The cards give customers a fast alternative to cash when making low-value payments in stores. The contactless system enables customers to pay by holding their card up to a reader rather than tapping in their PIN. The first contactless cards were issued in 2007, and today, there are 23m cards in use across the UK.
It’s the second time the contactless transaction limit has been increased – it was first raised from £10 to £15 in 2010. More than 17.7bn of all consumer cash payments are for amounts under £20 – with the majority of these being for purchasing groceries. The latest rise is expected to broaden the appeal of the contactless system.
Melanie Johnson, the chairman of The UK Cards Association, said: “Low-value transactions have been gradually moving from cash to card. Contactless cards provide another convenient and fast method for paying for low-cost goods and services.
“They attract the same level of protection as traditional plastic cards – meaning that customers will suffer no loss if they are a victim of fraud – and certainly provide much more convenience and protection than traditional payment methods such as cash or cheque”.
Mark Austin, the head of Contactless, Visa Europe, said: “We welcome this increase which will make contactless payments even more useful to people across the country.
“Contactless technology has passed several major milestones in the last year, with HSBC recently announcing the rollout of Visa contactless debit cards.
“By the end of the year we will be approaching 30m Visa cards in the UK, and with more major retailers coming on board on a regular basis, the opportunities to use contactless payments are increasing rapidly.”
Research from accountants PwC, which was published earlier this year, suggests that digital banking will become more popular than visiting a bank branch by 2015.
Some 69 per cent of respondents said they currently use the internet to purchase financial products.
PwC said that, if banks are too slow off the mark, they risk being overtaken by new entrants or non-traditional financial services providers, who already place digital at the heart of their services.