Budget 2021: Contactless payment limit to rise to £100
The contactless card payment limit will rise from £45 to £100, the Treasury has confirmed. The news comes ahead of today's Budget, although Chancellor Rishi Sunak is expected to formally announce the shake-up in his speech.
While legally in force from today, the changes to limits won't happen in practice immediately, as businesses will need to update their systems. The increase comes after regulator the Financial Conduct Authority (FCA) held a public consultation on contactless limits and recommended the change.
The limit for contactless card payments rose from £30 to £45 at the start of the coronavirus pandemic in April 2020, and since then people have increasingly made use of contactless payments. The current £45 contactless card limit is three times the amount it was in 2010. In 2007, contactless cards initially had a limit of £10, which you could spend without entering a PIN. This rose to £15 in 2010, to £20 in 2012 and to £30 in 2015.
In comparison, similar contactless payment technology – such as that offered by Apple Pay, Google Pay and Samsung Pay – doesn't have a cap on the cost of transactions, although some retailers may choose to set a lower transaction limit to coincide with the cap used for contactless cards.
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No rise in fraud when limit raised last year
Responding to concerns that raising the contactless limit could lead to increased levels of fraud, the Treasury said there was no significant rise in reported fraud when the limit was raised from £30 to £45 last year. It added that reported fraud equated to 0.02% of the total spent using contactless cards since April 2020.
Mr 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 capital."
A poll by Martin Lewis in January showed people supported the change
A poll run by MoneySavingExpert.com founder Martin Lewis on his Twitter account in January showed that most people were supportive of the FCA's plans to increase to the contactless limit.
The poll isn't scientific, but it gives a good indication of people's feelings towards the move, with over 53% saying they supported the change.