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Take Control Over Contactless: The Banks Allowing You to Set Your Own Limit

Individuals in the UK will soon find themselves being able to spend up to £100 with the use of a contactless card, without the need to enter a PIN.

As of Friday 15th October, shoppers in the UK will be able to spend up to £100 per transaction through the use of contactless. The limit has been revised from its previous increase from £30 to £45, which came into force on the 1st April 2020; during the height of the global pandemic.

This move is being welcomed by all sides of the table, as the UK Government and HM Treasury – who finalised the decision – strongly believe that the increase will serve a major boost to the national economy.

More than 7.4 million people are living a cashless lifestyle in the UK, and the previous increase to the £45 limit contributed to the number of contactless payments made in the UK increasing by 12% to a total of 9.6 billion payments; according to UK Finance.

So how will this new increase be translated by the UK’s most prominent banking institutions?

  • HSBC
    At the time of writing, HSBC customers will not be able to set their own preference for a contactless spending limit. However, the bank has ensured their customers that they will retain full control over the use of their card through the HSBC digital banking app; with the ability to block transactions or report a stolen card for example.Despite the lack of user control in regards to the spending limit, the bank has also stated that as an alternative, customers will be able to request a contactless-free card should they so wish, whilst also reminding customers that they are fully protected against any unauthorised card fraud.
  • Nationwide
    The bank has stated that its customers will be able to utilise the new £100 limit from 15th October, and that they will enjoy the ability to turn off the contactless functionality of their card if it is their preference. In addition to this, Nationwide has also made it known that customers will be able to set a daily spending limit for their contactless payments, after which a PIN will be required to resume its functionality.Despite reports that Nationwide is planning to let their customers set their own contactless limit within the £100 window, no official launch date for this initiative has been announced.
  • Barclays
    Barclays is also set to embrace the new £100 limit, however customers will not be able to customise the limit to suit their own needs. In light of this, the bank has stated this its card services do benefit from a high level of user control.Customers will be able to set daily spending limits, which includes the use of contactless, whilst also being able to set regulations in regards to internet transactions and ATM withdrawals. Barclays has also stated that their contactless cards are covered by the same anti-fraud technology as its chip and PIN transactions.
  • TSB
    Customers of TBS will also see the contactless ability of their cards being extended to the £100 limit as of 15th October, but still, customers will not benefit from the option of being able to set the limit for themselves.As an added layer of security, TSB has mentioned that customers will be ‘prompted’ to enter their PIN for user-verification measures; whilst they can also switch to a non-contactless card should they prefer.
  • Santander
    As Santander has mentioned that their customers will be able to utilise the new £100 limit, the bank has also stated that they are developing technology that will allow customers to set the limit themselves; however any official launch date of this scheme is yet to be announced.Unfortunately however, currently only Santander Mastercard users will be able to halt the contactless functionality of their card through the digital banking app; although non-contactless card options will be made available upon request for both Santander Mastercard and Santander Visa users.
  • Lloyds Bank, Halifax, and Bank of Scotland
    Customers of Lloyds Bank, Halifax, and Bank of Scotland will perhaps enjoy the greatest level of control to their contactless payments in light of this new increase. The banks have reported that debit card customers will be able to activate and deactivate the contactless functionality of their cards, whilst also enjoying the ability to set their own contactless limit, between £30 and £95, in increments of £5.A similar scheme is set to be launched by the banks in the coming weeks that is set to serve credit card customers; including accounts with the bank MBNA.
  • NatWest and RBS
    Although NatWest and RBS banking customers will not be able to enjoy variation from the new £100 limit, the banks have stated that the contactless functionality of their cards will be able to be restricted and controlled through the use of their digital banking app. No non-contactless card options are currently available.In regards to security, customers will be required to enter their PIN once the total spending limit for contactless transactions has been met; however, the banks have not disclosed the exact figure at which this process would take place.
  • Monzo
    The new £100 limit will also be made available to customers of challenger banks like Monzo. As a relatively new and contemporary entrant to the British banking landscape, it’s unusual that Monzo are reportedly not offering a non-contactless alternative to its card offerings.In light of this however, Monzo has cited its strong digital banking stance as a protective measure against fraudulent payments. Customers will be alerted instantly to any transactions being made through their account – including both chip and PIN, and contactless – and that customers will be required to enter a PIN once they reach the value of £100 across multiple contactless transactions.
  • Starling
    Unlike other competing challenger banks, Starling sparked optimism from their customers when they announced that new card controls will be introduced in conjunction with the introduction of the new £100 contactless limit.Starling customers will be able to set the contactless limit themselves through the bank’s mobile app. The limit can be set anywhere between £0 and £100, in increments of £10, and they will be able to shut the function off completely should they so wish.
Steffen Vollert, Co-Founder and CTO, Volt
Steffen Vollert, Co-Founder and CTO, Volt

Steffen Vollert, Co-Founder and CTO of Volt said: “With at least 135 million contactless cards in circulation and the technology accounting for 9.6 billion payments a year, there’s no doubt that the new contactless limit brings new opportunities for many. Consumers will benefit from greater flexibility and convenience; merchants could see an increase in sales and operational efficiencies; payment service providers might experience an uptick in transaction volumes.

“However, concerns that the increased limit will make it easier for fraudsters to steal larger sums of money from cardholders are valid, and should not be disregarded. During the first six months of this year alone, contactless fraud – covering cards and mobile phones – totalled £7.6 million, according to UK Finance.

“Certainly, steps are being taken in the right direction to combat card fraud. After 14 March 2022, issuers in the UK will have a legal obligation to implement SCA on card transactions under the FCA’s PSD2 requirements, for example. But this doesn’t solve the issue of contactless transactions, or card fraud itself. As a result, the increased limit could accelerate the growing demand for an equally fast, but more secure payment method, which can be realised via open banking. Direct account-to-account payments in real-time eliminate card fraud altogether, whilst providing a single-click checkout experience for the consumer and substantially reduced fees for the merchant. It will take time for open banking payments to become mainstream. But could the increased contactless limit be the catalyst for a transition away from card payments? Only time will tell.”

Altay Ural, Chief Product and Technology Officer, Modulr
Altay Ural, Chief Product and Technology Officer, Modulr

Altay Ural, the Chief Product and Technology Officer for the UK fintech Modulr added: “Raising the contactless limit to £100 is a good move. We need to make spending in stores as easy as possible to get the economy back on its feet. This starts with taking the friction out of paying that comes with lower limits (£45) and replacing it with convenience for customers.

“And no, we can’t ignore the very real threat of fraud. But the truth is, the risk of this type of fraud is fairly small and consumers are well protected. With secure, in-built technologies like virtual cards (on smartphones) to customer controls like card freezing, as well as customer compensation like chargebacks.

“There is a real opportunity here to promote greater consumer spending across UK stores, especially in busy locations like supermarkets, petrol stations and DIY stores where you can easily spend more than £45 in one go.”

Continue reading: Dojo: Increasing the Contactless Limit Follows Current Payment Trends

Author

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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