will be eliminating the contactless card payment limit of £100. With this change, consumers can spend up to $100 without entering their PIN, accelerating the checkout process and making shopping faster and easier. The move comes after years of measured increases to the contactless payment limit since its introduction in 2007.
Contactless payments first appeared in the UK in 2007, with a £10 limit on transactions. This cap was incrementally increased over the subsequent years to £15 in 2010, £20 in 2012 and £30 in 2015. In reaction to the ever-shifting “faster future” imposed by the Covid pandemic, this limit was raised to £45 in 2020. It subsequently increased to £100 in October 2021. Consumer protection This latest proposed change would give consumers more flexibility in how they spend their money.
David Geale, executive director of payments and digital finance at United Kingdom’s Financial Conduct Authority (FCA), underscored one important aspect. He emphasized that it is extremely important for rules to reflect changes in consumers’ interests.
“Contactless is people’s favoured way to pay. We want to make sure our rules provide flexibility for the future, and choice for both firms and consumers.” – David Geale
The adjustments are not without caution. Richard Whittle, a research economist at the University of Salford, pointed to dangers in raising spending caps.
“If this ease of payment leads to consumers spending without thinking, they may be more likely to buy what they don’t really want or need.” – Richard Whittle
Even with these worries, most people in the industry are optimistic about the removal of the limit. Kate Nicholls, the chief executive of UKHospitality, discussed how this amendment’s passage would serve hospitality businesses. It will do wonders for her members and perk up high street businesses too.
“Contactless has increasingly become the preferred payment method of choice for many people, and lifting the limit can mean quicker and easier experiences for consumers. While many people still prefer to use cash or chip and pin, this change adds much-needed flexibility for providers and consumers.” – Kate Nicholls
The new rules return to a cumulative limit of £300 or five “taps.” Thereafter, the customer needs to input their PIN number. A consultation on this most recent hike started earlier this year, part of a long string of attempts to adjust to changing consumer demand and stay ahead of the curve.