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Home > Business > Cash ‘on the way out’ as contactless payment limit increases to £45

Cash ‘on the way out’ as contactless payment limit increases to £45

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Article: Daily Star – Sophie Foster 31 MAR 2020

The Covid-19 outbreak means that British spending habits are quickly accelerating away from cash payments. The payment limit increase will mean shoppers can spend up to £45 per transaction

The contactless card payment limit will change from Wednesday April 1.

Shoppers will be able to spend a maximum of £45 per transaction, up from £30, in an effort to curb cash or pin payments.

The £15 payment limit increase has been made in reaction to the coronavirus outbreak.

Coronavirus can reportedly survive on plastic, such as notes and pin pads, for 72 hours.

As such, contactless payment is the method least likely to promote the spread of Covid-19.

The contactless payment limit has previously been kept low in order to prevent fraud.

Paying with a contactless card requires no security tests, or confirmation of identity, and so lost or stolen cards are less protected.

In 2007, the limit was just £10.

This was increased to £15 in 2010, £20 in 2012 and to £30 in 2015.

The slow increase shows that Britain has been gradually changing its shopping habits.

As a country, we’ve moved from a cash-carrying culture into one which commonly uses contactless and smartphone payments.

The increase to £45 puts the new limit at three times the original “tap and go” amount.

Trade association UK Finance, which represents the finance and payments industry, said the decision was made following talks with the retail sector.

As people try to pay for weekly lockdown food shops, using the safer contactless method, it is believed that £30 is too low for many families.

A similar increase has been made in areas of mainland Europe.

The increase was reportedly already being considered due to the changing spending habits of the nation.

The outbreak of the killer virus merely accelerated the change.

Cash payments have seen a sharp decline in the years leading up to 2020.

Since 2008, cash payments have dropped from over 20 billion cash per annum to just 11 billion in 2018.

Between 2017 and 2018 there was a decline in cash payments of a whopping 16%.

While we’ve long known that debit cards and online payments are overtaking cash as a payment method, the new contactless limit could mean a dramatic shift in attitudes.

Touch-less payments are more hygienic and now, thanks to coronavirus, may become the main payment method in the UK this year.

So, will cash payments die out?

Well, certainly not any time soon, but according to research by the BBC, over 80% of 25-34 year olds used contactless in 2018.

In comparison, only 60% of over 65’s did.

In 2018, The Sun found that one in five Brits never carry cash.

They also found that 50% of Brits believe that cash is “on the way out”.

In 2019, £80.5billion was spent using contactless, UK Finance figures show, up by 16% on the previous year.

So it seems that the era of cash may be coming to an end.

In order to implement the contactless limit change, payment machines will have their software updated.

With tech being tricky, and hundreds of thousands of machines needing the update, the new limit may be a gradual shift.

While the updates will begin on April 1 it’s worth checking with the store if their machines have been modified before payment.

The British Retail Consortium (BRC) head of payments policy Andrew Cregan said: “Some shops will take longer to make the necessary changes, given the strain they’re under.”

Original Article: Daily Star

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