A new limit on contactless card payment transactions will come into force on April 1, increasing from £30 to £45.
Shoppers will enjoy a £15 increase on the amount they’re able to spend without using Chip and PIN, as part of measures aimed at helping Britain's retailers who are struggling through the coronavirus outbreak.
It will also mean more payments can be made without the need to handle cash, which should cut retailers' costs.
The British Retail Consortium and UK Finance, which represents the finance and payments industry, believe the change will make it easier for consumers to shop, giving a much-needed boost to retailers.
An increased limit was already being considered but the process has been accelerated as part of the industry's response to Covid-19. However, the benefit will not be felt for most shops until the government eases current lockdown conditions.
Currently, only shops designated as essential by the government are open as the UK attempts to slow the spread of coronavirus.
More than £80.5 billion was spent using contactless payments in 2019, UK Finance figures show – up by 16 per cent on the previous year.
Supermarket Morrisons has asked customers to pay, where possible, by card or smartphone to help reduce cash handling and limit the number of physical interactions taking place.
It said that while many customers have opted to pay this way, some have been restricted from doing so due to the £30 limit.
There are concerns that increasing the maximum value on contactless purchases may cause issues relating to fraud but UK Finance's figures suggest the amount lost is relatively small.
Fraud equates to just 2.5p in every £100 spent using contactless technology. UK Finance said contactless fraud on payment cards and devices represents just 3.3 per cent of overall card fraud losses.
When were contactless cards issued in the UK?
The first contactless cards in the UK were issued by Barclaycard in 2007. As of December 2014, there are approximately 58 million contactless-enabled cards in use, in the UK, and over 147,000 terminals in use though this is growing in numbers and percentages of adoption.
In June 2018, the frequency of contactless payments overtook chip and PIN payments. According to Worldpay, 51% of all in-store card payments were contactless that month, followed by 52% in July.