Like many trends within digital banking, the adoption of contactless payments has been accelerated by the pandemic. The UK’s latest latest move to increase the limit on contactless transactions from £45 to £100 will further spur that activity, improving many in-person payment experiences. At the same time, however, it will raise vulnerability concerns.
So why not let UK consumers set their own limits?
Without doubt, contactless payments are a huge benefit to consumers, removing a significant amount of the friction associated with cash. And consumers have fallen for contactless: in 2020, contactless payments increased by 12% to 9.6 billion payments, representing about a quarter of all UK payments. The move to more than double the individual limit will only raise those levels.
Sadly, the higher limit could make consumers feel more at risk and attract fraudsters.
That’s why it may make more sense for consumers to set their own limits, as they do in the U.S. Starling highlighted concerns around applying a higher limit earlier in the year, stating that it would instead allow users to choose the level that makes them comfortable.
Consumers already are personalizing their banking experiences, whether by choosing the colour of their card or by laying out their tools in-app in a way that suits them. Banks would be wise to build on that concept and allow customers to apply their own risk appetites as contactless becomes increasingly important to them.
Anne analyses digital banking journeys in the Digital Banking Hub.