On 15th October the contactless spending limit increased to £100. Although the limit has been increased, the retail industry has said that it could take months to implement this change before all shoppers can use the new payment threshold. The 15th October 2021 marks the day where the gradual introduction of the new limit began.
Why is the contactless spend limit increasing?
The Treasury and the City regulator, the Financial Conduct Authority (FCA), made the decision to increase the contactless spending limit. Chancellor Rishi Sunak said that increasing the contactless spending limit would increase convenience for shoppers and would help high street retailers after a difficult lockdown period.
Over the last five years, the frequency of contactless payments has continued to rise as the payment thresholds have gradually increased. The only exception was during the national lockdown where spending decreased across the board. This latest contactless spending increase has come because fewer consumers are now paying with banknotes and coins, in part, driven by people wishing to reduce person-to-person contact.
Is the new contactless limit safe from fraud?
The cumulative contactless payment cap was increased from £130 to £300 on the 15th of October. Therefore, you can now spend £300 via contactless payment before the pin number is requested.
Some have expressed concerns that this increased contactless limit will encourage more thieves to steal wallets, purses, and bags, etc. Professor Graham Farrell (Professor of crime science at the University of Leeds) has suggested using a tap and pin approach, where shoppers would tap their card and enter their pin without needing to insert the card into the machine. Professor Farrell believes that this approach would make the idea of theft less attractive.
However, the authorities counter that with data that has shown that there was no increase in crime when the last payment limit increase was implemented. In addition, an FCA spokesman said that there was no increase in fraud in other countries where contactless spending was increased to the equivalent of £100 or more.
How can we help?
At Hawsons we have a dedicated team of retail, wholesale, and E-commerce accountants at our offices in Sheffield, Doncaster, and Northampton.
Our specialist team offers a wide range of services that are tailored to meet your individual needs. Our understanding of the issues faced by the retail, wholesale, and e-commerce sector means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.
We can help in these areas through improving stock control, purchase re-ordering, and reconciliation procedures. For retailers, we have in-depth knowledge and experience of the sector from single sites to multi-channel retailers covering retail shops, e-commerce shops, and many other sites such as Amazon, eBay, Shopify, and Play.com.
0114 266 7141
Free initial meeting
Budget 2021 The Chancellor Rishi Sunak presented his third Budget on 27 October 2021. In his speech he set out the plans to "build back better" with ambitions to level up and reduce regional inequality. Main Budget proposals Tax measures include: a new temporary...
Retail staff decrease Retailers have now resumed trading as they seek to get business back on track following the forced closures of the pandemic. However, since their return, they now face a new challenge, staff shortages. Recent data shows that in the second quarter...
Due to 5,251 chain stores closing during the first half of 2021. Many independent retail stores have decided to fill the gaps left resulting in the first rise in independent stores for the first time in four years. A new total of 804 independent retail stores opened...