The Treasury and Financial Conduct Authority (FCA) raised the no-contact limit from £45 to £100 on October 15, but Money Mail soon found that retailers were reluctant to adopt it.
The limit determines the amount that can be spent on a contactless bank card – debit or credit – without having to verify your identity by entering a PIN.
In April last year it was increased from £30 to £45 as an anti-Covid measure to reduce contact between shoppers and payment terminals.
Rejected: When reporter Amelia Murray (pictured) went to experience her new-found buying power on London’s Oxford Street, she was met with astonishment and skepticism
The card can now be used to make five contactless payments in a row before the spender is required to enter a PIN – or up to £300.
But retailers revolted against the offering, fearing fraud and that shoppers could leave with their merchandise without realizing the transaction had not been processed.
The Post Office says it has no plans to allow contactless transactions of £100. Some national retail chains are also refusing to update their systems at the moment due to a lack of customer demand, according to the British Retail Consortium (BRC).
The trade body says there are also concerns about “contactless shutdowns” that could cost stores millions.
This happens if contactless payment is blocked and a PIN is requested, but the customer did not realize this and left the shop without paying. This is a particular concern for stores that have self-service checkouts.
At the £45 cap, this problem cost retailers around £33 million a year. There are fears that losses could grow exponentially now.
Other retailers are gradually working towards the £100 cap as they update their systems. This could take months.
When I tried to spend a triple-figure amount with a tap on my debit card in London’s Oxford Street — Europe’s most popular shopping district — I was met with odd looks or promises that the systems would be updated on Monday.
Stumped: When I asked Amelia about Boots’ new spending limit, the staff had no idea and said the only way to find out was to test it on a self-service machine
At John Lewis I was told downstairs the limit had gone up to £100 but on the second floor I had to enter my PIN to agree to pay £95.10 for a bathrobe, towel and pillow.
Many of the employees I spoke to had not yet heard of the change. The sales associate at H. Samuel told me I could only use contactless to pay up to £45, and the manager of the Apple Store on Regent Street mistakenly told me the maximum depended on my bank.
Friday was supposed to bring relief to shoppers and support the post-lockdown British economy. But did anyone get the memo?
When I asked at Boots, the staff had no idea. They said the only way to know if the limit had increased was to test it on a self-service machine.
At Clarks and House of Fraser, I was told the systems would be ready on Monday. A Sainsbury’s employee said she had heard rumors of changes but nothing had been updated yet.
The Tesco cashier looked at me as if I was setting it up when I told her I should be able to pay contactless for about £60 for a hair straightener and payment was refused. “He would have told us if this was happening,” she said.
The assistants at TK Maxx told me some contactless payments over £45 had gone through, but when I tapped my card on the machine to buy a £99.98 shirt and jacket, it asked for my PIN.
When I tried again a few days later, it seemed the stores weren’t ready anymore. At Boots, I was told it didn’t work that morning. Marks & Spencer and TK Maxx are not capped.
I began to wonder if the staff suspected I was trying to shop with a stolen bank card. This is a real concern for many.
The Financial Conduct Authority raised the no-contact limit from £45 to £100 from Friday, but Money Mail soon found retailers were reluctant to adopt it.
The danger of not connecting is that someone can steal your card and take a quick trip without verification.
If someone steals your card and makes a contactless payment, the money will be refunded – as long as you weren’t grossly negligent. If you find your card missing, report it to your bank at once.
The FCA says contactless card fraud has not increased after the spike to £45 last year, nor has it risen in countries where the limit is around £100.
A spokesperson says: ‘Companies must ensure they act to reduce the risk of unauthorized transactions and fraud and need tools to monitor fraudulent transactions. As the limit increases, we will continue to monitor the data closely.
There are also concerns that the £100 cap will encourage people to spend more than they should.
“Contactless payments are easy and frictionless,” says Myron Jobson, an interactive investor at the platform. The concern is that the new redundancy limit may encourage reckless spending, causing some customers to exceed their means.
And that could lead to debt problems at a time when many are feeling financially strapped by the pandemic and the high cost of living.
You can also ask your bank to limit your purchasing power.
Lloyds, Halifax and Bank of Scotland customers can set their calling limit to between £30 and £95 (in £5 increments) online or via their mobile app. They will also be able to turn the contactless function on and off as they wish. You can also change your limits at the branch or over the phone.
Nationwide customers can turn off the contactless feature of their card online, in branches or via the mobile app. Alternatively, they can order a contactless card. NatWest customers can turn off the contactless functionality using its app but cannot set new limits. HSBC says you can order a contactless card.
Nationwide applies the same rules to credit cards, while HSBC customers can call the number on the back of their card and request that the contactless function be turned off.
But Barclays, Lloyds and NatWest will only allow changes made to debit cards.
Tesco says it started introducing the new limit last Friday, and Sainsbury’s says it should be available in its 600 stores over the next few weeks. Marks & Spencer says it should be in place today, and Waitrose launched on Monday.
All 210 Young’s pubs will accept the £100 cap and B&Q says it will be available in all stores from October 28th. Boots will not be updated until January.
Payment apps on smartphones and smartwatches don’t have a spending limit, but do require security checks – which could be a PIN, fingerprint, or facial recognition technology.
The first contactless credit and debit cards were introduced in 2007 with a £10 limit. The minimum was gradually raised to £20 in 2012, and then to £30 in 2015.
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