Anyone who uses a debit card or credit card to pay day to day – which is most Brits at this point – has been issued a warning over a rule change set to come into force from Thursday.
This Thursday, March 19, the £100 limit on credit and debit cards has been axed which means you could pay for items or shopping costing much more than £100 with a simple wave of your card near a contactless checkout.
From Thursday, banks will be able to set their own contactless card limits for customers beyond £100.
While the added convenience will make it even easier to pick up items in store, especially as inflation pushes the price of a typical trolley of food well over £100 in supermarkets, experts are warning bank card holders to make sure that they don’t sacrifice security in the name of convenience.
Nicola Morgan, financial services expert at Confused.com, says: “For many consumers, contactless is already the easiest way to pay, as it allows you to make quick purchases without entering a PIN. From this Thursday, the nationwide £100 cap will be removed, meaning banks will be able to set their own contactless limits and in some cases allow customers to choose a limit that suits them. The Financial Conduct Authority (FCA) still expects banks to have security measures in place, such as fraud monitoring and occasional PIN checks for larger purchases, to help keep customers safe.”
But she warned that credit and debit card users still need to make sure they don’t fall foul of security problems when the limit is changed.
Set a personal limit: If your bank allows it, choose a contactless limit that reflects your usual spending, so you’re not taking on more risk than you’re comfortable with.
Use mobile wallets where possible: Paying with your phone often includes fingerprint or face recognition, which adds an extra layer of security for larger purchases.
Turn off contactless if you don’t need it: Many banking apps allow you to switch contactless payments off at any time.
Keep an eye on your account: Regularly checking your transactions can help you quickly spot anything unusual.
Nicola added: “Taking small steps like these, along with keeping your wallet and cards safe and being mindful of where you store your belongings, can help you stay in control of your money and feel confident as payment rules change.”
Fewer than half of banks and building societies analysed by a star ratings website currently allow people to set their own contactless card limit.
Defaqto carried out the analysis ahead of rule changes taking effect from March 19, which will allow firms to set higher contactless card limits than the current ceiling of £100 per transaction, if they choose to.
Firms are also being encouraged to let customers set their own limit, or turn contactless off altogether, as many high street banks already do.
The analysis by Defaqto of high street and online-only banks’ apps found significant differences in the money management features that account providers currently offer to customers.
The research found that only 13 of the 31 (42%) banks and building societies it looked at allow customers to set their own contactless card limit, however 21 (68%) did let users freeze contactless payments.
Katie Brain, banking expert at Defaqto, said: “With the contactless cap being removed, choosing a bank or building society with the right in-app controls could make a real difference to how easily people manage their money.
“Features like setting your own contactless limit or freezing payments give customers a practical way to put the brakes on spending if they need to.”
