UK banks call for contactless limit to be raised to £100

UK banks call for contactless limit to be raised to £100

UK banks are pushing the Treasury to increase the contactless payment limit from £45 to £100.

If approved, the move would be one of the UK’s first firm examples of parting company with the EU on banking standards.

Finance industry experts have also urged that raising the cap to £100 could help to reduce the spread of COVID-19 by doing away with the need for shoppers to enter their PINs, reducing face-to-face contact time with till workers and shortening queues.

An increase in the cap would also allow shoppers to pay for more expensive goods and services including items such as a tank of fuel, which on average now costs £62 for an average medium-sized car.



An EU-wide rule set by the European Commission limited contactless transactions to a maximum of €50, or £45, but since Brexit, the UK no longer needs to follow this.

The cap was raised from £30 in the UK in April to help reduce the spread of infection. Since then, bankers have urged that there has been no increase in fraud levels.

Merchants are charged the same processing fees whether the transaction is carried out by contactless or via PIN.

UK Finance, alongside card processing networks, brought forward the idea to the Treasury, however, it would require permission from the Financial Conduct Authority.

Increasing the cap could be introduced relatively quickly. Some large supermarket groups were able to deal with the last rise in less than two weeks but smaller retailers took longer. Card readers must be reprogrammed, which can be done remotely.

According to UK Finance, 62% of all debit card transactions and 46% of all credit card transactions in the UK are now done with the contactless function.

The total value of contactless transactions was £8.2 billion in September, the most recent month for data, up from £7bn in September 2019.

While contactless accounts for the bulk of transactions by number, it is still modest by value because the limit prevents it from being used for higher value purchases such as a family’s main weekly supermarket shop.

One banking source told The Times that the European Commission is ‘not as focused’ on raising the contactless spending cap as the UK. The source added that the Treasury response to the suggestion had been positive.

However, another banker, was more cautious, saying: “Brexit may provide more flexibility in the level of the contactless limit. However, the contactless limit at an industry level is subject to a robust process of review incorporating the views of merchants and financial services providers while balancing security requirements, as well as requiring regulatory input.”

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