Contactless limit set to rise as method poised to dominate retail payment methods by 2022

Limit for contactless payments is set to increase to £100 from Oct 15, stated reports, a week after a research’s findings claim that contactless payments will be Britain’s most popular spending method by the end of next year.

The increase was first confirmed by Chancellor Rishi Sunak in March. The limit on tap and go, also known as contactless payment, was originally £10 when it launched in 2007. It was increased from £30 to £45 last April at the height of the pandemic.

It is now set for a further increase to £100 from Oct 15.

The move comes as a recent report from VoucherCodes.co.uk, titled “Life after Covid: Prospects for online retailing, physical stores and how we pay report”, stated that contactless payments are up by nearly a third (30 per cent) since the start of the pandemic and will account for 47 per cent of all retail purchases by the end of 2022.

Chip and pin payments are forecasted to decline to just 25 per cent of all purchases while cash payments will also see a sharp decline, accounting for just over a tenth (11 per cent) of all payments by the end of next year, said the report.

Overall, it is estimated that card payments are expected to account for almost three quarters (72 per cent) of all transactions with contactless being the dominant one.

Examining the pandemic’s effect on the way UK shoppers pay for goods, the study showed how before the pandemic, chip and pin was the most popular payment method, accounting for over a third (37 per cent) of all transactions in the UK while only 17 per cent of all payments made were contactless. 

During the pandemic as the contactless payment limit increased from £30 to £45, shoppers swapped cash for cards for hygiene reasons, with several retailers reportedly refraining from accepting cash.

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, said that Covid-19 has forever changed the way consumers spend their money and people have quickly adapted to relying on contactless payments for the bulk of purchases as a result.

“It remains to be seen whether the government will amend laws relating to legal tender, enabling retailers to permanently refuse to accept cash if they wish,” she said.