Red card for contactless
Paul Lewis on how to protect yourself if contactless card payment limits are dropped
The £100 limit on contactless payments with a debit or credit card is set to disappear early next year. The limit was raised to £100 in 2021 from the temporary £45 ceiling set during Covid. Now, the Financial Conduct Authority (FCA) has produced a consultation paper on removing the limit altogether. That is despite more than three-quarters of customers who responded to an opinion poll and paper in March saying the £100 limit should be kept. Only one in five of the financial businesses that responded were in favour of removing the limit.
However, the change is part of the FCA’s commitment to remove what it has called unnecessary regulation from the financial services industry, which the Government believes will boost spending and help the economy. Those considerations seem to have trumped the concerns of the public and the financial services industry itself.
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One of those worries, of course, is fraud. But the FCA has stated clearly that the banks must reimburse in full any losses if a card is lost or stolen and used by someone else to make purchases. In addition, it is expected that people will still be asked for their PIN from time to time, especially if they are making a high-value purchase. Some banks may let customers set their own limit.
Removing the contactless limit would bring cards into line with contactless payments using a wallet on a mobile device. But banking on your phone does carry its own dangers. If you use your phone in a public place remember that an unlocked phone is very valuable to thieves, who can then reset the security so they can get access. In some cases they can even defeat or remove face or fingerprint recognition.
If you keep a banking app on your phone you should set a different PIN from the one that opens your phone. And if you have more than one bank account on your mobile make sure each has a different PIN that would be impossible to guess. If you do use your phone in public try to position yourself so a casual thief on a bike or scooter cannot snatch it.
The consultation finished on 15 October but the FCA will not say when any change might be announced or start.