The contactless payment limit will rise to £100 in October, banks have confirmed, sparking concerns the move could fuel a rise in fraud.
Limits will be increased from 15 October, but some retailers may take more time to introduce the changes as terminals will need to be updated, according to UK Finance, the banking trade body.
The rise will be the second in two years, following an increase to the limit to £45 from £30 last April. Changing behaviour during the pandemic encouraged the Government to change the rules. Cash use plummeted during the lockdown – partly over unfounded fears over using cash – while shoppers were also wary about touching chip and pin terminals.
Chancellor Rishi Sunak said the move would “make it easier to pay safely and securely”, as well as provide a “welcome boost” for retailers and shoppers.
However, experts have warned that raising the contactless limit could further fuel the fraud crisis, giving thieves access to more significant amounts of cash from stolen cards.
Laura Suter of fund shop AJ Bell said: “While the move brings more convenience for some, it is a thief’s dream, as they can take far more of your money in each transaction if your card is lost or stolen.
“By spending £100 a pop without having to put in a Pin, it would be very easy for thieves to blitz through money quickly before you even spotted the card had been stolen.”
James Daley of consumer group Fairer Finance said: “It’s much more attractive for petty criminals to steal cards and use them a few times if they can spend up to a three-figure sum.”
Mr Daley added that banks should take steps to refund customers “without quibble” if there was an increase in fraud due to the limit being raised.
“It’s often much harder to prove that a contactless payment was fraudulent, and it will often come down to the bank having to take the customer’s word,” he said. “If they are going to increase the limit, they need to be ready to stand by customers who end up being victims of theft and fraud.”
The Treasury first announced the increase in the March budget. The £100 limit will be 10 times the initial limit of £10 per transaction when the payment method was introduced in 2007.
The news comes as research by Voucher Codes and the Centre for Retail Research predicted contactless spending will become the most popular payment method by the end of 2022, accounting for 47pc of all retail purchases.
Andrew Hagger, of Moneycomms, said: “I’m not sure there is great demand from consumers for this large contactless limit increase. I’m sure consumers would have had no issues of being asked for their pin for transactions over £45.”
Other payments forms, such as Apple and Google Pay, do not have an upper limit on transactions but use biometric technology as an extra layer of security.