It is a financial revolution that began quietly in September 2007. It was then that the UK introduced the first contactless bank cards, which allowed people to “wave and pay” for low value items like a cup of coffee or a newspaper. At the time, spending was capped at £ 10.
Fourteen years later, with at least 135 million contactless cards in circulation and the technology making 9.6 billion payments a year, the limit will rise to 100 pounds. This change, which goes into effect on Friday October 15th, will more than double the current ceiling of £ 45.
Not everyone is a fan of the new spending limit. Some have called it a “thief’s dream” because it means that if your card is lost or stolen, criminals can take much more of your money with every transaction. In the meantime, there are fears that the new limit will make it too easy for people to lose track of their expenses and let them pile up big bills without much thought.
I will be able to use the new 100 euro limit from day one?
Strictly speaking, October 15 is the starting signal for the national rollout. Most, if not all, banks will be ready, but given the number of payment terminals to be upgraded, it may take some time for each shop to accept the higher payments.
The British Retail Consortium said that not all retailers plan to introduce the new limit and that for those who do, “the change could take days, weeks or months before it becomes available in stores”. The cooperative’s grocery stores informed us that they are looking into whether or when the change should be implemented.
The BRC said customers should be aware that different companies have different restrictions or may be at a different stage in the process. It added, “Please make sure your transaction has been successfully completed before you exit the checkout.” This is an indication of what is known in the industry as a contactless walk-off, where a customer using a self-checkout is asked to enter their PIN but fails to notice and accidentally leaves the store with goods from them he thinks he paid her for but not.
What if I prefer the lower limit?
Your bank may allow you to wager your own. For example, Lloyds Bank, Halifax and Bank of Scotland customers can choose a contactless limit between £ 30 and £ 95 in increments of £ 5. You will be able to do this through the mobile app. This applies initially to debit cards, credit cards – including the MBNA brand – are to follow a little later.
Customers of the digital bank Starling can also use their app to select a limit between 0 and 100 GBP in steps of 10 GBP.
HSBC, Barclays and Monzo have told us that they do not currently offer individual limits.
The nationwide building society and Santander plan to make this available in the near future.
Can I completely unsubscribe from contactless??
Many banks – including NatWest, Lloyds, Halifax, Bank of Scotland, Santander, Nationwide and Starling – allow their customers to switch off contactlessly, mostly via their apps.
Several big names, including HSBC, Lloyds, Halifax, Bank of Scotland, Santander, and Nationwide, have customers request a contactless card.
Some like Barclays, NatWest and Monzo have people who have lost their card “freeze” it so that it cannot be used by anyone else.
Do I still have to use my pin every now and then?
When they reach a certain number of contactless transactions or spend, cardholders must enter their PIN to pay. This is to keep card thieves from throwing huge contactless buying frenzies.
According to the official rules of the Financial Conduct Authority (FCA), there is either a maximum of five consecutive transactions or a maximum “cumulative” threshold of £ 130 for multiple purchases. The FCA announced a few months ago that the financial industry in general has opted for a cumulative spending cap rather than one with back-to-back purchases, and one bank told us, “Everything is done on the cumulative limit.”
On October 15, the maximum cumulative threshold more than doubled to £ 300, which may be a concern for some.
It is important, however, that individual banks and card companies can and do set their own limits within the maximum limits. They usually don’t advertise it for safety reasons, but they can be well below the FCA limits. Monzo currently has a cumulative spending cap of £ 100, adding, “Discussions are ongoing about the possibility of changing this threshold.”
Is Contactless Card Fraud a Big Deal?
A financial institution told Guardian Money this week that when they talk to customers, people really worry. For example, there is a fear that a thief could blow up a large bill with your card, or that a criminal could attack you and use a high-tech device to steal your card details while your plastic is in your pocket.
However, banks say that criminals are more interested in scams involving larger sums of money, and the latest banking industry figures bear this out. In the first six months of this year, contactless fraud – on cards and cell phones – amounted to £ 7.6 million, according to UK Finance.
The total amount contactless spent in the first six months of this year was $ 66.5 billion.
At £ 355 million, the loss to bank transfer (AKA authorized push payment fraud) fraud in the first six months of this year was 47 times greater than the loss to contactless fraud.
The fact that a contactless card can be quickly blocked if lost or stolen limits the potential financial damage, as does the fact that if you are close to your transaction limit when you steal your card, the thief may only be able to do so Use it once or twice before you have to enter the PIN.
However, the pandemic has reduced the opportunities for crooks, and the higher limit will make this type of crime more attractive.
UK Finance says people shouldn’t worry. “You are completely protected from fraud, so you get all your money back and never let it out of your pocket,” it says. “If you see any suspicious activity on your account, contact your bank immediately.” It’s not clear what proportion of the cases are being contested by banks, although the Financial Ombudsman Service, which settles disagreements between consumers and businesses providing financial services, doesn’t receive many complaints about contactless cards.
The FCA said earlier this year: “Contactless payments remain relatively secure compared to other payment methods” – and that there has been no significant increase in fraudulent transactions in other countries where the contactless limit was equivalent to £ 100 or more.
These include Canada, Singapore and Australia, which have increased their individual limits to 250 Canadian dollars (£ 146), 200 Singapore dollars (£ 108) and 200 Australian dollars (107), respectively.
Google Pay and Apple Pay: no limit on phone payments
Google Pay and Apple Pay users have already reached larger shoppers than those who rely on contactless cards for their spending.
This is not the case everywhere – while there is no limit to transactions, some merchants have opted for a cap on card payments. Others, however, allow larger expenses.
Apple Pay and Google Pay support most UK bank cards – you add your credit or debit card details to the appropriate app on your phone and then confirm with your bank, usually via a text message code or a phone call.
You can then pay with your phone wherever the contactless symbol is displayed, even abroad and on public transport.
Google Pay and Apple Pay are different in how you use them in a store. By default, Google Pay behaves like a contactless credit card on an Android: just keep your phone screen on and tap the reader to pay for goods or public transport up to the UK contactless limit. You need to unlock your phone to pay over the limit. For more security, you can set it so that all Google Pay transactions must be authenticated in this way.
Paying with an iPhone is a little more complicated. Apple Pay requires you to open the Wallet app by pressing the power button twice and then authenticate the payment with Face or Touch ID before touching your phone with the card device or reader. To speed up paying with public transport, you can set up a credit card for “Express Travel” on TfL, First or Arriva buses.
For authenticated payments above the contactless limit in Great Britain with both services, the shop must support them. The few retailers that do this include Aldi, Ikea, Waitrose, and Marks & Spencer.
Both services give merchants virtual account numbers when paying, which means that your real card details remain secure. Payments will also not be allowed if your phone has been completely switched off and not unlocked. If you need a PIN, face, or fingerprint before paying, they’re more secure than a contactless credit card. Remotely locking your phone if you lose it using the device location services offered by Apple and Google will block contactless payments.
Other mobile payment competitors include Samsung Pay, Garmin Pay and Fitbit Pay, which are available on their respective devices, but the UK banks’ support for them is much more limited.