The way we use contactless card payments is set to change next month so a personal finance expert set out to discover if the new £100 limit good or bad for consumers.
Since its introduction in September 2007 contactless tapping has become the norm and now 64% of all of our transactions on debit cards are pin-less.
Andy Webb from BeCleverWithYourCash notes that only a year and a half ago there was talk from some shoppers of the £30 limit being too high but we soon got used to it.
He looks at everything from fraud concerns and security to the pros and cons of the new convenient cash available at a tap as well as some tips for those worried about losing track of taps.
Are contactless payments safe?
From October 15th 2021 the limit will jump from £45 to £100 which is the highest its ever been.
Andy acknowledges that this could make people more attracted to the idea of stealing our cards but he says this doesn't happen much and there is also very little evidence to suggest criminals are able to tap our cards through our wallets.
He reminds us that there are protections in place in the form of a five transaction limit- meaning after five taps you will have to use your pin.
This also happens if you spend a total of £300 across multiple contactless purchases.
So this means the biggest loss you'll experience is £300 and you will get this money back from your bank.
Limiting contactless fraud
Andy said: "You can also limit any losses with most banks by enabling a couple of features in the app.
"One is to get instant notifications each time the card is used. If one pops up on your phone and it wasn’t you, then you know to take action."
Some apps allow us to easily freeze accounts so if we think something fishy is going on we can put a stop to spending without cancelling the card completely.
Our spending
The biggest impact on our day to day lives will be that the majority of our card transactions will be accepted and we will be able to make larger buys.
Andy says that he would be worried shoppers will lose track of spending: "When you hand over notes and coins or look at the total on a PIN keypad, you are much more aware of what you are spending.
And this registers, even subconsciously. You are more likely to adjust future spending and have a more accurate idea of how much is in your account."
He says that it's important for shoppers to back and look at receipts and bank statements on their phones regularly to keep up to date with how much they are spending to see how much of an impact individual spending is having on bank balances.
He added: "It’s also possible that some banks might add in the facility for you to set your own lower contactless limit – a good idea if you’re worried you’ll spend more than you should."
We already have high limits on smart devices
Andy makes the point that those who use smart devices like Apple Pay, Samsung Pay or Google Pay to make regular payments will already be used to a much higher spending cap.
If you are worried about being able to manage the higher spending cap but use your phone to pay then you already have the practice.
These devices are much safer because they have a thumb or facial recognition barrier and second security measures.
He said: "And it’s possible we could see that technology come to cards too. A few years ago Natwest trialed biometric debit cards – though we’re yet to see them roll out to customers."
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