Budget 2021: Legal limit on contactless card payments to more than double to £100

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Chancellor Rishi Sunak is due to announce that the legal limit on contactless card payments will more than double to £100.

The announcement, which will take immediate effect, will reportedly form part of his Budget that is due to be delivered in the Commons at lunchtime today (Wednesday, March 3).

While legally in force from Wednesday, the increase will not happen immediately, as firms will need to make systems changes.

The banking industry will implement the new £100 limit later this year.

It is hoped that it will give a big boost to retailers as the economy picks up again.

First Minister Mark Drakeford has said that he hopes non-essential shops will be able to re-open in Wales from March 15.

The new limit means that more expensive items will not require a signature or even a pin number.

The Government said the increase has been made possible by the UK’s exit from the European Union, which means it is no longer bound by EU rules on the maximum limit for contactless payment, which is currently set at £45.

“Tap and go” contactless cards initially had a limit of £10 in 2007, and this was increased to £15 in 2010, £20 in 2012 and £30 in 2015. The limit was raised to £45 last April, in the early months of the coronavirus pandemic.

MoneySavingExpert Martin Lewis said: “Chancellor to announce legal limit on contactless card payments will more than double to £100. It’ll come into legal effect today, but in practice will take firms a while to implement.”

Chancellor Rishi Sunak said: “As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the capital.”

The announcement could further accelerate the decline of physical cash use, with banknotes and coins already having been shunned during the coronavirus pandemic. A Bank of England study last year indicated that the risk of catching coronavirus from banknotes is low.



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