Yahoo Finance Contactless card limit in UK could soon rise to £100
Shoppers may soon be allowed to pay up to £100 with a single tap after the City regulator said it was looking at increasing the payment limit for contactless cards.
The limit was raised to £45 last year, and on Wednesday the Financial Conduct Authority (FCA) announced that it could rise further in response to changing consumer behaviour and a fall in the number of shops accepting cash payments during the Covid-19 outbreak.
The announcement will put further pressure on the UK’s crumbling cash machine network, with critics saying the regulator is prioritising digital payments over protecting the ability of account holders to withdraw money without paying an ATM fee.
The ATM network operator Link believes cash today accounts for as little as 10% of all payments. According to UK Finance, more than 7 million people used cash only once a month or not at all in 2019, and fewer than a quarter of payments were made with cash, compared with 58% in 2009.
The pandemic has accelerated the shift, with many people – and shops – preferring not to handle physical money due to health concerns.
The FCA said: “Since the limit … was raised to £45 last April at the start of the pandemic, people are increasingly making use of contactless payments. It’s important that payments regulation keeps pace with consumer and merchant expectations.”
The proposal is expected to be put out to consultation shortly.
While the move will bring contactless card payments up to speed with other methods with no limits, such as Apple Pay, consumer advocates are concerned that millions of shoppers who rely on cash are being left behind.
Natalie Ceeney, the chair of the Access to Cash review, said: “The really pressing issue isn’t with digital payments, but protecting the cash infrastructure for those who can’t or aren’t ready to go digital. We need to support the most vulnerable in society, not just make life easier for those who are already digitally included. The regulators and government need to take action now so that millions don’t get left behind.”
A survey released by the consumer group Which? this month suggested 10 million people across the UK – including elderly and vulnerable consumers – rely on cash and would struggle without it.
Last year the Treasury said it was considering changing rules that would allow shops to offer cashback without a purchase and would put the FCA in charge of overseeing the UK’s cash system. However, the government has not yet put that legislation through parliament.
Gareth Shaw, the head of money at Which?, said: “Millions of people still rely on cash to pay for essential products and the cash network needs to be protected for them, as the rapid pace of cash machines and bank branch closures shows no sign of slowing down.
“Legislation needs to be introduced by the government as soon as possible to safeguard access, while the regulator must track cash acceptance, as legislation will be undermined if there is nowhere to spend it.”
