Contactless payment limits must be held as technology celebrates 10th birthday

The City of London Police Commissioner is worried about the potential for fraud. His warning should be heeded

Contactless payments: Convenience but at a risk (Wavebreak Media LTD/Wavebreak Media Ltd./Corbis)

Happy birthday contactless payments - ten years old today. I have to admit I was startled to see that the technology was quite that old.

I was less than surprised to see that a lot of retailers would like to celebrate with an increase to the current £30 limit, which was itself hiked from £20 just two years ago.

Contactless when it works (and it’s one of those things that can be extremely annoying when it doesn’t) is just too convenient for both shops and customers.

However, the City of London Police, which plays an important role in combating economic crime, is less than keen on any further liberalisation.

Commissioner Ian Dyson told the Evening Standard that he would “advise against increasing it (the limit) for the moment”. He fears that the losses from fraud could be “quite significant” were it to happen.

“At some point the technology will change and you can raise the limit. The cap is there for sound reasons.”

I have to admit, I lean towards his point of view. While the tech is relatively safe - losses due to fraud run at about 2.7p for every £100 spent - the potential is always there, and not just if you happen to lose your card and fail to cancel it with sufficient speed.

Regulators had to step in after it emerged that some merchants didn’t download payment data to their banks until the end of the day, potentially opening the door to all sorts of mischief.

And last year it emerged that lost or stolen cards could be used to make fraudulent payments years after being cancelled.

You can understand why retailers, and indeed, some customers might find the cautious approach frustrating.

It does sometimes seem as if the poor consumer is forced to take on an obstacle course as a result of the heavy handed, and ill thought out, imposition of fraud prevention measures.

My bank, for example, insists on flagging payments as “suspicious” almost every time I try to clear my credit card, which is provided by a well known and reputable institution.

“It’s an automatic system,” was the response when I complained. “What are you going to do. The management here are idiots.”

No, they didn’t say that. But I imagine that’s what they were thinking.

A little investment in a better system ought to solve that problem.

Perhaps investment is the key to solving the problems presented by contactless too.

For now, however, I'm inclined to side with the Commissioner. Better safe than sorry after all.

The average supermarket shop is £25, which is what influenced the £30 limit. The average contactless payment is £8 or £9.

So there's no real need to change anything for the moment.

The birthday present is best kept under wraps.