Chancellor Rishi Sunak’s announcement of a contactless payment limit increase could boost criminal activity, according to new market research.
Payments using contactless tech are more than doubling from £45 to £100, making it easier for criminals to carry out fraud and money theft.
A major concern is that banks find it difficult to stop contactless payments, so a stolen card can be immediately used by a thief many times before it can be cancelled.
The Treasury has said the change to the contactless payment limit would make transactions “easier than ever” and would provide a boost to the UK’s struggling retail sector after Covid-19.
However, the public is not convinced about the security of the increase. According to a white paper released by TietoEvry, more than half (55.3%) of consumers said they are concerned about the safety of their payment cards.
TietoEVRY’s data shows that contactless payments have become the “habitual choice” of 78.3% of UK consumers, with fully 90% “having used contactless at some point in the last three months”, highlighting the significance of the concerns.
In the released paper, TietoEvry said: “With the new proposed limit of £100 per transaction in the UK from April 2021, it becomes possible for thieves to spend significant sums of money on unprotected contactless cards, even if theft is reported quickly.”
Contactless payments are more popular than ever, particularly as the use of physical money becomes a taboo subject due to the pandemic.
TietoEVRY’s data showed that 83% of UK consumers are concerned about infection risk when it comes to shopping and paying in-store, fuelling the rise in contactless payments.
According to the Treasury, eight out of 10 UK adults used contactless payments in 2019, which has now increased since the Covid-19 pandemic from four out of 10 to six out of 10 as of September 2020. The UK Government says the rise in limits will mean millions of payments will now be made “simpler”.
It now becomes “absolutely vital” that the Government provides “greater reassurance since raising the contactless limit to £100 effectively means people are carrying even more valuable possessions with them,” said Nick Thomas-Symonds, the shadow home secretary.
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As the country moves towards the final stages of major lockdowns, the UK Government has already announced plans to boost the usage of cash payments post-pandemic.
Proposals were announced in October 2020 to protect cash spending systems in the UK after a sharp increase in digital payments.
Under the government proposals, customers would be able to get cashback without purchasing from retailers of all sizes in local communities countrywide.
John Glen, Economic Secretary to the Treasury, said at the time that the government wanted to “harness the same creative thinking that has driven innovation in digital payments to maintain the UK’s cash system and make sure people can easily access cash in their local area”.