50% boost to Contactless Payment “Limit”

The upper amount for contactless card payments has been increased from £10 to £15. This is a big boost to the card industry’s drive for wider acceptance of the payment method and brings the UK into line with the eurozone, where the limit is EUR25.

In Expense Reduction Analysts we believe that it is key that retailers who adopt this method enjoy a more competitive set of costs than previously, or any margin on the low value goods sold can be all too easily lost. Pivotal in this is a full appreciation of the differing costs the acquirers themselves face; as contactless payments are priced differently for them by both Visa and Mastercard.

We are in a long-term strategic game here, where the card issuers and acquirers want to see a critical mass behind this payment variation and see it replace cash. And do not forget, a card is only one medium…..the technology can be embedded into anything, e.g. phones, mp3s &c.

MasterCard’s research has found that 53 per cent of consumers are enthusiastic about contactless payment because of the convenience and speed.

Some 38 per cent of people think they will be using cash less in five years’ time.

Those retailers who see spends per customer at or below £15 will latch onto the research finding that showed 16 per cent of people said they often did not make everyday purchases such as newspapers, sweets or cigarettes because they did not have change or did not want to break a note.