8 September 2015 15:30
Spending limit rises as contactless takes off
More than £2.5 billion was spent using contactless cards in the first half of 2015 and this week the upper limit for contactless payments was increased to £30.
The new £30 payment limit is being introduced in recognition of the popularity of contactless spending, as the number of contactless cards in circulation rises.
Payment terminals are being updated to accept the new limit over the coming weeks. It means that the average spend in shops, including supermarkets, pubs, gift shops and dry cleaners, now falls within the limit.
Contactless spending has risen from £287 million per month in January 2015 to £567 million in June 2015, according to data from the UK Cards Association, the trade body for the cards payment industry.
In total, £2.5 billion was spent on contactless cards and devices in the first half of 2015, compared to £2.32 billion for the whole of 2014. There are now more than 69 million contactless cards in circulation.
Graham Peacop, CEO of The UK Cards Association, said:
"The growth in contactless payments shows people want to use contactless cards and increasing the limit gives customers even more opportunities to pay in this way."
Contactless cards use the same industry-standard secure encryption technology as Chip and PIN and fraud on contactless cards currently stands at one penny for every pound spent. As an added safeguard, consumers are sometimes asked to enter their PIN.
"Contactless is becoming the new normal," said Kevin Jenkins, managing director UK & Ireland at Visa Europe. "Today's threshold increase to £30 gives consumers all the benefits of contactless across a broader range of their daily activities. We expect to see this momentum continue to build as more people adopt mobile and wearable payment technology."
SMEs have to keep pace with these changes, said Jason Richelson, CEO of ShopKeep.
"This should be viewed as an opportunity for small businesses, not a hinderance. It's crucial that small business owners have a strategy in place that will allow them to effectively adapt to this change in spending habits. Contactless is here to stay."