A new £100 spending limit for contactless card payments will be introduced in the UK from 15 October 2021, up from the current $45 limit, UK Finance has announced.
HM Treasury and UK regulator the Financial Conduct Authority made the decision to increase the contactless limit following a public consultation and discussions with the retail and banking sectors, after revealing in March the changes to its rules to allow for the contactless limit increase to £100.
According to the most recent data from UK Finance, contactless payments made in the UK accounted for 49% of all credit card and 65% of all debit card transactions in May this year.
It reported 1,105 million contactless card transactions in May, up 102.3% on the 546 million in May 2020 and 52.8% higher than the 723 million made in May 2019. The total value of contactless transactions reached £13.7 billion in May this year, an increase of 91.9% on £7.1 billion in May 2020.
UK Finance, which represents the banking and finance industry and manages the process for setting the industry contactless limit, warned that it will “take some time” for the new limit to be introduced across all retailers given the number of terminals which will need to be updated to accept it.
David Postings, chief executive of UK Finance, said: “Contactless payment has proved very popular with consumers and an increasing number of transactions are being made using contactless technology. The increase in the limit to £100 will allow people to pay for higher value transactions like their weekly shop or filling up their car with fuel.”
Postings added: “The payments industry has worked hard to put in place the infrastructure to enable retailers to update their payments systems so they can start to offer their customers this new higher limit.”
UK Chancellor Rishi Sunak said: “Increasing the contactless limit will make it easier than ever to pay safely and securely – whether that’s at the local shops, or your favourite pub and restaurant.
“As people get back to the high street, millions of payments will made be simpler, providing a welcome boost for retailers and shoppers.”