UK retailers applaud new £100 contactless limit

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t is a significant rise and represents a successful lobbying exercise by retailers.

The decision of the UK Finance Minister to raise the contactless payment limit from £45 to £100 has sparked some strong reactions with retailers the most supportive.

For retailers, the higher spending limit brings bigger ticket items—including many articles of clothing—within the range of instant payments.

On the other hand, there is caution on the part of some banks as regards such a major rise in the limit.

Banks are urging governments and regulators to stagger the hike from the current limit of £45. They hope to curb the number of times contactless cards can be used on any single day because of what they view as a growing fraud risk.

The previous increase was a year ago

The spending limit for contactless card payments was increased last year from £30 to £45, with a national roll-out beginning from 1 April 2020.

The decision to raise the limit was taken following consultation between the retail sector and the finance and payments industry. It followed similar increases in several other European countries. The current limit of €50 is set by the European Commission.

The changes had been already under consideration by the industry, but the process was expedited as part of the industry’s response to the Covid-19 outbreak.

The move to £100 is part of a package of post-Brexit measures enabling the UK to diverge from the EU. UK Prime Minister Boris Johnson was told by business leaders earlier this year that an increase would be a potent symbol of Britain’s ability to go it alone.

The Treasury predicts easier transactions will give an extra shot in the arm to the struggling London retail sector, worth over £31bn.