New £30 limit introduced for contactless card payments
The contactless payment revolution is continuing to flourish as shoppers will now be able to make increased-value payments.
From tomorrow, the limit for a single payment will rise from £20 to £30 widening the appeal of contactless payments, as a growing number of people continue to adopt the method.
First introduced to the UK in 2007 as an alternative to finding cash to pay for low-value transactions, contactless payments have become accepted in places from supermarkets to public transport.
Trade body the UK Cards Association has revealed more contactless transactions took place during the first nine months of 2014 than the previous six years combined, with 58 million contactless cards in the UK.
Jason Richelson, CEO of iPad PoS specialist, ShopKeep, expects the rise of the spending limit to £30 will act as a catalyst for changing behaviours around contactless payments. He said: “The introduction of contactless payments has had a huge impact on consumer habits and the rise of the spending limit to £30 is only going to speed this up.
“This is also backed up by research from the UK Cards Association, which stated that average transaction values (ATV) in Q2 of 2015 has fallen to the lowest level since 2003. The reason? People are making more small value card purchases than ever. Alongside this, cash transactions are on the decline, now accounting for less than 50% of overall payments. Plastic is surpassing paper.
“This will only become more prevalent and SMEs have to adapt. Consumers want to make purchasers quickly, easily and securely and are looking towards contactless payments. This should be viewed as an opportunity for small businesses, not a hinderance. There are often hidden costs associated with handling cash transactions, such as the time it takes to count, handle and deliver to the bank.
“While adopting the very latest electronic payment systems might have been seen as a luxury, recent developments have rendered them not only a valuable tool for all customer facing businesses, but integral to the success of the forward-thinking SME.
“It’s crucial that small business owners have a strategy in place that will allow them to effectively adapt to this change in spending habits. If this is not done, SMEs will find themselves struggling to keep up with changing consumer habits and left behind. Contactless is here to stay.”
Commenting on the increase, Kevin Jenkins, Managing Director of Visa UK and Ireland, said: “We believe that the new threshold increase to £30 could be the most significant to date, and has the potential to essentially redefine contactless usage. With contactless now accounting for one in 11 in-store Visa transactions, and Britons increasingly embracing the technology, our data shows that the rise could impact as many as 3 million Visa transactions per day in the UK, for a total of over £70 million. “Supermarkets, clothing stores, department stores and pharmacy chains particularly stand to benefit from the increase, as 12 - 20% of Visa transactions at these retailer types fall into the £20 – 30 category. This is an opportunity to increase convenience, improve service and deliver an enhanced shopping experience for a significant number of their customers.”
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