July 25 2014 Latest news:

Shops and vending machines that allow contactless payments have begun to raise the transaction limit to £20.

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There are already 23 million contactless cards in circulation in the UK, with the limit for each transaction currently £15. They work by being held up to a reader for low-value transactions and do not need a Pin to be entered for confirmation

The latest move marks the second time the transaction limit for contactless payments has been raised. Two years ago, it was increased from £10.

“Low-value transactions have been gradually moving from cash to card,” said Melanie Johnson, chairman of the UK Cards Association (UKCA).

“Contactless cards provide another convenient and fast method for paying for low-cost goods and services.

“They attract the same level of protection as traditional plastic cards – meaning customers will suffer no loss if they are a victim of fraud – and certainly provide much more convenience and protection than traditional payment methods such as cash or cheque.”

The UKCA said the latest rise would broaden the appeal of contactless payments, making it possible to pay for a small basket of shopping, for example, rather than simply for sandwiches or coffee.

Contactless transactions do not normally require a Pin to be entered, but card use is monitored by a chip on the card. This limits the number of consecutive contactless transactions allowed before the cardholder is required to undertake a chip and Pin transaction. This is designed to deter and limit fraudulent use should a card be lost or stolen.

But if a fraudster successfully makes a contactless transaction on a stolen card, consumers have the same legal protection as they do with any type of card fraud.

American Express, Mastercard and Visa have all adopted contactless technology for debit cards and credit cards. Customers will be contacted by their card companies and given full details as and when they join the rollout.

A spokesman for American Express said: “The rise in the payment limit is good news for consumers as it offers even greater flexibility and convenience for card holders.

“The evolution of this technology allows for faster transactions and will broaden the appeal of contactless cards to the growing number of people adopting this method of payment to pay for their everyday purchases.”

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