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Could proposed contactless limit increase lead to a rise in fraud?

The Financial Conduct Authority (FCA) has announced it may increase the current contactless payment limit to more than double its current level. Up until the global Covid-19 outbreak, there was a £30 limit per transaction on contactless payments made by card, increasing to £45 in early 2020. Officials are now considering yet another increase to £100.

Reno Charlton
· 3 min read

The Financial Conduct Authority (FCA) has announced it may increase the current contactless payment limit to more than double its current level. Up until the global Covid-19 outbreak, there was a £30 limit per transaction on contactless payments made by card, increasing to £45 in early 2020. Officials are now considering yet another increase to £100.

While contactless card payments have provided increased convenience for many people, they have also made life easier for fraudsters. To complete a contactless transaction, all the user has to do is tap the card on the machine. The fact that no PIN or other details are required means that fraudsters can easily make transactions if they steal or find someone's contactless card.

In the past, those using stolen or found cards for contactless transactions were limited to just £30, or, more recently, £45. However, an increase to £100 per single transaction could lead to more significant financial losses for the victims of this type of card fraud. Fraudsters have found it easy to commit theft by using contactless technology, and contactless card fraud has been on the rise over recent years.

Accelerating towards a cashless economy and society

In recent years, cash use in the UK has gradually declined, and significantly so since the start of the pandemic. Over the past year, many businesses such as retailers and eateries have stopped accepting cash. More and more consumers have had to make payments with cards instead.

Many people are worried about the UK becoming a cashless society, particularly older people and those on low incomes who rely more on cash. An increase in the per-transaction contactless limit could further accelerate the UK's journey toward becoming a cashless society. People can obviously complete far bigger transactions with a £100 rather than £30 limit. 

This move could mean that more retailers ask for payments to be made by card rather than cash. It could also encourage more people to use contactless technology rather than cash because of the higher limit.

Potential upsides of the limit increase

While the increase in the contactless limit may cause worry for some, there are also potential advantages to consider.

In the current climate with Covid-19 still wreaking havoc across the nation, many people are more comfortable using plastic than cash. The limit increase means that they will be able to do this with greater ease, as they can make higher-value transactions of up to £100.

In addition, it could benefit older people who struggle to remember their PIN. People often write their PIN down and carry it with them, which leaves them more open to fraud and potentially unprotected if they try to claim for fraudulent transactions. With an increase in the contactless limit, card users will find it easier to make purchases even if they cannot remember their PIN.

FCA to consult on the changes

No decision has yet been confirmed regarding the proposed contactless limit increase. However, the FCA has stated it will be consulting on the limit change ‘shortly’. In a statement, the FCA also said, "It is important that payments regulation keeps pace with consumer and merchant expectations." 

It is also worth noting that although the FCA can change the boundaries for contactless limits, it is individual card issuers that will decide what limit to offer within those boundaries.

Reno Charlton

Reno Charlton

Reno Charlton has been writing since 2003. She has worked with a diverse client base around the world, across a variety of subjects and industry areas, specialising in lifestyle and health & wellbeing niches. In addition to her online work, Reno is also a published author and has written several children's books and short stories.
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