The opportunity for contactless in the UK
Contactless payments has been one of the most defining trends in how UK consumers shop over the past few years. Even before the pandemic, data from UK finance showed that millions more of us were tapping to pay for our everyday purchases. 2020 accelerated that shift. As Covid-19 shaped how we all lived our daily lives, consumers increasingly depended on contactless payments for a touch-free and seamless shopping experience.
This shift in consumer preference for contactless led the UK to make the swift decision to raise contactless limit from £30 to £45 last April. Similar rises took place across Europe, leading to 500 million additional touch-free payments as people embraced the option to pay with contactless. The Financial Conduct Authority is now consulting the industry on going further and raising the limit to £100.
At Visa, we strongly support raising the limit to £100. Here are three reasons why:
1. It will enable consumers to shop in the way they want
Consumers and businesses alike are looking forward to a time when restrictions ease and our high streets are back open. When this happens, it will be crucial that people are provided with the confidence that returning to the high street will be a positive experience.
Consumers increasingly prefer to tap to pay when shopping, eating out or travelling on public transport. Recent Visa data shows that eight in ten in-person payments are contactless1. Our Back to Business study also revealed that across the world nearly two-thirds (65%) of consumers would prefer to use contactless payments as much as, or even more than, they are currently. Increasing the limit to £100 would enable almost all card transactions, including typical purchases like a weekly grocery shop, to avoid the need for Chip & PIN2. This would give more people the freedom to pay in the way that is right for them.
2. Contactless is a secure way to pay
Visa rigorously monitors payments fraud across the world and contactless remains one of the most secure ways to pay, with one of the lowest fraud rates of any type of payment. Despite the contactless limit rising by 50% last year, there has been no rise in fraud rates3.
Contactless fraud can only be attempted physically using a lost or stolen card. Regardless of the contactless limit, all transactions are subject to sophisticated real-time analysis when they are approved, and banks can block them or request a PIN to authorise the transaction in case of suspicious activity.
Many of the things people fear, such as fraudsters using mobile payment terminals to “skim” the details from your card, are in reality incredibly unlikely. And if you do suspect you might be a victim of fraud, then Visa’s Zero Liability Policy provides a guarantee that you won't be held responsible for any unauthorised payments made with your card or card details.
3. Raising the limit could support our recovery
Contactless payments are popular and secure. With many small businesses having had a challenging past year, it’s going to be crucial that footfall returns as soon as possible. Raising the limits could help retailers, especially many small stores, get back on their feet by increasing sales and in turn contribute to our economic recovery.
The opportunity for contactless payments is great and we look forward to working with the FCA, our clients and the wider industry as they assess this further change. We believe there is an opportunity to drive this change as an industry and deliver a solution which enables more consumers to pay in a convenient way.
1 VisaNet Data (November 2020)
2 Statista (2020)
3 VisaNet Data (November 2020)