The UK financial services regulator is seeking views on raising the limit for contactless payments to £100, following request from a banking industry body.
Earlier this month, UK Finance asked the Treasury to consider increasing the maximum amount that can be paid using contactless cards from £45 to £100.
The Financial Conduct Authority (FCA) has agreed and will seek views on the potential increase. “It is important that payments regulation keeps pace with consumer and merchant expectations,” said the FCA.
“Recognising changing behaviour in how people pay, as part of a wider consultation, we will shortly be seeking views on amending our rules to allow for a possible increase in the contactless limit to £100.”
Contactless cards, which enable users to make payments by scanning a reader when checking out, were first introduced in 2007 with a £10 spending limit. This limit has gradually increased, and the maximum contactless payment permitted is now £45 after it was raised from £30 in April 2020.
Consumers have rapidly turned to this payment method, attracted by its convenience, and the take-up of contactless has broadened during the Covid-19 pandemic, with consumers encouraged not to use cash and reduce physical contact.
According to data from Barclaycard, contactless payments accounted for 88.6% of total card payments in 2020 as restrictions on contact-based payments drove people to contactless.
Despite many shops closing for long periods during lockdowns to reduce the spread of Covid-19, the total value of contactless payments increased by 7% in 2020 compared with 2019.
For example, there was a 29% increase in the use of contactless in UK grocery stores.
But despite the promise of economic benefits, fears over the risk of fraud being committed through contactless cards is a factor considered by regulators. Contactless cards do not verify whether the person making the payment is the card owner. This is different from a payment method such as Apple Pay, in which a fingerprint is needed, and as a result, spending on contactless cards is limited.
UK Finance said contactless fraud equated to just 2.5p in every £100 spent last year.