News and resources on payments systems, innovations and initiatives worldwide.
Sunak to pitch increase in contactless limit to £100 as 'Brexit dividend'

Sunak to pitch increase in contactless limit to £100 as 'Brexit dividend'

UK chancellor Rishi Sunak is set to announce a change in the contactless limit from £45 to £100 in his budget speech this week.

Industry body UK Finance is believed to have pitched the increase to the Treasury, where it is being seen as symbolic of Britain's ability to make its own rules following its split from the European Union.

The limit was only raised from £30 to £45 in April, partly in response to the Covid-19 pandemic, which has prompted a surge in tap and pay at the expense of cash.

In September, contactless accounted for 64% of all debit card transactions and 46% of credit card transactions, according to UK Finance.

The Financial Conduct Authority announced in January that it was conducting a consultation on a possible lift in the contactless limit. "It’s important that payments regulation keeps pace with consumer and merchant expectations," noted the FCA. "Recognising changing behaviour in how people pay, as part of a wider consultation, we will shortly be seeking views on amending our rules to allow for a possible increase in the contactless limit to £100."

Sky News is reporting that some major banks have sounded the alarm bell over the proposed new ceiling, preferring a more cautious staggered increase to curb the risk of fraud.

Starling Bank for one has floated the idea of giving customers an opt-out mechanism from within the app.

With the potential for fraud risk rising, industry observers expect more attention to focus on the use of QR codes as an alternative to tap-and-go transactions and an upsurge in bometrically-secured limit-busting mobile contactless transactions.

Contactless payments first arrived in the UK in 2007, with a £10 ceiling which has been gradually increased over the last decade.

Comments: (6)

A Finextra member
A Finextra member 02 March, 2021, 12:141 like 1 like

A Brexit dividend? Where did that idea come from?

Maybe what did cost 45 pounds will now cost 100 pounds after Brexit? that I can believe, but calling it a dividend is harder to understand!!


Peter Seymour
Peter Seymour - Cenerva Limited - London 02 March, 2021, 12:221 like 1 like

Is this HMT following the tune of UK Finance and Visa/MC whilst it keeps putting back legaslation on Access to Cash. Where is HMTs joined up strategy? Increasing the contact limit within a Cash Acceptance/Access to Cash strategy will only damage the already left behind even further ...       

Daniel Blondell
Daniel Blondell - McLEAR - London 02 March, 2021, 12:29Be the first to give this comment the thumbs up 0 likes

Will be interesting to see what happens to SCA. Currently users are expected to authenticate by PIN once you spend £100/€125. Pointless being able to make 1 contactless transaction at £100 and then having to make a chip & PIN transaction to reset SCA limit counters. 

A Finextra member
A Finextra member 02 March, 2021, 13:53Be the first to give this comment the thumbs up 0 likes

HMT should bear in mind that the "limit" of 45 £ is a cap on the card issuer´s voluntary acceptance of using an exception from requiring PIN for each payment (SCA requirement on all electronic payments) or other SCA. Cardholders can today legally claim not having made the payment and leave the issuer with the risk. Also as Daniel points out the accumulated payments "limit" of 100 £  before PIN has to be performed anyway is part of the legislation and would trigger PIN usage after each 100£ payment. If issuers do not want to assume the risk increase above 45 £ payment nothing happens. The industry also needs a common limit since the payments infra cannot handle individual or per issuer varying limits. Already now a vast majority of all debit card payments can be made in contactless without PIN since they are below 45 £ and very high contactless transactions can be made with PIN. Is there a special HMT need to reduce the quality of card payments and expose issuers to a greater risk by removing the basic rule on PIN or other SCA? 


A Finextra member
A Finextra member 02 March, 2021, 17:00Be the first to give this comment the thumbs up 0 likes

It isn't intuitive that contactless doesn't extend to cashback.  So £10 cashback requires PIN, but £45 purchase does not.

A Finextra member
A Finextra member 02 March, 2021, 17:02Be the first to give this comment the thumbs up 0 likes

Where is the evidence that consumers want a £100 limit?

What if retailers don't want a £100 limit. Will they have to comply?

Merchants with unattended terminals are already seeing customers 'walking out' without paying having tapped their card and thinking that they have - but not realising when they leave that the terminal is prompting for a pin verification. The BRC estimate this is already costing merchants over £30M a year. This will increase merchants risk significantly. Hopefully the FCA consultation will address this point first.