Bank customers fearing the new £100 contactless card limit will leave them vulnerable to fraud will be given the option to set their own, lower limits from next month.
The new £100 cap was announced in August and will come into force on October 15. However, Lloyds Banking Group will allow its customers to set their own limits on contactless spending, after some customers demanded a lower ceiling.
Debit card holders can choose their own limit from £30 to £100 in £5 steps if they have an account with Lloyds Bank, Halifax and Bank of Scotland. It is thought to be the first of the four largest banks to make this step.
Contactless technology allows for payments to be made with a simple tap, without any further checks such as a Pin or signature. But it also makes it easier for thieves to use the card if it is lost or stolen, especially if a victim has not yet noticed and told their bank.
Contactless technology was introduced as a simple way to make quick, small purchases like a sandwich or a round of drinks. But the initial £10 spending cap has been repeatedly increased since these cards were launched.
The limit was increased to £20 in 2012, to £30 in 2015 and then to £45 in 2020, in response to the Covid-19 pandemic.
But Lloyds said its customers wanted to be able to set their own limits. Debit card holders will have first access to the sliding scale of limits, followed by credit card customers.
NatWest said its customers could switch off contactless functionality on their cards, effectively setting the limit to £0. Barclays said customers can set spending limits in general but not contactless limits. HSBC did not respond to a request for their plans for the technology.
Philip Robinson of Lloyds said: “When the contactless limit increases, our customers will be able to use new tools in our mobile app to switch contactless on and off and also set their own transaction limit. We’ve listened to customer feedback to introduce this option which will allow them to make the most of the £100 limit in a way that works for them.”
Reporting contactless fraud
The new limit means British consumers will be among the biggest spenders without having to confirm their identity. Japan’s ¥20,000 limit currently tops the UK’s ceiling by about £30. In the US, there is no central limit but banks can set their own caps.
Critics have wondered who would demand this higher limit, since Pin entry only takes slightly longer. But banks point to the fraud guarantees that are available and the fact that cash, when stolen, is even less secure.
According to the most recent Payment Services Regulations, the rules which govern payment systems in Britain, banks must refund unauthorised payments, unless their customers have broken the rules or been “grossly negligent”. In other words, as long as you report the loss or theft of your card as soon as you notice it, you should be covered by your bank.
Cards ought to force a Pin check every five transactions or £300, whichever is triggered first, as another security measure.
Avoiding contactless scams
There are ways to protect yourself and avoid having to test your bank’s largesse. Contactless cards contain an antenna to allow the payments system to identify the card and carry out the transaction.
If you are worried about devices reading your card and cloning it, line your wallet or purse with tin foil. This blocks the radio signal needed for the card to communicate. If you are going on holiday or worried about pickpockets try to not carry too many contactless cards at once.
Do not allow your card out of your sight for payment. Many terminals are now wireless and your card never needs to leave your hand unless the Pin is needed.
Politely remind anyone taking a payment that if a terminal is faulty then they can go and swap it without also taking your card. It is also socially acceptable to insist on seeing the amount being billed and to request a receipt.
Check your bank statements weekly to check for unusual payments. If you do not recognise a payee, search the name online as some vendors use their company name rather than a brand name. If anything looks suspicious, ring your bank or card provider.