Banks push for UK to increase contactless limit to £100

I'd rather the banks focused on contactless and PIN as the next step forward to get the UK up to a level of cardholder convenience, commensurate with our European colleagues.

I'm very much in favour of the move from cash and COVID definitely is another case to do so, however, £100 would represent a massive increase to the limit for a non-authenticated payment. I fear it would also provide munition for conspiracy theorists who see the whole pandemic as being a tool to satisfy the desires of the finance industry.  I wonder what percentage of contactless transactions are using cards vs mobile phones, which of course do include authentication and don't have a limit.

The contactless limit is in place to address fraud, so raising the limit must address the impact on fraud and prevent any increase.

UK Finance figures from 2019 show contactless card fraud to be around 2.6p per £100 spent. However, this includes mobile contactless payments which are more secure and used for higher value payments, so the (unpublished) figure for plastic contactless card fraud is likely to be higher.

Any increase to the limit to £100 needs to consider the potential rise in fraud that could occur - logically, once a criminal has a contactless card, if they can spend 3 1/3 times as much on the card as in 2019 (when the limit was £30), then fraud could increase to at least 8p - 9p per £100 spent, higher than average fraud across all cards (7.2p per £100 spent).

The contactless fraud figures for 2020 since the first limit increase to £45 should indicate if raising the limit increases fraud and by how much. Let's hope UK Finance publish the figures so we can see, including the split between plastic card and mobile phone contactless payments.

Strong Factor Authentication is another consideration where a PIN is supposed to be required every 5 taps or cumulative ~£135 spend. This is a recent requirement that will help keep a lid on fraud but the FCA says it is unlikely to enforce it (due to Covid) for now provided other fraud risk controls are in place.

However, banks should really be promoting contactless mobile payments using their cards virtually (Apple Pay, Samsung Pay, Google Pay etc). These are far more secure than plastic cards (and meet SCA requirements), can already be used for payments greater than £100 and are a much better experience to use for customers.

However, banks can pay a fee for these, perhaps much higher than the cost of fraud they bear on contactless cards.

Overall, a complicated picture, but given that mobile payments are Covid-safe (more so than contactless cards with SCA) and secure, banks should do more to promote mobile payments. 

Does the EU impose a contactless cap at £45? News to me....