U.K. contactless limit increase a treat for consumers or tricky fraudsters

You probably already know that the U.K. contactless card limit is increasing to £100 in mid-October. Society is becoming increasingly cashless, and the U.K. government and payments industry is following the trend. But do the benefits outweigh the risks?

First, the good news: a more frictionless shopping experience. If you use contactless now, you may be accustomed to tapping the card machine on your weekly supermarket shop and finding you’re spending over the limit. And unless you’re eating out alone, you may still have to enter your PIN every time you pay.

With the limit increase, your customers can tap to pay more often. You can offer more touchless experiences at your checkout in keeping with many customers’ preferences as we venture into the new normal, and less time waiting in queues is a win for everyone.

But what about everything else you’ve been reading?

The fact and the fiction on contactless limit

In Singapore, Canada and Australia, the contactless limit has been the equivalent of £100 for some time with no significant increase in fraud since they raised their limits.

Unless consumers are negligent (e.g., they knowingly give their card to someone else who uses it without their consent or have their card stolen and don’t report it) they are not liable for unauthorised contactless payments.

Despite this, there have been negative reports about the new limit in the media. We’re here to separate the fact from the fiction.

• The new limit puts my business at risk ─ Merchant liability shift will continue to apply to contactless transactions as it does now and, as a merchant, you’re usually not held responsible for fraudulent transactions that occurred through no fault of your own. There are exceptions for cases of lost/stolen card fraud, and liability rules can depend on the card issuing network, the type of card and the type of terminal you use to process it. If you’re concerned, speak to your Worldpay representative, and refer to your card acceptance guidelines and Merchant Service Agreement for details.

• Cards are more vulnerable to fraud ─ Regardless of the limit amount, cards are not at any higher risk of being stolen by using contactless payments. You must be close – obviously close – for someone to read your card. Even then, they would only get the card number and expiry date, which is the same information you see by looking at the front of a card. With that information alone, the fraudster still wouldn’t have the important details such as the security code on the back of the card. Additionally, by using contactless payments via smart devices, card and payment information is protected by device securities including PIN, password and biometric authentications.

• Thieves can take payments from a card using a card reader without their knowledge ─ There has never been any verified report of this happening in the U.K. It’s not possible to simply steal cash from a contactless card by bumping into someone in the street. All money must go through the card system, and every card payment is fully traceable ─ right through to the recipient’s account. If any fraudulent activity was reported, the recipient could be easily identifiable and the money would be taken back.

• What if the card itself is stolen? ─ Contactless cards have security checks, which means from time to time the cardholder has to enter their PIN to verify that they are the genuine cardholder. They will only be able to spend a maximum of £100 in any single contactless card transaction and a maximum of £300 across multiple contactless transactions before they must enter their PIN. The best thing to do if your card is stolen is to report it to your bank as soon as you’re aware. The bank will stop approving transactions from that card, and payments will not work.

If you’re interested in optimising your payments process with the quick convenience and high security of contactless payments, contact us to learn more.