The increase in the UK contactless card payment limit from £20 to £30 has had “a transformative effect” on consumer spending habits, according to Visa Europe, with contactless transactions over £20 seeing an average monthly growth rate of 19.1% between October 2015 and March 2016 — more than twice the average monthly growth rate of 8% for contactless transactions under £20.
Overall contactless payments volumes are up 237% on a year ago and more than 10% of all face-to-face card transactions for purchases of between £20 and £30 are now contactless.
Four sectors have seen “significant” growth since the increase in the transaction limit, Visa Europe says:
- In supermarkets, where the average supermarket basket is £25, there has been a 100% increase in contactless transactions compared to the six months before the £30 limit was introduced.
- In restaurants, where “a meal for two has come more into range when paying this way”, contactless spending has risen 155%.
- Bars and pubs have seen “a surge in contactless transactions in the £20 to £30 band”, with average weekly growth of 30% between October 2015 and March 2016. That compares to growth of just 3% for contactless purchases under £20 during the same period, “suggesting larger rounds or more expensive bottles of wine are now being bought via tap and go”.
- At service stations, the average value of a contactless transaction at the pump has increased by £2.22 since the £30 limit began, rising from £8.47 to £10.69.
“The trajectory for contactless payments continues to look very strong,” says Kevin Jenkins, managing director for UK & Ireland at Visa Europe. “Increasing the spending limit to £30 has clearly encouraged consumer adoption. While the number of transactions continues to grow, we are already seeing the next generation payment technology arrive, with mobile and wearable payment services bedding in.”