Banks raise the alarm over £100 contactless payment limit
Major UK banks are said to have raised concerns over an increase in the contactless payment limit to £100 due to the growing risk of fraud.
In his Budget tomorrow chancellor Rishi Sunak is expected to hike the cap on contactless spending from its current limit of £45.
But a string of high street lenders have urged the government and regulators to stagger the increase and put limits on the number of times cards can be used without a pin on a single day, Sky News reported.
The easing of rules on contactless payment has been touted as a benefit of Britain’s exit from the EU, which had imposed a limit of €50.
In January the Financial Conduct Authority announced it would open a consultation into lifting the limit to £100.
There has been a sharp increase in contactless payments since the start of the pandemic, with many merchants requiring the method as part of heightened hygiene measures.
In September contactless payments accounted for 64 per cent of all debit card transactions and 46 per cent of credit card payments, according to UK Finance.
Contactless payments were first introduced in 2007 with a £10 limit. The cap was raised again in April last year from £30 and £45 due to the outbreak of Covid-19.
Calls are now growing for the limit to be hiked further both as a so-called Brexit dividend and in order to adapt to changing consumer habits.
But concerns remain about the higher risk of fraud from contactless transactions, though this is not thought to have increased significantly since the UK limit changed to £45, according to the report.
UK Finance declined to comment.