Should Insurers Reframe Client Conversations When Contactless Limits Go?

The thought occurs to IE that when the £100 contactless tap n go limit is abolished, all kinds of potential frauds and claims scenarios will open up.

From friends and relatives “borrowing a card,’ to straightforward scanning of cards by crims and then purchases at several outlets before a card is stopped, or the daily transaction limit is breached. For those cards with higher limits, the potential impact on Directors cover could be worth noting, plus it might be time to add an extra exclusion or claim limit on card losses on Travel cover too?

For many insurers it would be worth talking to customers about setting limits themselves via online banking apps, assuming the £100 limit is abolished.

Here’s some research from Ocean on the issue;

New research from Ocean Finance shows 65% of Brits spend more when using cards or contactless devices than cash, while 42% believe cash helps them budget better. 

With the Financial Conduct Authority (FCA) now considering removing the £100 contactless card limit, Brits could soon be able to tap to pay for expensive items, from TVs to plane tickets, without needing to enter a PIN. 

While some people love convenience, money experts are warning it could lead to more debt, impulsive spending, and rising fraud. 

🚀 Fiona Peake, Credit Card Expert at Ocean Finance, explains:

“For those already managing tight budgets, tapping away on credit could lead to nasty surprises when the statement lands. Contactless payments now account for more than half of all card transactions in the UK, and younger shoppers could be especially vulnerable. It’s the small daily taps that add up (a coffee here, a lunch there) and before you know it, you’ve overspent.

“The simple act of entering your PIN can give you that extra moment to pause before spending £150 on something you didn’t really need.” 

🦉 Siobhan Blagbrough, Financial Crime Expert at Ocean Finance, warns scrapping limits could make fraud easier for criminals: 

“Every time the contactless limit has gone up, concerns about theft and fraud have followed. The idea of being able to make high-value purchases with just a tap will raise red flags for many people. One in four (22%) Brits worry about what would happen with contactless payments if their card was lost or stolen, and 20% only trust card payments when using their PIN. Yes, consumers are usually protected and can get their money back if their card is used fraudulently, but dealing with stolen funds, blocked accounts, and waiting for reimbursement can still be stressful.  

“Currently, most banks make you enter your PIN after five consecutive contactless payments or £300 spent in total, to keep things in check. But with unlimited contactless, those safety nets could weaken. Banks will carry the burden if things go wrong, but consumers should still take charge. Many banks already let you lower your own contactless limit or turn it off completely – it’s worth checking your app and setting a limit that suits you.”