As consumers look to limit physical contact during lockdown, contactless payments have had their limit increased to £45, with cashless expected to increase at an even faster rate during 2020 and beyond.
Emergency new changes have seen the contactless limit jump to £45 this week, as part of measures to reduce cash exchanges during the current pandemic.
Trade association UK Finance said the decision to raise the limit was made following talks with the retail sector, with an increased limit already being considered but now accelerated as part of the industry’s response to Covid-19. The changes will ensure more payments can be made without the need to handle cash, as well as reducing the number of occasions when people need to input their Pin on a machine when making payments. However, consumers may not be able to make £45 contactless card payments straight away – as it could take weeks for retailers to action the changes. The software on card payment machines will be updated to accept the new £45 limit but as there are hundreds of thousands of terminals across the UK, the updating process will happen gradually. The British Retail Consortium (BRC) confirmed that while the new contactless limit will be operational at some stores across the UK from April 1, it may be some time before it can be applied more widely.
More than £80.5bn was spent using contactless payments in 2019, UK Finance figures show, up by 16 percent on the previous year. With Covid-19 drastically changing the way consumers behave, that number is expected to increase by even more in 2020. However, cashless payments are not ideal for everyone.
Linda Ellett, UK head of consumer markets at KPMG, said: “Even prior to the crisis, consumers have been adopting new technologies like contactless, changing the consumer landscape at large.
“But in the same way we are focusing on the vulnerable in society in other ways, there are also those who aren’t perhaps as adaptive to these new technologies and need to be front of mind.
“The Government’s decision to further restrict social interaction will also no doubt lead to more consumers turning online, another area where some will be less comfortable and at risk.
“We therefore encourage business and Government to combine these positive changes with helpful advice to educate and protect shoppers.”
After the lockdown is over, the increased usage of cashless payments won’t be ideal for operators without cashless systems either. Due to the government’s prohibition on card payments, many still rely on cash and coins as their sole payment method – a method more consumers will have left behind in a post-Covid-19 world.