Banks wary as Sunak prepares £100 contactless limit
Written by Hit Music Radio News on 02/03/2021
Some of Britain’s biggest banks are sounding the alarm bell over an increase in the contactless payment limits to £100 amid expectations that Rishi Sunak will unveil it as part of a ‘Brexit dividend’ in this week’s Budget.
Sky News has learnt that a number of major high street lenders are urging the government and regulators to stagger the hike from the current limit of £45 and to curb the number of times contactless cards can be used on any single day because of the growing fraud risk
Industry sources believe the chancellor will confirm the proposed move to £100 on Wednesday as part of a package of post-Brexit measures enabling the UK to diverge from the European Union.
The current limit of €50 is set by the European Commission.
Boris Johnson was told by business leaders earlier this year that an increase would be a potent symbol of Britain’s ability to go it alone, and is even said to have made a passing reference to the limit going as high as £1000.
The Financial Conduct Authority announced a consultation on the threshold in January, saying that it was “important that payments regulation keeps pace with consumer and merchant expectations”.
The Times reported last month that Starling Bank, a digital banking app, had expressed caution over the move, but industry sources said that some of the UK’s biggest lenders were also expressing concern about the move.
Big banks are under increasing pressure to get to grips with a surge in payments-related fraud, the bill for which has soared in recent years.
Britons now spend tens of billions of pounds every quarter using the contactless system, and there is not thought to have been a marked increase in fraudulent transactions since the UK limit changed from £30 to £45 during the early stages of the pandemic.
UK Finance, the banking industry body, declined to comment.
© Sky News 2020