With the spending limit set to jump to £100, I’ve taken a look at the pros and cons of tap and pay.
I’ve been using contactless since it launched in 2007. It’s so easy that I rarely use cash or Chip and PIN at all. Tap for this, tap for that…
And with the pandemic I think we are all grateful that we don’t have to use the keypad for every card transaction.
I’m not alone. We’ve all been using contactless in the UK so long now that it’s second nature.
Each year more and more transactions are made with a simple tap, particularly with debit cards where 64% are contactless. It’s slightly lower for credit cards (46%) – probably because we’re likely to spend more money on these cards, which may have been beyond the £45 limit.
But that’s all set to change, with the limit now jumping up to £100 from 15 October 2021 (though since card terminals need to be updated it might be later for some retailers).
It’s a big increase. Only 18 months ago the limit was still £30. While some people are worried it’s too high a limit, others are looking forward to paying more this way.
So is it a good or bad move by the Government? Here’s my take on everything from security to convenience.
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Are contactless cards safe?
One big fear with contactless is that it’s easy for someone to steal your card and spend your money. That’s totally true, and though it doesn’t actually happen much, I’d imagine the £100 limit will make card theft more appealing to crooks knowing they can buy more expensive items.
The other worry is that people could scan your card without you realising but holding a reader against your wallet. This sounds scary but in reality it’s far more complicated and there’s apparently no evidence this happens.
But even with these risks, there are protections. First up, card rules state that you have to enter your PIN after five contactless transactions or when you spend a total of £300 across multiple contactless purchases.
(If this happens to you it might appear that your card has been rejected – just try again but this time insert your card rather than tap it and enter your PIN. Here’s more on how this works.).
So the most a crook could spend is £300, and probably less depending on when you last had to enter your PIN.
And if this does happen, then you will get your money back. So you won’t lose out financially, though it will obviously inconvenience you.
Limiting contactless fraud
You can also limit any losses with most banks by enabling a couple of features in the app. One is to get instant notifications each time the card is used. If one pops up on your phone and it wasn’t you, then you know to take action.
And that action can be as simple as freezing your card. Most banks offer this feature now, and it’ll stop whoever has your card spending any more money.
It’s also far better than cancelling your card if you think it’s lost but there haven’t been signs of fraud. If it later turns up you can unfreeze it and keep using it.
You could also consider a RFID wallet. This has aluminium lining which essentially stops anyone scanning your cards. Personally I’ve not bothered with this as the risk is so low.
Changing your contactless limit
A handful of banks are adding in the feature to set your own personal contactless limit. I don’t really think this is necessary based on the other measures outlined above, but if you feel happier this way then it’s worth a look.
The banks doing this are:
|Bank||Personal contactless limit|
|Bank of Scotland||Increments of £5 between £30 and £100|
|Halifax||Increments of £5 between £30 and £100|
|Lloyds||Increments of £5 between £30 and £100|
|Monzo||Increments of £5 from £0 to £100 AND total spend when PIN required|
|Starling||Increments of £10 between £10 and £100|
Other banks might add this feature later. Alternatively some apps let you turn off contactless completely, or you might be able to ask your bank for a debit or credit card which doesn’t have contactless. Again, I think this isn’t going to be necessary for most people.
Making it easier to spend
The convenience of contactless is just how easy and fast it is to spend. The new £100 limit will mean even more purchases are eligible for contactless. For me it means I’ll be able to tap the majority of the time – it’s very rare I buy anything in a shop that costs more.
But that has a flip side too. Other payment methods, cash in particular but Chip & PIN too, introduce levels of friction to every transaction.
When you hand over notes and coins or look at the total on a PIN keypad, you are much more aware of what you are spending. And this registers, even subconsciously. You are more likely to adjust future spending and have a more accurate idea of how much is in your account.
A few years ago on holiday in America I was shocked they still asked me to sign for card payments – but it really made me think about my total spending.
But with contactless it’s so easy to just tap and not even look at the total. And that will happen more often with the £100 limit.
Though it removes some of the convenience, you can reduce the impact this has by asking for receipts. This also has the added advantage of ensuring you haven’t been overcharged.
And going back to banking apps, checking transactions on there as they go through should help register that you have parted with cash, as well as seeing the impact on your total balance.
It’s also possible that some banks might add in the facility for you to set your own lower contactless limit – a good idea if you’re worried you’ll spend more than you should.
Limits are even higher on smart devices
Of course, contactless isn’t just something on cards. You can also use the same technology to pay with mobile devices via Apple Pay, Google Pay and Samsung Pay.
And the £100 limit doesn’t count with these. In fact the only limits are if a retailer wants to have their own in place. A friend told me he used an iPhone to pay for another iPhone!
The reason you can spend more is that these cards have secondary security measures – things like your thumb print or facial recognition.
And it’s possible we could see that technology come to cards too. A few years ago Natwest trialed biometric debit cards – though we’re yet to see them roll out to customers.