The £100 cap is being scrapped this week
From March 19th, the £100 limit for single contactless card transactions will be scrapped. The change is meant to provide people with more flexibility and control but money experts have warned customers may be facing fraud and debt risks in return.
This limit is what prevents people from being able to use contactless transaction methods on their physical bank cards for sums over £100. This has applied to most debit and credit cards but has not usually affected other contactless payment forms such as Apple Pay or Samsung Pay.
Under the new rules, banks will be able to set contactless limits for their customers and some customers may even be able to choose their own personal limits or turn off contactless payments altogether. The Financial Conduct Authority is changing the rule to provide customers with more convenience, flexibility and control, however there may be a cost to pay.
Debt experts at Money Wellness have warned that without a limit, certain shoppers may be more vulnerable to overspending and debt. They warn others may face confusing rules or updates in the future and a growing concern about fraud risk surfaces.
The experts explained: “The idea of giving consumers more flexibility when it comes to contactless payments makes sense. But there’s always a risk that it could also make spending feel a little bit too easy.
“The existing £100 cap sounds will sound like a natural spending barrier to many, and a number we’re psychologically conditioned to not go over.
“Simply knowing this limit is there can make you stop to think if you’re about to make a larger purchase or throwing items in the supermarket trolley without thinking about the total cost. But if limits go up significantly, it could become much easier to spend larger amounts without really noticing.”
Some customers have also raised concerns about the risk of fraud in this rule change. With the £100 limit, fraudsters with stolen cards may be prevented from spending above the limit as they may not know the pin for the cards.
However, the FCA has assured tha removing the limit will not change fraud controls and protections. In fact, it has reported that the change could allow banks to strengthen their fraud prevention measures.
The protections around fraudulent or unauthorised payments will be staying the same so if your card is lost or stolen and used without your permission you’ll be reimbursed as normal. The experts added: “The message is that while contactless limits may change, the basic protections around card fraud should and will stay the same – or get better.”
One final concern the experts have is the level of confusion this has brought in each bank may react differently. It’s expected that most will keep the £100 cap for the time being but if the limit does change, customers may suddenly see different rules being applied to them depending on who they bank with.
The experts urged anyone using contactless payments to review their contactless payment settings and “choose whatever works best for you”. They added: “If the changes feel confusing or stressful, then don’t worry. Banks are expected to explain any updates clearly.”
