Steffen Vollert, Co-Founder & CTO at Volt,

“With at least 135m contactless cards in circulation and the technology accounting for 9.6bn payments a year, there’s no doubt that the new contactless limit brings new opportunities for many. Consumers will benefit from greater flexibility and convenience; merchants could see an increase in sales and operational efficiencies; payment service providers might experience an uptick in transaction volumes.

“However, concerns that the increased limit will make it easier for fraudsters to steal larger sums of money from cardholders are valid, and should not be disregarded. During the first six months of this year alone, contactless fraud – covering cards and mobile phones – totalled £7.6m, according to UK Finance.

“Certainly, steps are being taken in right direction to combat card fraud. After 14 March 2022, issuers in the UK will have a legal obligation to implement SCA on card transactions under the FCA’s PSD2 requirements, for example. But this doesn’t solve the issue of contactless transactions, or card fraud itself. As a result, the increased limit could accelerate growing demand for an equally fast, but more secure payment method, which can be realised via open banking. Direct account-to-account payments in real-time eliminate card fraud altogether, whilst providing a single-click checkout experience for the consumer and substantially reduced fees for the merchant. It will take time for open banking payments to become mainstream. But could the increased contactless limit be the catalyst for a transition away from card payments? Only time will tell.”