£100 contactless payments have arrived. Is the limit increase safe for customers and better for your business?

October 25, 2021

Contactless spending limits increased very recently on the 15 October. With the new higher limit, customers can spend £100 without a PIN, more than double the old limit of £45.

The Financial Conduct Authority (FCA) also confirmed that customers would be able to spend up to £300 on multiple transactions before they would be asked to verify themselves with a PIN.

This increase reflects changes in consumer spending, which saw contactless spending increase by 37.8% for 2021, when compared to 2020.

What does this mean for businesses and customers? Vincent Choi, Pomelo Pay CEO, says:

“We are delighted that the Chancellor Rishi Sunak has decided to increase contactless payment limits to £100.

This should be seen as a win-win since this decisive move supports businesses which have quickly embraced technological solutions to survive and thrive during the pandemic, while also helping consumers stay safe by limiting the number of transactions they have to manually enter their PIN for.”

Many of the biggest card companies like Visa and Mastercard support the new increase. Yet a handful of banks and fintech companies are wary of the change, citing concerns about security. However, the benefits more than outweigh any possible drawbacks.

Why is the limit increasing?

This isn’t the first time the contactless limit has increased. Contactless technology first allowed purchases up to £30, but this quickly moved to £45 at the start of the coronavirus pandemic last year.

Although lockdown is over, many customers converted to contactless. As of 2021, contactless payments now account for more than a quarter of all UK payments, with 83% of people making use of this feature.

For customers, contactless payments significantly reduce waiting times in queues. They are easy to use and also eliminate the need for any physical touching between devices.

Customers have shown a clear preference for contactless payments. To keep customers spending and the economy afloat, it is important that any friction is reduced.

Is the increase safe for customers?

For customers and banks, there is always the fear that higher contactless limits without authorisation allow thieves and fraudsters to steal even more money.

Ricky Lee, sync chief executive, says:

“I expect that payment card fraud will go up as a result of the higher contactless limit and there will be a knock-on impact for consumers at some point in the near future.”

Although it would seem logical that fraudulent transactions will increase, the percentage of unauthorised transactions actually decreased from 2.7p per £100 (2018) to 2p per £100 (2020).

This is despite the fact that contactless card payments went from £30 to £45 in this period.

This suggests that even if there is any rise in fraudulent transactions, the cumulative effect of increased consumer spending will offset this.

Some customers may be worried that with a stolen card, the thief will be able to illegally spend a higher amount. However, it is the banks that will refund any transactions that aren’t authorised.

In any case, for customers that are anxious about the increased limit, some banks will allow them to fix their own contactless threshold. Certain bank accounts will also issue non-contactless cards if the cardholder wants one.

Is the new increase good for retailers?

Yes, the new limits will provide businesses with even more benefits.

Reduced waiting times

The vast majority of customers are comfortable using contactless cards. The increased limits will speed up checkout transactions even further.

The extra thirty seconds it takes to input a PIN number may not be much, but multiplied by thousands and there are significant cost savings to be made on the high street.

Your business will benefit from quicker transactions and faster processing. So you can sell even more goods and services during your opening hours.

Less contact

It looks like coronavirus will be with us for the next year at least. The government is still recommending that people should continue to socially distance in shops.

By allowing more transactions to be completed without contact, the risk of transmission is minimised. Less people will be touching terminals and they will need less regular cleaning as a result.

A better checkout experience

It could be argued that the contactless limit should have been introduced a long time ago, considering the ease with which people can pay by Google Pay, Apple Pay or other alternative banking apps.

With these apps, customers can already make unlimited contactless purchases from their smartphones. It is important that credit card and debit card payments keep up with the contactless functionality of competing payment methods.

More and more people are using contactless card payments and this will continue to increase. Keeping more of these customers satisfied can only be achieved through higher spending limits.

What measures should businesses implement?

You can implement a number of measures to protect both your business and the customer. This will help to reduce any incidents and provide your customers with extra peace of mind during the transition.

Confirm transactions

Completing a contactless transaction can take seconds. It is inevitable that some customers will miss transaction totals.

Staff that manage checkouts and card readers should be trained to always confirm final costs with the customer. This will minimise incidents and reduce chargebacks.

Provide receipts

Most customers won’t ask for a receipt for a card transaction that costs £4, and they probably won’t raise it with their banks if they can’t remember the purchase, when examining their current accounts.

However, customers will dispute £100 transactions if they can’t remember them. So staff should be trained to give customers paper or digital receipts with high-value purchases. This will minimise the potential for future disputes.


In a Forbes poll, 35% of respondents said they felt the new contactless card limit was too high. Clearly, a significant portion of customers are nervous about the new limit, but these fears are unfounded.

The FCA found that “No material increase in fraudulent transactions has been observed in other countries where the contactless limit increased to the equivalent of £100 or above. The card industry in Singapore, Australia and Canada have increased their single limits to SD200 (£110), AUD200 (£112), and CAD250 (£143) respectively. These jurisdictions do not operate cumulative limits.”

The new transaction limit will encourage spending, speed up purchases and streamline business operations. It is a welcome change that brings card spending up to speed with the most popular alternative and mobile phone payment methods.

If you would like to speed up your checkout, contact us at Pomelo Pay to find out what our solutions can do for your business.