Contactless payments limit to more than double in the UK

The contactless payment limit is set to increase to more than double the previous amount.

Changes announced in today's Budget will see the legal limit increase from £45 to £100.

The new limit is legally in force from today but will not happen immediately as firms will need to make changes to their systems.

The banking industry is due to implement the new £100 limit later this year.

The Government have said that the increase has been made possible as a result of the UK's exit from the European Union.

This means that the UK is no longer bound by EU rulings on the maximum limit for contactless payment, which is currently set at £45.

Contactless cards were initially introduced with a limit of £10 in 2007.

The "tap and go" cards saw increases to £15 in 2010, £20 in 2012 and £30 in 2015.

In April 2020 the limit was raised to £45 as the coronavirus pandemic took hold.

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Chancellor Rishi Sunak said: "As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the UK."

This could further accelerate the decline of the use of physical cash, with coins and banknotes being used less during the pandemic.

A 2020 Bank of England study indicated that the risk of catching coronavirus from using banknotes is low.

The Government has pledged to legislate to protect the future of cash.

The Financial Conduct Authority (FCA) held a public consultation on contactless limits and recommended this change.
Eight out of 10 UK adults used contactless payments in 2019, and the Government have said that the increase in contactless limits will mean millions of payments will now be made simpler.

David Postings, chief executive of trade association UK Finance, said: "This is a great move for customers and will allow them to use contactless to pay for higher value transactions like their weekly shop or filling up their car with fuel.

"This could not have been achieved whilst still in the EU so is a true Brexit dividend. We will work closely with the payments sector and retailers ahead of increasing the limit later this year."

Pete Wickes, general manager for Europe, the Middle East and Africa at payments processing company Worldpay from FIS, said: "It is vital that shops and businesses have sufficient time to implement the changes given the current extraordinary operating conditions.

"Some consumers will also need time to adjust. Our research reveals that around 40% of UK consumers still have lingering doubts about contactless security. Education will be key."