Contactless concerns- Don’t get ‘tap happy’ with your contactless card

From 15th October, shoppers will be able to make a purchase in store for up to £100, with their contactless credit or debit card, without using their PIN. The change comes in following a public consultation and after discussions between the Treasury and the Financial Conduct Authority (FCA). The limit has increased three-fold in 18 months, after it rose from £30 to £45 in April 2020.

Sarah Pennells, Consumer Finance Specialist at Royal London, said:

“The increase in the contactless spending limit will make it quicker and easier to pay for bigger purchases at the tills. But this may not be a good thing for everyone.

“The higher limit could encourage people to become ‘tap-happy’ and spend more than they can afford, and it can be harder to keep track of what you’re spending if you don’t get a receipt every time.  If you are worried about this, turn on notifications if you use a banking app, so you’ll be alerted every time you use your card. If you don’t bank online, make sure your monthly essentials are covered and check out limits for your spending.

“Although fraud on contactless cards is relatively low level, it can be distressing to those who experience it. You should treat your contactless card the same way as you’d treat cash in your pocket, so be careful when you use it and don’t give it to anyone else.”

Sarah’s tips:

Track your spending
Being able to tap and pay for purchases up to £100 may make it easier for money to slip through your fingers. In many banking apps, you can turn on notifications so you’ll be alerted when you make a payment. It’s a good way of checking that you haven’t accidentally paid too much and keeping track of what you spend. You can also use budgeting apps that help you see what you are spending on different categories each month, such as eating out/takeaways, travel and household bills.

Set limits on your card
Not all banks insist that customers have a £100 contactless card limit. Lloyds, Halifax, Bank of Scotland and Starling will let customers set their own contactless limits on their card.  Some other banks have said they are considering introducing this.

Keep an eye out for any transactions you don’t recognise
It’s important to check your transactions online or through your app regularly.  If you notice any transactions you don’t recognise, contact your bank immediately. According to UK Finance, contactless fraud on payment cards and devices represents just 2.9% of overall card fraud losses, and you are fully protected against fraud, so you should get all of your money back.

Ask for a Chip and PIN
If you would prefer not to have the contactless facility on your card, most banks will replace it with a contactless free card or turn off the facility on your card. This can usually be done in branch or over the phone if not using your mobile app. You can also pay with your phone if you prefer to have an additional layer of security such as face ID or fingerprint recognition.

Don’t give your card to someone else
As part of the new £100 limit, banks won’t ask for your PIN until you’ve spent £300. So anyone who uses your card could spend up to £300 before a PIN is needed. It can be easy to let someone borrow your card or hand it over to a friend to pay for a round of drinks Keep your eyes on your card and if you misplace it, you can usually freeze it in your app until you find it or report it as lost or stolen.