Barclaycard customers increase contactless spending following limit rise

The total amount of money spent using contactless technology on Barclaycard increased by 40% last year as a major increase in the spending limit fuelled transactions.

Figures from Barclaycard also revealed that over 90% of in-store and face-to-face payments, using its cards, were contactless in 2021.

Contactless payment technology was introduced in 2007 with a £10 spending limit. That limit increased gradually to £30 by 2020, but has seen significant increases during the Covid-19 pandemic, rising to £45 in April 2020 and £100 in October 2021.

The increase to £100 contributed to a 27.5% year-on-year rise in the number of contactless payments made by Barclaycard customers.

Last year, the average Barclaycard contactless user made 180 contactless payments, worth a total of £2,293. In 2020, the same average user made 141 payments worth £1,640.  

The sharp rise in the spending limit for contactless cards was seen as risky by many, but Jose Carvalho, head of consumer products at Barclaycard, said data showed it had proved popular.

He said the Covid-19 pandemic was a major part of the reason for the increased use of contactless payments. When the pandemic took hold, people were told to limit physical contact, including reducing their use of cash. Contactless payment technology, as the name suggests, was an ideal replacement for cash because, unlike mobile phone payment apps, most people already used payment cards.

“Unsurprisingly, many consumers are also increasingly reluctant to touch cash or PIN pads when they go to shops, which is why innovations that enable a ‘low-touch’ experience, such as contactless payments, have really grown in popularity,” said Carvalho.

According to Barclaycard, the contactless payment method saved an average of seven seconds per transaction compared to Chip & PIN and 15 seconds compared to cash.

There were some raised eyebrows when the spending limit was first lifted to £100. This was because contactless card payments only use single-factor authentication, which is possession of the card, although they do ask users for a PIN after a certain number of contactless payments.

The raised spending limit on contactless card payments has boosted payment volumes and value, but without the introduction of more stringent authentication the limit is unlikely to get much higher.

Payment methods such as Apple Pay, which has no limit on spending, require the presence of the phone associated with a bank account, as well as a fingerprint or face ID.

According to the most recent figures from trade body UK Finance, contactless-only fraud equates to 2.5p in every £100 spent.