In September 2015, the contactless limit increased from £20 ($26) to £30. Since then contactless payment usage has grown rapidly.
Contactless payments have only continued to rise since launch. With access to alternative payment methods such as Apple Pay and Barclays’ bPay, consumers have more options to pay without chip and pin.
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Consumer demand for an increased contactless limit
The research certainly points to a desire for less chip-and-pin and more tap and go. UK Finance released its 2018 Payment Markets report that revealed the effect that contactless payments, online shopping and smartphones have had on consumers’ financial wellbeing and habits.
Tap and go technology has paved the way for a contactless revolution. Furthermore, in bigger cities, consumers enjoy the convenience of paying on the go with minimal effort.
Key findings of the report included:
- By 2027, the average adult in the UK will make a similar number of payments each month. However, the frequency of using certain payment methods will change. 28 of these payments will be made using debit cards, and cash will be used 12 times each month. The average adult will also make 22 contactless payments per month in 2027, and
- The number of cash payments in the UK will continue to fall over the next decade, as consumers turn to alternative payment methods. There are expected to be 6.4 billion cash payments in the UK in 2027, accounting for 16 per cent of all payments.
Increasing the contactless limit again could serve as a proactive way to manage the surge of contactless payments that is expected by 2027.
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By GlobalDataApple Pay driving contactless usage
Fintech analysts, Juniper Research estimates that by 2020, contactless payments will reach an estimated $2tn. Overall, this will largely be driven by the significant use of mobile wallets and cards.
Apple Pay has emerged as the catalyst for a higher contactless limit. The number of consumers who tap to pay will grow to 450 million worldwide by 2020. Apple Pay has already set the stage for raising the limit. The majority of Apple Pay tills in the UK can now accept contactless payments above the current £30 limit.
By 2020, Apple Pay will most likely have amassed the largest customer base out of all the mobile payment solutions, scooping 50% of all contactless payments.
Retailers would welcome raising the contactless limit
According to Barclaycard, three-quarters of retailers that have contactless payment capabilities have witnessed an average increase of 30% in transactions.
Currently, one in five retailers would welcome a contactless limit increase of up to £100. Over half of UK consumers use contactless on a day-to-day basis. The popularity of alternative payment methods shows no signs of slowing down.
Overall, the rise in usage of contactless cards has been undeniably rapid thanks to their significant convenience and security. Combining technological innovations, enhanced security, and the introduced of contactless ATMs, it’s almost inevitable that the contactless limit will rise.
