Changes to contactless and online payments are coming

There’s a significant change coming to how we spend our money. From 15th October, the spending limit for contactless card payments will rise from £45 to £100.

Industry body UK Finance announced the timetable for the national rollout of the spending limit increase, following the decision by HM Treasury and the Financial Conduct Authority.

It follows a public consultation and discussions with both the retail and banking sectors.

Back in April 2020, the contactless spending limit was increased successfully from £30 to £45.

From 15th October 2021, consumers will start to see retailers offering to accept contactless payments up to £100, giving them more flexibility when shopping in-store.

Retail terminals will need to be updated to accept the new limit, so it will likely take some time before all shops can accept the new £100 limit.

To check if the limit in a particular store has been increased from £45 to £100, shoppers should ask in-store or follow the prompts on the card payment machine when paying.

Consumers spending more than £100 in-store can continue to use Apple Pay or Google Pay. Due to their enhanced security measures (biometric technology), Apple Pay and Google Pay do not have an upper payment limit.

Shops will also accept chip and PIN and cash for higher-value transactions.

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.

“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.”

The 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.”

Another payment change coming into force is a new measure designed to help tackle bank fraud.

From September, online payments of more than £25 will be subject to new safety checks by debit and credit card providers.

The checks are designed to detect ‘abnormal’ online transactions as part of the Strong Customer Authentication rollout that has been phased in gradually since last year.

The change becomes law next year, but banks are advised to enforce the checks from September onwards.

As a result, when shopping online, you should expect to be asked to verify payments over £25.