IIt’s a financial revolution that quietly began in September 2007. It was then that the first contactless bank cards were introduced in the UK, allowing people to ‘wave and pay’ for low value items. like a cup of coffee or a newspaper. At the time, spending was capped at Â£ 10.
Fourteen years later, with at least 135 million contactless cards in circulation and the technology accounting for 9.6 billion payments per year and growing, the limit is set to rise to Â£ 100. The change, which takes effect on Friday 15 October, will more than double the current cap of Â£ 45.
Not everyone is a fan of the new spending limit. Some have called it a âthief’s dreamâ because it means that criminals will be able to take a lot more of your money with every transaction if your card is lost or stolen. Meanwhile, some worry that the new limit will make it too easy for people to lose track of what they’re spending, leaving them racking up big bills without giving it much thought.
Will i be able use the new Â£ 100 limit from day one?
Strictly speaking, October 15 marks the start of the national deployment. Most, if not all, banks will be ready, but – given the number of payment terminals that need to be updated – it may take some time before each store accepts the highest payments.
The British Retail Consortium has noted that not all retailers intend to implement the new limit, and that for those who do, “the change could take days, weeks or months before it becomes available in stores “. The co-op’s food stores told us they were considering whether or when to implement the change.
The BRC said customers should be aware that different companies may have different boundaries in place or be at a different stage in the process. He added: “Please make sure your transaction has been successfully completed before you leave the checkout.” This is a reference to what is called in the industry contactless walk, where a customer using a self-checkout is asked to enter their PIN code but doesn’t notice it and inadvertently walks out of the store with merchandise they think they’ve paid for but didn’t.
And if I prefer the lower limit?
Your bank may allow you to define yours. For example, Lloyds Bank, Halifax and Bank of Scotland customers will be able to choose a contactless limit between Â£ 30 and Â£ 95, in increments of Â£ 5. They will be able to do this via the mobile application. This will apply initially to debit cards, credit cards – including the MBNA brand – should follow a little later.
Likewise, Starling Digital Bank customers will be able to select a limit between Â£ 0 and Â£ 100, in increments of Â£ 10, through its app.
HSBC, Barclays and Monzo have told us that they currently do not offer individual limits.
The National Construction Company and Santander say they plan to make it available in the near future.
Can I turn off contactless completely?
Many banks – including NatWest, Lloyds, Halifax, Bank of Scotland, Santander, Nationwide, and Starling – allow their customers to turn off contactless, usually through their apps.
Several big names, including HSBC, Lloyds, Halifax, Bank of Scotland, Santander and Nationwide, will allow customers to apply for a contactless card.
Some like Barclays, NatWest and Monzo allow people who have lost their card to âfreezeâ it so that it cannot be used by someone else.
Will I still need to use my PIN from time to time?
When they reach a certain number of contactless transactions or a certain spending level, cardholders must enter their PIN code to pay. This is to prevent card thieves from indulging in huge contactless spending.
Under official Financial Conduct Authority (FCA) rules, this is either a maximum of five consecutive transactions or a maximum ‘cumulative’ threshold of Â£ 130 on multiple purchases. The FCA unveiled a few months ago that the financial sector has generally chosen to apply a cap on cumulative spending rather than a cap involving back-to-back purchases, and one bank told us, âEverything is done on the cumulative limit.
On October 15, the maximum cumulative threshold is more than double to Â£ 300, which could alarm some.
What is important, however, is that individual banks and card companies can, and do, set their own limits within the maximum limits. They usually don’t advertise for safety reasons, but they can be well below FCA limits. Monzo currently has a cumulative spending cap of Â£ 100 and adds: âDiscussions are currently underway on whether to change this threshold. “
Is contactless card fraud a problem?
A financial institution told Guardian Money this week that when speaking to its customers, “this is something people really care about.” For example, there is the fear that a thief could rack up a big bill with your card or that a criminal could graze you and use a high-tech device to steal your card details while your plastic is in your pocket. .
However, banks claim that criminals tend to be more interested in scams involving larger sums of money, and the latest figures from the banking sector the supporter. In the first six months of this year, contactless fraud – covering cards and mobile phones – totaled Â£ 7.6million, according to banking organization UK Finance.
The total amount spent without contact in the first six months of this year was Â£ 66.5 billion.
At Â£ 355million, the amount lost to wire transfer scams (AKA authorized push payment fraud) in the first six months of this year was 47 times greater than that lost to contactless fraud .
The fact that a contactless card can be quickly blocked in the event of loss or theft limits potential financial damage, as does the fact that if you are already close to your transaction limit when your card is stolen, the thief could only use it once or twice before you need to enter the PIN code.
That said, the pandemic has reduced the opportunities for scammers, and the higher limit will make this type of crime more attractive.
UK Finance says people shouldn’t be worried. âYou are fully protected against fraud, so you get all your money back and will never be left out,â he says. âIf you notice any suspicious activity on your account, contact your bank immediately. It is not clear what proportion of cases are disputed by banks, although it is understood that the Financial mediation service, which resolves disputes between consumers and companies that provide financial services, does not receive many complaints about contactless cards.
The FCA said earlier this year: “Contactless payments remain relatively secure compared to other payment methods” – and that there has been no noticeable increase in fraudulent transactions in other countries where the contactless limit was equivalent to Â£ 100 or more.
These include Canada, Singapore and Australia, which have increased their unique limits to 250 Canadian dollars (Â£ 146), 200 Singapore dollars (108), and 200 Australian dollars (Â£ 107), respectively.
Google Pay and Apple Pay: No Limits on Phone Payments
Google Pay and Apple Pay users have already been able to touch and go for larger buyers than those who rely on contactless cards for their spending.
This is not the case everywhere – although transactions are not limited, some merchants have opted for an online cap with card payments. Others, however, allow greater expenses.
Apple Pay and Google Pay support most UK bank cards: you add your credit or debit card details to the corresponding app on your phone, then verify them with your bank, usually via an SMS code or a phone call.
You can then make payments with your phone wherever the contactless symbol is displayed, including abroad and on public transport.
Google Pay and Apple Pay differ in the way you use them in a store. By default, Google Pay on Android behaves the same as a contactless credit card: just turn on your phone screen and press the reader to pay for goods or public transport to your doorstep. ‘limit contactless in the UK. You have to unlock your phone to pay over the limit. For added security, you can configure it so that all Google Pay transactions must be authenticated this way.
Paying with an iPhone is a bit more complicated. Apple Pay asks you to open the Wallet app by double-tapping the power button, then authenticating the payment with Face or Touch ID before you touch your phone to the card machine or reader. To speed up payment on public transport, you can set a credit card to use for “Express travelÂ»On TfL services, First or Arriva buses.
Authenticated payments above the UK contactless limit with both services require the store to support them. Among the few retailers that do are Aldi, Ikea, Waitrose, and Marks & Spencer.
Both services give merchants virtual account numbers when you pay, which protects your real card details. Neither will allow payments when your phone is completely off and not unlocked. Requiring a PIN, face or fingerprint before paying makes them more secure than a contactless credit card. Locking your phone remotely if you lose it using device location services from Apple and Google blocks contactless payments.
Other mobile payment competitors include Samsung Pay, Garmin Pay, and Fitbit Pay, which are available on their respective devices, but UK banking support for them is much more limited.