Crime rise warning over new £100 contactless payment limit
Boost from £45 last April could aid fraudsters, it is claimed
An increase in the contactless payment limit to £100 may cause an surge in thefts and fraud, figures working in banking and finance have warned.
The amount that people can spend on “tap and go” cards is currently limited to £45 but is set to more than double to a limit of £100.
The UK government has said that by increasing the limit, millions of payments will be made more simple. Contactless cards are a popular choice and in 2019, eight out of 10 adults in the UK used contactless payments.
Although the decision may be welcome news for shoppers, some have warned that the increase in funds available to spend without typing in a pin could be seized on by criminals.
Gareth Shaw, head of money at consumer research and advice body Which?, said: “The risk of falling victim to contactless card fraud is currently low, but there is potential for thefts to rise if criminals take advantage of the increased spending limit to maximise the amount they can steal.”
Ricky Lee, chief executive and co-founder of banking app sync., said contactless payments are a “good thing” but warned: “It is vulnerable to fraud.”
He added: “There is always a chance that thefts could rise as criminals are tempted by the increased contactless limits. A criminal could spend hundreds of pounds in just a few minutes, so a payment card can be a big target.”
Andy Renshaw, from Feedzai, a data science company that looks at fraud risk for financial institutions, said: “While done with the objective of boosting high street shopping, this move means that banks will have to work even faster to identify and block potentially suspicious transactions.
“Of particular interest will be how much a fraudster can spend in total between each chip and pin verification, expected to be £300. While we expect that all the necessary precautions will be put in place, there is certainly an added element of risk that will need to be accounted as banks and customers adapt.”
Shadow home secretary Nick Thomas-Symonds said it is “absolutely vital” that the government provides “greater reassurance, since raising the contactless limit to £100 effectively means people are carrying even more valuable possessions with them”.
Mr Shaw said limits will still be in place on the number of transactions made before a pin is requested and banks will be expected to refund money lost through such crimes.
He urged people to report lost or stolen cards to banks as soon as possible, check statements regularly for suspicious transactions and not to keep cards in easily accessible pockets or bags.
Mr Lee suggested people could help protect themselves by using digital banking with security controls so cards can be frozen instantly, setting spending limits, or paying with QR codes instead of cards to help make payments more secure and minimise the gain for criminals.
Action Fraud advised shoppers to always check the amount before paying and never to hand over a card during a purchase, particularly for contactless payments.
The body also said people should shield the key pad when typing in a Pin, sign the backs of new cards immediately and make sure old cards are cut through the magnetic strip and chip once they have expired or been cancelled.
UK Finance, the trade association for banking and financial services, said contactless fraud rates “remain low”, with losses falling by 20 per cent to £8.2m in the first half of the year – the equivalent to 2p in every £100 spent using such technology, down from 2.7p reported in 2019.
Contactless cards initially had a limit of £10 in 2007, which increased to £15 in 2010, £20 in 2012 and £30 in 2015. The limit was raised to £45 in April during the early months of the pandemic.
While it has been legally in force since Wednesday when announced in the Budget, the increase will not happen immediately as firms will need to make systems changes, with banks set to introduce it later this year.
Press Association