Six ways to protect your cash from fraud ahead of contactless limit increase this week

By Linda Howard

The limit on contactless payments is set to rise for the second time in less than two years from this week as the UK Government tries to get people to spend more in shops now that restrictions are no longer in place.

UK Finance confirmed shoppers across the UK will be able to pay up to £100 using their contactless cards from October 15.

The increase had already been announced by the UK Government earlier this year, but banks had not yet decided when to implement it. However, consumers should be aware that some shops might take longer to introduce the new limit, because they need to update their terminals.

From Friday, the new contactless payment spending limit of £100 will officially be the highest in Europe.

However, with the higher spending limit before a PIN is required, also comes a higher risk of fraud.

Nick Fryer, Chief Technology Officer at card machine provider, Dojo, explains what the increase means for customer safety.

He said: “ Contactless payments now account for 27% of all payments, this is partly due to the Covid-19 pandemic as consumers no longer want to handle cash and touch payment terminals.

“Due to the increased safety, convenience and protection, six out of ten debit card payments are now contactless, opposed to just four out of ten in 2019.”

He also highlighted how consumers are used to higher contactless limits due to the popularity of Apple and Google Pay systems, which offer less transaction restrictions on mobile devices.

“Some consumers fear the potential fraud risks that come with a higher limit. To help combat this the second Payment Services Directive (PSD2) implements a limit to the number of contactless payments you can make through its Strong Customer Authentication (SCA), meaning customers can only make five payments using contactless (or if the sum of consecutive contactless transactions exceeds £150) before chip and pin is required,” Nick added.

Lloyds Bank, Halifax and the Bank of Scotland have already announced personalised contactless limits to allow customers to set their contactless spend limit to their desired amount for peace of mind.

Six tips to stay secure with contactless spending

The increased use of technology has caused the number of scams to increase, in particular during the pandemic, so it is essential to protect yourself from falling victim to fraud.

Below are six tips to follow to ensure you feel safe and secure with your finances.

The contactless card payment limit will rise from £45 to £100 on October 15 (Dojo)

Check your bank statement regularly

Something that we have access to, yet almost always forget. Often with contactless payments we forget to check our bank statements, so can lose track of our outgoings. A good tip is to make sure you keep a log of your transactions, so if you have a statement of money that looks odd, you can check it straight away. Ensure you set up biometric login on your devices if possible, this reduces the chances of your passwords being compromised.

Check if your bank allows you to set a contactless limit

The Lloyds banking group, Halifax and Bank of Scotland are allowing their customers to choose their own contactless spend limit. This is helpful for consumers that want tighter control over their spending limits for budget control especially, as contactless allows consumers to spend more, faster. If you’re concerned about how the £100 limit may affect your spending habits, check if your bank sets a limit. If not, there are debit and credit cards that allow you to set budget goals.

Turn your online banking notifications on

Most online bank providers allow you to turn on notifications to notify you when a payment is taken from your bank account, this is a great way to stop any unwanted surprises when you go to check your bank statement. It is also a great way to keep track of your spending and outgoings on a monthly basis.

Spread your money across different accounts

Once you have your salary for the month, try splitting it across different accounts. Bills can go into one account whereas shopping and socialising can go into another. If money going missing is a concern, and if this does happen, you will have money in these other accounts, so you’re not losing months’ worth of salary in one go.

Know the signs of a scam

Since the beginning of the pandemic, there has been a rise of scammers targeting people online. Through impersonation scams, romance fraud and investment scams, consumers have been at even more risk than before to be victim to an online scam.

It is essential to know the signs of a scam to keep your finances secure, these include:

  • If someone you don’t know randomly contacts you
  • You are pressured into buying something
  • You are asked to pay in an unusual way, such as cryptocurrency, gift cards or wire transfer

Use a protective cardholder

Purchase a protective cardholder that blocks out radio signals used by fraudsters to activate your contactless when they walk past you.

With fraud on the rise during Covid-19, criminals have become more tech-savvy and while it’s an unlikely event, there’s a small possibility they could steal your card details just by being in your close proximity. The physical card does not even need to be stolen, the details of the card can be taken from you and used elsewhere on the internet.

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