The limit for a single payment using contactless card technology will be rising to £100 later this year, the Treasury has confirmed in the 2021 Budget
The COVID-19 pandemic has sped up a move away from physical cash, with shoppers often being encouraged to use contactless cards within many of the nation’s shops for public health reasons.
It has only been under a year since the contactless spending limit was raised from £30 to £45. Regulators have said that businesses throughout the country will still be able to decide for themselves whether or not to accept the higher spending limit.
Fears have also been raised regarding the risks of fraud involved in the use of contactless cards.
This comes after the unemployment rate in the UK rose to 5.1% in the three months leading up to December of 2020, with the number of people listed on company payrolls down 726,000 when compared to the pre-pandemic rate.
The use of contactless card technology by UK consumers has risen sharply within recent years, with more and more services adopting the technology, most shops offering contactless as an option.
To protect both workers and consumers during the coronavirus outbreak, an increase to the current spending limit of £45 was rushed through by regulators in April of 2020.
The latest figures have shown that the proportion of contactless payments in the UK had fallen slightly compared with the pre-pandemic levels, because of the lockdown measures hitting the use of pubs, restaurants and public transport throughout the nation. They accounted for 41% of all card transactions.
However, there had been a 16% increase in the total value of contactless payments within the UK in October, compared with the same period a year earlier, this is according to the latest data from UK Finance, which represents the nation’s banks.
The amount spent on contactless cards hit a monthly high in August, which was boosted by the Eat Out to Help Out scheme and fewer COVID-related restrictions in the country. A total of £8.4bn had been spent on both contactless credit and debit cards during that month.
This comes after a hunt is currently under way for one of the first people in the United Kingdom believed to have become infected with a Brazilian variant of COVID-19 that has been described as “variant of concern”.
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.”
However, there are now worries being raised about how the contactless spending limits could be raised further.
Ian Johnson, managing director, Europe, at payment business Marqeta, said: “The problem with increasing limits on physical contactless cards is if they are stolen or cloned, it will now be even easier for a fraudster to spend large sums of the victim’s money in one go.
“Physical cards provide very little security and a fraudster could continue to use their contactless function until they are cancelled.”