When cashless payments began to take hold, the United Kingdom (UK) limited such payments to a maximum of £10. During the intervening years, the UK has increased the maximum payment amounts, first to £20 then to £30 and eventually to £45 at the beginning of the COVID-19 global pandemic. However, the UK government recently more than doubled the amount of maximum payments to £100, alarming some experts on crime and security.
Debit and credit card payments are currently a high-risk target around the world. In an early 2021 report published by the University College London Jill Dando Institute of Security and Crime Science, authors Graham Farrell of the University of Leeds and Nick Tilley from the University College London explain that, “Debit and credit cards are a high-risk target of acquisitive crimes. Over 40 percent of thefts from the person in 2019 involved the loss of a debit, credit or store card according to the Crime Survey for England and Wales. To reduce the risk that such cards attract thieves, contactless payment limits have been set at low levels. In April 2020, to inhibit virus spread by removing fingers from keypads, the contactless card payment limit was increased from £30 to £45. In early 2021, lifting the limit to £100 is being discussed. We think that raising the limit is likely to generate crime to acquire debit and credit cards.”
Fraud on the Rise in the UK
Across all payments formats, fraud is on the rise in the UK. The Office of National Statistics collects data on fraud across payment types. According to their data, there appears to be a “strong and steady increase from around 1M incidents in 2010 to almost 3M annually by 2020 (ONS 2020).”
Credit Card Holders Beware
The report’s authors warn that, “Raising the contactless card limit to £100 would likely make card theft more attractive, increasing a broad range of acquisitive crimes including snatch theft of wallets and purses, hold-up robberies, and home and vehicle break-ins to find cards that can be used fraudulently. If the increased limits continue beyond the pandemic not only is it probable that crime rates will increase in the short-term, but also past experience suggests it could attract new cohorts of teen criminals who are more likely to progress to extended criminal careers, with implications for longer term crime rates in England and Wales.”
In response to the potential fraud risk associated with an increased payment maximum, the report’s authors recommend that if a contactless payment is necessary, it should be made via a contactless phone payment that requires some sort of biometric or PIN verification. They also emphasize that using cash for payments is more safe and secure than digital payments and cited a Bank of England research study which found that cash is safe to use during the COVID-19 pandemic.
As contactless payments gain more traction in the United States, consumers and retailers should take heed of the warnings set forth by the UK report.