The UK ‘tap & go’ limit for transactions on all contactless payments cards will increase from £20 to £30 on Sept 1 and it is expected to drive a surge in contactless payments.
Spending by British consumers on their contactless cards has increased more than five-fold in the last 12 months, according to MasterCard’s UK spending data. Cardholders have driven 560% year-on-year growth in the value of transactions, up from a 373% increase in the year to July 2014, showing that the adoption of contactless payments is continuing to accelerate.
Visa notes British consumers are by far the biggest adopters of Visa contactless cards, spending more than €330 million in March alone by touch-to-pay. The roll-out of contactless payments on all Transport for London (TfL) services is one reason for this accelerated growth of contactless in the UK, as there have been more than 100 million contactless journeys since launch (85 million of which have been using Visa cards). In the 12 months to March 2015, the number of contactless cards grew by more than 37% in the UK.
Meanwhile, the number of contactless card transactions made with MasterCard have already quadrupled since last summer (457%).
At the start of 2012, the year in which the limit was raised to £20, the average contactless purchase by cardholders was for £4.52. In July this year that had increased to £7.29, a good indication of the need to raise the contactless limit to £30.
MasterCard’s data also shows that each year since 2012, individual cardholders have on average doubled the number of times they tap to pay, indicating more confidence among consumers and ever increasing acceptance of contactless by retailers.
Overall levels of fraud on contactless cards remain very low, with just £153,000 of losses during 2014 compared with total spending of £2.32bn, according to UK Cards Association figures. This represents just 0.7p in every £100 spent on contactless, one of the lowest fraud rates for any kind of payment.
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