It’s just a month away
Less than half of banks and building societies examined by a star ratings website currently permit customers to determine their own contactless card limit. Defaqto conducted the analysis before rule changes come into force from March 19, which will enable firms to set higher contactless card limits than the existing £100 per transaction ceiling, should they wish to.
Firms are also being urged to allow customers to set their own limit, or disable contactless entirely, as many high street banks already do. The analysis by Defaqto of high street and online-only banks’ apps revealed significant variations in the money management features that account providers currently offer to customers.
The research discovered that only 13 of the 31 (42%) banks and building societies it examined allow customers to set their own contactless card limit, although 21 (68%) did permit users to freeze contactless payments.
Katie Brain, banking expert at Defaqto, said: “With the contactless cap being removed, choosing a bank or building society with the right in-app controls could make a real difference to how easily people manage their money. Features like setting your own contactless limit or freezing payments give customers a practical way to put the brakes on spending if they need to.”
The alterations to the contactless rule are being implemented by the Financial Conduct Authority (FCA), and existing safeguards will continue, ensuring customers are refunded in cases of unauthorised fraud, such as if their card is lost or stolen.
UK Finance, the banking and finance industry body, stated in December that while it doesn’t foresee any immediate change to the £100 contactless limit, “any changes made in the future will be done carefully and ensure strong security and fraud controls remain in place”.
The FCA has also previously indicated that, based on feedback from the industry, it expects most firms to maintain the £100 limit for now. The objective of these changes is to enable firms to better adapt to evolving consumer demands, inflation, and new technology in the future. Defaqto conducted its analysis in February.
Defaqto’s tips for maintaining control of payments
Monitor upcoming payments: Twelve of the apps reviewed by Defaqto allow users to view forthcoming direct debits and standing orders up to a selected date, aiding them in understanding how much money they will have remaining.
Classify spending: Numerous apps organise expenditure into categories, and some even permit users to create their own. This simplifies the process of identifying where money is being spent and where cutbacks could be made.
Think about setting a personal contactless limit: If this is a feature available, it can serve as a spending brake, necessitating a pin for larger purchases and promoting more thoughtful decisions.
Activate alerts: Balance and transaction notifications can assist in keeping individuals informed of money flowing into and out of their account, potentially helping to avoid the risk of overspending.
Consider restricting certain types of expenditure: Some providers permit customers to block particular transactions, such as gambling payments, through the app, over the phone or in-branch.
