The UK is considering removing the £100 cap on contactless payments to boost the economy, while France currently has no plans to raise its €50 limit. Adjustments in France have already occurred, with the limit increasing from €20 to €50 over recent years. Contactless payments make up 62% of card transactions in France, with ongoing growth driven by mobile payments. European regulations restrict limits, ensuring low fraud rates while maintaining a smooth payment process.
UK’s Potential Removal of Contactless Payment Limit: What About France?
The United Kingdom is contemplating lifting the restrictions on contactless payments, sparking curiosity about whether France might pursue a similar approach. For the moment, however, there are no plans in place for such a change in France.
In the UK, the Financial Conduct Authority aims to eliminate the current £100 cap on contactless transactions, hoping this move will invigorate the economy. Meanwhile, in France, the contactless payment limit has already seen several adjustments. It was increased from €20 to €30 in 2017 and then to €50 in 2020. Since then, this limit has remained the same, and indications suggest that a further increase isn’t on the horizon. Loÿs Moulin, the Director of Projects and Marketing at the CB Bank Cards Group, notes that the European PSD2 regulation currently caps the limit at €50.
This directive allows EU member states to set their own limits for contactless payments, provided they do not surpass the €50 threshold. Consequently, France cannot raise its limit without a revision of the overarching European regulations.
No Immediate Changes to the Current Limit
According to Loÿs Moulin, “In the short term, we will stay at €50.” He further emphasizes that there is little need for an increase since the “Contactless Plus” feature has been introduced, which allows payments exceeding €50 without the need to insert the card. This feature has gained acceptance from roughly 40% of merchants.
It is important to note that while the card can be used for payments over €50, entering a PIN is still required to finalize the transaction. This precaution is crucial for mitigating fraud risks, as Moulin highlights. Unlike contactless card payments, mobile transactions benefit from an integrated authentication system and thus do not have a limit.
Since its introduction in 2007, contactless payment methods have become deeply ingrained in French consumer behavior. Once a niche option, contactless payments now account for 62% of card transactions (including both card and mobile payments) in 2024. This amounts to 31% of total payment volumes, with an impressive 80% of transactions falling under the €50 limit. Currently, 92% of CB bank cards come equipped with contactless features, and 91% of merchants are prepared to accept them.
Average Contactless Payment Amounts on the Rise
The steady growth of contactless payments is closely tied to the series of limit increases, which have elevated the average transaction value. Loÿs Moulin notes, “Before 2020, the average contactless transaction hovered between €10 and €11. After the limit was raised to €50 in 2020, it increased to €15, and by 2024, the average stands at €17.”
However, usage of contactless payments via physical cards appears to be gradually transitioning to mobile payments. The latter has experienced remarkable growth, rising by 60% in the first half of 2024 and now accounting for over 10% of card transactions. In contrast, the use of physical card contactless payments has stabilized after a period of moderate expansion.
“The overall increase in contactless transactions is now mainly propelled by mobile payments,” asserts Moulin. He also points out that contactless card payments have new growth opportunities due to the “Contactless Plus” feature and novel applications, particularly in the transportation sector. Cities are increasingly adopting contactless payment systems for buses, trams, and subways, allowing bank cards to function as transport tickets.
Beyond the €50 transaction limit, European regulations impose additional restrictions, including a €150 cap on cumulative payments and a maximum of five consecutive transactions without entering a code. While banks may implement stricter measures, they cannot relax these rules.
Such regulations are instrumental in ensuring that the fraud rate remains remarkably low, below 0.01%, according to Moulin. He suggests that the current limits strike a satisfactory balance between effective risk management and a seamless checkout experience.