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£100 contactless limit: What are digital banks doing?

In the past two years, the UK contactless limit has increased twice, first in April 2020 from £30 to £45 and now up to £100.

a person holding a card

Starling Bank and Lensi Photography.

Today the UK’s contactless payment limit is rising to £100 per transaction.

Back in his budget in March 2021, Chancellor of the Exchequer Rishi Sunak announced plans to more than double the current limit—nearly a year after the limit was last raised from £30 to £45 at the start of the pandemic.

While many UK banks will be ready for the change, some merchants may be slower on the uptick, meaning that the new contactless limit might not be available everywhere right away.

Now, nearly 90 per cent of all transactions are made using the touch-free payment method and, following the initial limit increase, the average value of contactless payments jumped by nearly a third, from £9.60 in 2019 to £12.38 in 2020—not exactly high enough to warrant a £100 limit.

From today, most banks are putting the onus on their customers to set their own contactless cap, with the likes of Lloyds, Halifax and Bank of Scotland allowing customers to choose a limit between £30 and £95 in their banking apps.

As of now, Starling Bank’s customers will be able to use an innovative slider in their app to set their own limit. 

Customers will be able to set their own limits from £100 down to zero, in increments of £10, with all customers able to use the full £100 from today.

“The benefit of being a digital bank is the ability to listen to customers and implement wanted changes quickly,” Starling CEO and founder Anne Boden said.

Once a customer has spent £300 by using contactless, they will then be prompted to enter their PIN. Previously this cap was £225.

“Analysing our spending data, we can see that there appears to be little demand for the increased contactless limit and that many would like to retain the same contactless limit or even reduce it,” added Boden.

AltFi understands that fellow digital bank Monzo will also be implementing the new £100 limit.

From today, Monzo users will be able to spend £100 in a single tap transaction and will be asked to enter their PIN once they have spent £200 (up from £100 previously).

But as it stands, Monzo’s customers are not able to set their own limit in the app.

AltFi reached out to Revolut for comment but it had not provided one at the time of publication.

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