Banks Ask UK Treasury To Increase Limit On Contactless Payments

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The U.K. might up its amount for contactless payments from £45 to £100 in one of its first actions after officially leaving the European Union (EU), a report from The Daily Mail says.

This update would mean more convenience for shoppers, but would also symbolize a step away from the EU’s rules.

It could also take steps toward reducing COVID-19 spread as it gives people more incentive to pay in a contactless manner and touch fewer surfaces.

An unnamed banker told the Daily Mail that the Brexit split could end up providing “more flexibility.”

UK Finance, a City lobby group, posited the idea originally, the report says, in a joint recommendation with card service providers.

The contactless cards, or ‘tap and go’ cards, were first introduced in 2007 and only had a limit of £10, which was then increased to £15 in 2010, to £20 in 2012 and to £30 in 2015, before settling on £45 or £50 in the agreement with the European Commission last March, as part of the EU response to the ongoing pandemic.

The update isn’t likely to have much sway with merchants, as they get the same level of charges for chip and pin payments as they do for contactless. And, the report notes that the updates to card processing machines to include contactless could be done remotely, but will be gradual due to the large amount of them needing to be updated.

Last September, the amount of debit card payments made in contactless ways hit its height thus far, the report says, with 64 percent of all U.K. debit card transactions using the model and 46 percent of credit card transactions as well.

In response to the raise in limits for contactless payments, Mark Barnett, Mastercard’s divisional president in the U.K., said that given the pandemic’s long-term confusion and financial insecurity, it made sense to adapt to new forms of payment. He said providing choice in the method of how people pay is important.

Source: PYMNTS

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