Commenting on the contactless payment limit increase to £45, Lisa Fernihough, Head of Financial Services Consulting at KPMG, said.
“The fact that retailers and payment providers have worked together to increase the contactless limit is just one of the many extraordinary measures being taken by UK organisations to ensure society sees through this crisis as safely as possible.
“While the move is to be applauded it is not without its challenges both for financial organisations and consumers. The rules around how often customers are authenticated via chip and pin have been relaxed, meaning someone with a contactless card can spend more money, more frequently. The changes may create an opportunity for fraudsters, putting added pressure on the fraud departments of banks and credit providers and driving the need for more investment in technologies that can identify and prevent fraud.
“The other important consideration is making sure the 1.5m unbanked UK citizens aren’t left behind. In the short term, anyone without a bank account will need to physically visit stores and spend cash to make their essential purchases. The move away from physical currency was already well underway: a quarter of us in the UK use a digital only bank and only a third of under 30s carry cash day-to-day, but if the ramp up in cashless payments works to cut down on contagion and queues at the till then we could see the demise of cash rapidly accelerated. That will put the need to address financial inclusion front and centre of banks’ priority list.”
Linda Ellett, UK head of consumer markets at KPMG, added:
“During a time when ‘contactless’ appears to be the key word, it’s unsurprising that payment methods have also come to the forefront during the COVID-19 crisis.
“Even prior to the crisis, consumers have been adopting new technologies like contactless, changing the consumer landscape at large. But in the same way we are focusing on the vulnerable in society in other ways, there are also those who aren’t perhaps as adaptive to these new technologies and need to be front of mind.
“The government’s decision to further restrict social interaction will also no doubt lead to more consumers turning online, another area where some will be less comfortable and at risk. We therefore encourage business and government to combine these positive changes with helpful advice to educate and protect shoppers.”
Notes to editors:
• UK Finance, 24 March 2020 - Contactless limit in UK to be increases to £45, accessible here.
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